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I think Seth Godin outlined marketing's Catch 22 best in his book The Purple Cow (and I am paraphrasing here): When times are tough the tendancy is to conserve capital vs. when times are good the tendancy is to not be aggressive.


As marketers we are so often faced with the dilemma of having to cut advertising in times of economic softness. But here is some real data that you can use to illustrate why that is a bad idea.
McGraw-Hill Research study of over 600 Businesses found that:
1981-1982 .... business 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 of the businesses that maintained or increased their ad spend during that recession
* Sales had risen 256% over those that had cut back on advertising
Likewise in 2001 .... another study found that aggressive recession advertisers
* Increased 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 has increase ad spending!
Full Disclosure: I got these stats from a paper called Innovating through a Recession by Professor Andrew J. Razeghi at the Kellogg School of Management at Northwestern University. Not only did I thank him for writing this paper, blogged about it, tweeted it but I also invited him to do a podcast with me so stay tuned!

Continue reading "Statistics On Advertising During a Recession" ... Read the full article

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ABOUT THE AUTHOR

Paul Dunay is director of global field and interactive marketing for Bearing Point (www.bearingpoint.com).