The Basic Argument for Advertising in a Recession

advertising in recession

from The Wall Street Journal
(publication information unknown)
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When times turn bad, they’re made worse by hesitation, halfway measures, and panicky decisions. Such as the decision to reduce or eliminate advertising. The fact is, companies that maintain or increase their advertising spending during recessions get ahead. A less crowded field allows messages to be seen more clearly, and that increased visibility results in higher sales both during and after a recession.

Recessionary Advertising Works

Studies by the American Business Press examined the relationship between advertising and sales in 143 companies during the severe 1974/75 downturn. They found that companies that did not cut advertising either year had the highest growth in sales and the net income during the two study years and the following two years. The studies also proved that companies that cut advertising during both years had the lowest sales and net-income increases during the two study years and the following two years.

And not surprisingly, companies that cut advertising during only one of the recession years had sales and net-income increases that fell in between.

Long-Term Benefits

A study by McGraw-Hill of both the 1974/75 and 1981/82 recessions confirmed the long-range advantage of keeping a strong advertising presence. It found that companies that cut advertising in 1981/82 increased sales by only 19% between 1980 and 1985, while companies that continued to advertise in 1981/82 enjoyed a 275% sales increase.

An industry-specific study published by the Harvard Business Review found that airlines that increased their advertising expenditure during 1974/75 increased sales and market share in both years, while airlines that cut advertising in both years lost sales and share both years.

The results of all three studies are consistent, clear and unequivocal: Those companies that advertise during a recession have better sales than those companies that don’t.

The way to minimize a downturn and take maximum advantage of the upturn is to maintain a strong communications link with your buying public.


Recession? Don’t Run Scared

by Marcia Yudkin

During a recession, scared businesses tend to cut back on marketing expenses. This appears to be the smart bet. After all, most customers have become more cautious about spending. So why not conserve your resources, wait out the downturn and have funds to spend when the economy picks up?

In fact, smart businesses expand during a recession because they know there will be a shakeout caused by the scared businesses shrinking.

During any recession, there are always more than enough clients out there to keep you busy if you continue to market, and market smartly. Capitalize on your strengths. Make the most of your business relationships. Create or revive programs that enable customers to move ahead. (I just filled a seminar teaching a highly marketable specialized skill.) Above all, stay upbeat, putting the dynamics of self-fulfilling prophecies in your favor.

If you behave like the scared businesses, or target them, you will contract. If you market to the smart businesses during a recession, you will continue to prosper.

It’s up to you.


Get ideas for marketing moves during a recession from articles I’ve written, including “Clone Your Best Customers,” “Getting New Business Fast” and “Creating a Reputation.” Inspiration costs nothing! Marketing strategy articles: http://www.yudkin.com/marketingmoves.htm


The Sky Is Falling

By Robin Sieger

Speaking to people in business at the moment, there appears to be a storm on the horizon. The newspapers and media are having a field day discussing the rate of inflation, the spiraling cost of oil, the increased number of redundancies, the drop in house prices, the difficulty encountered when borrowing money from the banks, and the all-time favorite the cost of living.

If you’ve spent time living in Great Britain, or know British people, you will know that our favorite topic of conversation is the weather, which is not as surprising as it may sound as we still are the only nation on earth where you can have all four seasons on the same day.

But the favorite topic of conversation now has moved on to the economy (so things must really be serious). The economic downturn has affected everybody, even successful business friends of mine have quite seriously told me they think they’re going to go broke. No amount of positive attitude in the world and well intentioned clichés are going to change their thinking. They have borrowed heavily from the banks to build a business and now the rate of interest is increasing and the value of the businesses is decreasing. Bad times!

I can’t remember the magazine, but it was about nine years ago that I read a fascinating article in which four billionaires were interviewed. The one thing they had in common was they were all over 80 years of age. The interviewer basically asked them about the 20th century from a business point of view. The four interviewees said they had lived through a number of recessions, and one estimated in the 20th century there had been eight periods of recession. They all saw them as occupational hazards.

One of them gave an analogy based on a love of sailing. He said when the wind blows in, you get the sails up and travel fast and far. When the storm approaches, you take in the sails, make the ship safe and hang on. He added when you sense the worst of the storm has passed, you get your sails back up as fast as you can and get going. The biggest indicator of hope is that after the storm comes a period of calm and opportunity that you must never lose sight of.

For many of you, there is stormy weather ahead—how severe and how long it will last I don’t know. I only know that I will keep my eye keenly on the horizon and the moment I sense the storm is breaking start, I’ll put up all the sails I can. In business, recessions come and go just as opportunities come and go, but you must never lose sight of the opportunities that the storms often wash up on the shore.

In the meantime, I’m going to wait until people start talking tentatively about the weather again, which will be a good sign.


Robin Sieger, from Scotland, now divides his time between between Europe and America. He is a successful businessman, best selling author, and broadcaster with offices in the UK and Charlotte, NC. He is a leading success strategist and has a world-class reputation as a conference speaker who passionately delivers high-impact presentations that are informative, inspiring, and entertaining. Robin’s humor and ability to emotionally connect with audiences has seen him become the first choice speaker at major conferences around the world. For more information visit www.siegerinternational.com or email robin@siegerinternational.com.

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