by: David Polinchock
Not much I can add here, other then to say no matter how many times I've seen studies like this, companies still cut back. And then they wonder why they don't come out of the bad times as strong as they thought they would. Thanks to Adrants for the tip!
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You know that tired old mantra as to why it's smart to advertise during a recession? Ever wonder why it's regurgitated ad naseum every time the economy tanks? Because it's true! Yes, advertising during a recession is the right thing to and there's research top back that up.
A McGraw-Hill study of 600 businesses found businesses that maintained or increased their ad spend saw higher sales growth during a recession and in the years following. In fact, the study found those who maintained or increased their ad budgets experienced a 256 percent increase in sales compared to those who cut their budgets. (Emphasis mine)
Another study found businesses that advertised during a recession saw their market share increase 2.5 times.
And if you think waiting until the recession is over is a smart thing to do, consider this; a third study revealed 80 percent of the businesses that waited until a post-recession economic expansion to advertise saw zero increase in market share. Which, of course, is obvious since everyone else began advertising again.
Sadly, not many companies take these facts to heart. Rather, they recoil, close the wallet and pray. Other realities come into play such as the indisputable realization that if there's no budget, there's no budget. And all the desire in the world to advertise during a recession isn't going to change that sad fact.
But...if you can beg borrow and steal, study after study proves, time and again, it's the smart thing to do.