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Advertising in Slow Times

Don't react rashly to falling sales by cutting your ad budget. See what deals you can get first.

Opinions expressed by Entrepreneur contributors are their own.

Q: If my sales start to fall off, should I cut back on my advertising?

A: No! It's the link to your customers! The answer lies in getting tougher with media negotiations and changing your message.

Getting tougher won't be all that difficult to do if business falls off, because when sales slide for companies like yours, it also slides for the media. You need each other to survive. Radio and TV reps will be looking to sell chunks of time to ensure your business, because it will free them up to look for fresh meat to fill the gaps in their budgets. They will be inclined to get creative and do what they can to keep you as a client, be it with special-value packages, deeper discounts for long-term or bulk contracts, or providing you with "free spins" when they can.

  • Special-value packages: creatively arranged blocks of time that give you the most commercials for your dollar, sometimes bundled with an on-air promotion. (See my column "Negotiating Radio Rates.") TV will do the same, and print will have special sections and programs to take advantage of.
  • Long-term contracts: You run your advertising for 26 or 52 consecutive weeks and receive a discount for doing that on radio and TV. Standard discounts are 5 percent for 26 weeks and 10 percent for 52 weeks. When times are tough, ask for that first discount of 5 percent to kick in for signing a 13-week contract. With print, the per-column-inch cost drops off dramatically after your first ad. So they get even very small advertisers into contracts right away. Ask your print or direct-mail reps for ways of saving in your production costs, choose to run in more specific ZIP codes, or ask for early discounts.
  • Next Step
    Make consumers come to you with Differentiate or Die: Survival in Our Era of Killer Competition by Jack Trout and Steve Rivkin.
  • Bulk contracts: You receive a discount for the number of commercials you run during a specific period of time. The more commercials you agree to run, the less each one costs you. You are not required to run them within consecutive weeks, as long as you use up the right number of commercials before the end date. These kinds of agreements are annual, but push to get your end date moved to perhaps 16 months instead of 12, and negotiate a lower-than-normal, per-spot-rate-giving you a break in two ways.
  • Free spins: This means that the rep does not lower the rate integrity of each commercial, but instead gives you a percentage of commercials "extra," at no charge. This tactic is strictly for the paperwork and gives the rep the ability to show that he/she sold the spots at the normal rate and at the same time provided you with more commercials for your money.

What you may want to look at is a change in your message, to advertise price breaks and special deals of your own or changes in inventory that are more appropriate for your customers who may also be tightening their belts. No matter what the economy does, you must fill the needs of your customers, whether that means engaging in customer loyalty promotions or providing extra value and service along with looking at what you sell and how you deliver it.

Kathy Kobliski is the founder and president of Silent Partner Advertising, where she oversees multimedia advertising budgets for retail and service clients. Her book, Advertising Without an Agency, was written for business owners who are working with small advertising budgets and can't afford professional help. You can reach Kathy via her website at www.silentpartneradvertising.com.

The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.