I jack up advertising spending and win the market.
I've generated over $1 billion in sales using ONE strategy.
Used it in every recession - 2000, 2009, and 2020.
I've never shared it publicly before.
This thread might make you a millionaire.
I jack up advertising spending and win the market.
During recessions, CFOs take over and businesses play on defense. They start to cut costs.
Why? Marketing is generally the easiest thing to cut. It makes CFOs feel like they're making instant impact on profitability.
In 2009, the global economic pullback was just -0.7%.
But Advertising Spend dropped a whopping 10.1%.
The most "Efficient Growth" companies maintained or increased their marketing spending during the recession. And broke away as winners.
In 2000, the Internet Bubble popped. Everyone stopped advertising online.
It was almost like everyone decided that the internet was a fad that was over.
Performance marketing.
I noticed that ads on my site were actually bringing them sales.
These other websites had a ton of traffic.
During 2000, it seemed like all advertisers pulled back.
Ad spots that would normally go for $5,000, were selling for $1,000.
And turned it into a very profitable business that led me to be Google's 2nd biggest client at one point.
Lyrics websites at the time had the most internet traffic after porn. Like 500 million eyeballs.
I bought up exclusive advertising rights on these lyric sites.
There was a lot of uncertainty at the time and everyone was ready to take my money.
I blitz-scaled the business by 500%, from $2M to $12M in profit in just 1 year.
I know this because they sustainably increased their marketing spending by 300%-400%.
In some cases, they were the only companies left in their respective category.
My new company Jocalio, is building a backbone infrastructure for independent jewelry retailers.
We integrate, drive customers to these stores, and supply jewelry to them.
Most of those stores were forced to stay closed during COVID.
And then we saw the data showing customers buying different types of jewelry. Pieces that can be seen on Zoom calls, such as earrings.
So we doubled down on this.
The competitors in each of their markets were sleeping. Scared to market.
They cut all their costs, especially marketing.
And those who were already the #1 players in the market, just put a ton of distance between them and the smaller players.
Many of those smaller players didn't do so well.
I've shared 3 stories of how I've doubled down on marketing in 3 recessions and it worked every damn time.
The key is to use those dollars effectively and adjust the messaging with the times.
For example:
2022 - People have less disposable income, but a big minority is still flush with cash. So our advertising makes our entry price points lower, and top price points higher to capture both sides of the market.
This is exactly when you want to figure out how to do more marketing, not less.
Because your share of the voice goes way up.
When your competitors drop their spend by 50%, the customer sees 10 minutes of ads from You and 5 minutes each from 2 businesses.
After: 10 out of 20 minutes = 50% of the share of voice.
Roughly 1.5X the attention for NO EXTRA COST.
So if you cut in other areas, but focus on growing your presence through marketing, come expansionary times, your exposure and gravitas will be 2X bigger than each of your competitors.
I try to reply to everyone.
Follow me @ValKatayev for stories on entrepreneurship. https://t.co/zXco4qbp7L
I've generated over $1 billion in sales using ONE strategy.
— Val Katayev (@ValKatayev) November 6, 2022
Used it in every recession - 2000, 2009, and 2020.
I've never shared it publicly before.
This thread might make you a millionaire.
