The Effect of Recession on Advertising

As marketers in times of economic unrest, we are unfortunately faced with the likelihood of reduced advertising spending.  While this seems like a logical principle, the following data suggests that when times are tough, the tough should continue to advertise.

A History of Positive Effects on Advertising during a Recession:

In 1929: Customers bartered everything from farm animals to coal for a La-Z-Boy chair months before the stock market crashed, and the company did everything they could to keep customers comfortably reclined in their chairs.

In 1932: Revlon became one of the most recognized cosmetic brands in the world.

From 1981-1982: Businesses that maintained or increased their ad spend during this time averaged higher sales growth during the recession and in the following 3 years.

By 1985: Sales has risen 256% over those who had cut back on advertising of the businesses that maintained or increased their ad spend during that recession.

In 2001: Aggressive recession advertisers increased market share 2 ½ times the average for all businesses in the post-recession.

In 2002: There was NO improvement in market share although 80% of businesses increased their advertising spend during this time of economic expansion.

* Why? – Because everyone has increase ad spending!

In 2003: Apple continued to invest on ad spending when the Dow was at historical lows over a 10-year period.



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