thoughts on advertising during a recession

When times get tough, budgets get slashed. And the first thing to go is the advertising and marketing budgets. Makes sense. You’re not having to cut people. It seems like an easy line item to slash. No muss. No fuss. Return-on-investment analysis for marketing dollars spent is so doggone hard to measure, anyway. So, heck, why not? Makes the profit picture look a little rosier
But, for our clients that want to build a brand, that strategy is the exact opposite of what they should do. Studies suggest – strongly suggest – they should, in fact, increase, their advertising budgets.
A downturn is no time to stop spending on marketing, says Harvard professor John Quelch in the Harvard Business Review, “Brands that increase advertising during a downturn can improve market share and return on investment,” he says.
John Zhang, a Wharton marketing professor says, “If companies cut deeply into advertising in a down period, the cost to regain share of voice in the market once the economy turns around may cost four or five times as much as the cuts saved, as the downturn is not going to be forever.”
Studies of the last 6 recessions have demonstrated that companies which do not cut back their advertising budgets achieve greater increases in profit than companies which do cut back.
