To cut back on advertising during a recession is often seen as a short-term cost-saving measure, but the fact is that marketing during economic uncertainty can actually cost less, and reap bigger rewards.
On the face of it, to reduce spending on advertising makes sense. While businesses struggle to keep the lights on, and their customers set stricter spending priorities, why continue to advertise?
Because it is the perfect time to capture attention and increase market share.
The practice of cutting back on marketing stems from the belief that there will be little impact on long-term sales. Research shows, however, a different story.
Numerous studies have been conducted on the short and long-term impacts of advertising during an economic downturn, such as the McGraw Hill study of the 1980s recession. The findings are clear: businesses that continued to advertise saw 256% higher sales than their counterparts post-recession. Those who chose not to advertise saw virtually 0% market share increase and a rise of only 18% in sales once the economy regained traction.
The adage we often quote is:
In times of prosperity, you should advertise. In times of hardship, you must advertise.
There are huge opportunities created by recessions if you are able to continue spending on advertising as a business. Of course, the results in terms of sales revenue need to be measured against the investment, but in this day and age it is simple to access the data that illustrates ‘if we spend x, our sales increase by y, and our return on investment is z’.
The conclusion is, if you are able to continue spending on advertising, an economic downturn is the best time to do it.