Apothecary

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Advertising in a Down Economy

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During a recession, the marketing budget is frequently the first to get cut. That is a misstep by many businesses. Businesses that advertise during a downturn are not only more likely to endure the recession; they also continue to collect the benefits after the recession is over.

Historic data demonstrate that aggressive marketing during recessions increases both market share and profitability.  The American Association of Advertising Agencies (AAAA) reports the following findings in a commissioned study Advertising in a Recession by Bernard Ryan Jr.

  • Buchen Advertising tracked advertising dollars versus sales trends before, during and after the recessions of 1949, 1954, 1958 and 1961. Not only did their study find that sales and profits dropped off at companies that cut back on advertising, it also found that, after the recession had ended, these same companies continued to lag behind those that had maintained their ad budgets.
  • A jointly-sponsored American Business Press/Meldrum & Fewsmith study of the 1970 recession found “that sales and profits can be maintained and increased in recession years and in the years immediately following by those who are willing to maintain an aggressive marketing posture.”

    A follow-up 1979 study further revealed “that companies which did not cut advertising expenditures during the 1974-75 recession, experienced higher sales and net income (during those two years and the two years following) than companies which cut in either or both recession years.”

  • Following the 1981-82 recession, McGraw-Hill Research’s Laboratory of Advertising Performance reported “that business-to-business firms that maintained or increased their advertising expenditures during the 1981-82 recession averaged significantly higher sales growth during the recession and the following three years than those which eliminated or decreased advertising. By 1985, sales of companies that were aggressive recession advertisers had risen 256% over those that didn’t keep up their advertising.”

Has your business cut its marketing budget recently?  What are you doing to continue reaching out to your current customers and attract new customers?

Written by apothecarycomm

2009/06/08 at 9:45 am