Especially in down economic times, marketers need to get the most out of their advertising and other marketing dollars. In today’s world, more than ever though, the effectiveness of advertising is very dependent on the volume and general tone of consumers’ conversations (principally online) about your product and company.

The strength of effect is directly proportional to the volume of the chatter, and the direction of the effect (positive or negative) is correlated to the tone of the conversations (positive or negative). As the chart below illustrates, the lower the volume of activity, the less impact it will have on your marketing efforts, regardless of the tone. However, the greater the volume, the more it will affect your marketing efforts—if the tone is negative the effect will be negative and if the tone is positive the effect will be positive.

When consumers voice their opinions on the internet, they are broadcasting them to everyone who wants to read (or hear or see) – around the globe. People create their own blogs, post to others’ blogs, participate in online communities, write reviews for e-pinion and e-tailing sites, upload videos, etc. And those posts remain there for years to come. Therefore, any new person interested in finding out about your product will see the chatter—old and new—and will be influenced by it.

So, assuming a high enough level of online conversations (consumer “buzz”), how does the tonality of that buzz affect the effectiveness of your advertising? As the chart below shows, it has a significant impact.

It might at first seem counterintuitive, but increasing advertising expenditures and overall presence (reach and frequency) to combat negative buzz (bottom right quadrant above) can actually have the exact opposite effect – it can hurt both your long- and short-range sales efforts. Principally because of all of the online conversations over the internet, advertising today has very little effect on consumers’ positive or negative perception of your company or products. Rather, advertising spreads awareness of your message/positioning (just not the authenticity of it). Today, once people are aware of you, more and more of them will turn to the online conversations to assess the features and quality of your products and services. So, if an overall strong negative buzz exists about you, increasing advertising will just make more people aware of the market’s negative impressions about you.

Conversely, if there is a strong positive buzz, then the positive effect of strong advertising programs will be amplified. However, that’s not to say that you should limitlessly increase your advertising budget. As with most situations, there are diminishing returns to increased efforts, as illustrated below.

Therefore, a structured measurement and analysis feedback loop is critical in any advertising program to help marketers achieve their goals without overspending.

So, given all of the above, how should internal marketers and advertising agencies optimize their advertising efforts? One way that Domus, Inc., a Philadelphia-based advertising agency, does this is by incorporating an aggressive “Internet Presence Management” program as part of the overall strategic plan it develops and executes for its clients.

Bruce Barton, co-founder of the BBDO ad agency, once said, “In good times people want to advertise, in bad times, they have to.” He lived and worked during the Great Depression, so he understood advertising in bad times.

During this current economic slowdown, companies must make hard choices with their marketing budgets. Many will cut them, sometimes drastically, but it’s worth considering the alternative. Maintaining or even strengthening marketing efforts might seem counterintuitive, but it might not only help you weather the storm—it might even strengthen your position. By maintaining or increasing your marketing efforts vis-à-vis the competition, you can attract a higher percentage of the market who is still interested in buying.

Much more so than in good times, the goal now must be to make the most effective use of your marketing budget for the current environment. Marketing consulting agencies, such as Domus, Inc., can help you optimize your efforts to make the most out of your budget.

In an upcoming post, we’ll explore some of those strategies.

How should marketers adjust or change their spending, strategies, and tactics during a slumping economy? Obviously, financial constraints play an increasingly critical role during these times, but does that simply imply across-the-board cuts?

If we think of marketing activities as analogous to guiding rafts down a river, we can represent bull markets as riding down a fast, majestic river—the waters and the raft flow virtually unimpeded regardless of what stones or other obstructions are deep below. Similarly, every marketing decision we implement and expenditure we approve appear to be justified because sales continue to be robust.

On the other hand, when the economy is slumping, the corresponding analogy is that same river during a drought. Water flow is weak and water levels are low. So the people steering rafts cannot float quickly downstream; moreover, the lower waters expose rocks, branches, and other potentially dangerous obstacles. Similarly, it appears that most marketing decisions and expenditures are fruitless at best and detrimental or disastrous at worst.

So what should be the guiding strategies? As a marketer, picture yourself as the river traffic manager, responsible for getting as many rafts downstream as quickly as possible with as little trouble as possible. When the water is high and running fast, you’re busy enough just watching the rafts float by that you can barely effect much of a difference.

However, when the water is lower and the traffic is slower, you have more time to analyze everything about the operation. You can discern traffic patterns, you can note which obstacles present the biggest danger or impediment to swift progress, etc. With that knowledge, you can develop and execute plans to improve operations so that when the water starts rising the traffic will be noticeably better without you having to step in at the busiest times.

Strategically minded in-house marketers and advertising agencies, such as Domus, Inc., are right now busy using the opportunity provided by the slumping economy to make all of their marketing efforts more effective in anticipation of the bull market soon to come.