If you have an ad agency, hopefully they've been encouraging you to continue to advertise during these difficult economic times. Maybe that sounds self-serving, or even counter-intuitive, but it's more than just a widely held opinion among advertising professionals — it's a truism based on data:
• During the recession year of 1970, sales and profits increased that year and in the years that immediately followed for companies that maintained an "aggressive marketing posture" (study by American Business Press and Meldrum & Fewsmith).
• During the recession years of 1974-1975, companies that continued to advertise outgrew their competitors in sales growth and net income throughout the recession and, again, in the years that immediately followed (based on analysis of 142 companies by American Business Press and Meldrum & Fewsmith).
• During the recession years of 1981-1982, companies that continued to advertise saw a median growth of 256 percent compared to their competitors who stopped or reduced ad spending (based on analysis of 600 companies by McGraw-Hill Research).
• Also during the recession years of 1981-1982, businesses that increased media advertising gained an average of 1.5 points of market share (study by Cahners and Strategic Planning Institute).
• During the recession years of 1990-1991, firms that increased their advertising budgets and added marketing staff were twice as likely to pick up market share (study by Management Review of American Marketing Association members).
There's no reason to believe this economic downturn is any different. In fact, with message clutter greater than ever, many marketers feel that now, during this difficult economy, is the most important time to maintain and foster the connection between your brand and your customers.
This is also the time to take advantage of your competitors' missteps. As the Harvard Business Review puts it, "advertising is an anti-recession tool ... (when) top executives should cash in on the opportunity that rival companies are creating for them. The company courageous enough to stay in the fight when everyone else is playing it safe can bring about a dramatic change in market position."
Companies that succeed through thick and thin know that advertising contributes to profits. They look at advertising not as an unfortunate expense, but as an important means of achieving a company's goals. They don't stop selling when times are tough, they sell harder. They don't follow the competition, they outsmart them.