Should we spend money on advertising during a recession?

In the current economic climate do you stick, twist or ditch your Marketing/Advertising budget? When there is an economic downturn in business it makes perfect sense to cut back where prudent…….. Or does it? Well many research studies show that companies who advertise strongly during a recession experience an immediate increase in their revenue and even stronger growth once the recession ends.

If you spend more you will make more: A McGraw-Hill study of 600 businesses found that those who maintained or increased their advertising spend saw higher sales growth during a recession and in the years following. In fact, the study found those who maintained or increased their Marketing budgets experienced a 256% increase in sales compared to those who cut their budgets. Another study found businesses who advertised during a recession saw their market share increase 2.5 times.

It is a mistake to think that waiting until a recession is over before you resume advertising is the smart thing to do. Consider this; a third study revealed 80% of the businesses who waited until a post-recession economic recovery to advertise, saw a near 0% increase in market share, which of course is obvious since everyone else began advertising again.


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* The McGraw-Hill Research study of over 600 Businesses during the early eighties recession found that between 1981-1982 businesses who maintained or increased their Marketing spend during this time averaged higher sales growth during the recession and in the following 3 years!

* By 1985, sales of the businesses who maintained or increased their Marketing budget during that recession found that sales had risen 256% over those who had cut back on advertising.

* Likewise in 2001 another study found that aggressive recession advertisers increased their market share 2 ½ times the average for all businesses in the post-recession.

* In 2002, the Strategic Planning Institute illustrated that during economic expansion, although 80% of businesses increased their advertising spend there was NO improvement in market share……… Why? – Because everyone else had increased their Marketing budgets too, thus cancelling each other out!


But what if you have no budget for Marketing during this economic downturn? Well if you haven’t got a budget, nothing is going to change that fact, but time and time again it has been shown that the smart thing to do during a recession is to find the resources AND ensure that you have something of value and of interest to your potential customers to advertise and go for it! You may have the best product or service in the world, but if no-one is aware of this, all that revenue potential will remain just untapped potential.

Times are tough for all of us, so do the smart thing and become creative with what you have. Ideas cost nothing more than the time it takes to conjure them up, and if things have gone quite time is a resource you’ll have in abundance. But remember this, even if you have it in abundance, time is precious and it waits for no-one. As the research proves, invest now, realise the benefits later and watch your competition disappear in your rear view mirror as you blast out of this recession miles ahead of the competition.


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