The jewelry business sure has been interesting over the last few years. When COVID hit, many jewelers backed off on their marketing budgets in an attempt to play it safe and see what happened. Meanwhile, other stores – including many of our clients – kept their marketing budgets the same. They went in, facing uncertainty with bravery, by attempting to gain market share when others went dark.
It turns out, the decision not to cut back on advertising was a good one.
You see, one of the major factors in advertising is competition. When competition is fierce, advertising costs more, and your ads earn less market share. But when competition for ad space goes down – as it did during COVID – suddenly your marketing budget gets you way more reach for the same dollars.
We watched as our clients’ ad costs went down, but their profits went up. Not only did they get to save some money while running ads, but they were able to create much more traffic and sales opportunities for better prices.
The numbers we saw spoke for themselves. The increased traffic and reach led directly to higher sales. And these “highs” were much higher than other jewelers who cut back on advertising during the pandemic. It’s not hard to believe that these cutbacks led to many jewelers reporting having a down year in 2022.
That’s why, as the jewelry market appears to be normalizing after record years, the lesson for 2023 is this: don’t stop your advertising to save money!
If you’re still on the fence, there’s some extra good news. There’s data evidence that keeping up your marketing budget wasn’t just a fluke during COVID.
Back in 2008, right after the housing crash of 2007, a study by the Institute of Practitioners in Advertising found that scaling back your advertising in a downturn will set your sales back for years. The survey found that cutting back on advertising did save on overhead – in the short term. But this came at the expense of losing sales and their share of market trends, which are very difficult things to reverse.
Going “dark” has a bad reflection on your brand. And if consumers don’t see or hear from you, they’re going to forget that you’re there. The lost relationship with clients and missed opportunities are hard – and sometimes downright impossible – to make up once you resume “normal” advertising. In other words, cutting back on advertising hurt them in the long term much more than it helped in the short term.
I know that 2023 might look a little scary. Times are definitely uncertain. And while it’s a smart move to study your overhead and find administrative ways to be smart in a downturn, don’t do it at the expense of your long-term health by cutting off your advertising.
You’ll thank me later!