Sales and profits decline for companies that cut advertising during economic downturns and this holds true for years after the recessions ended.

• • •

I Am Not a Lead

The Man in the Chair

Are You a Fly-By-Night Company?

Common Misconceptions about Lead Generation Programs

How IT Products are Bought

Branding or Lead Generation?

How to Market to Development Managers

Advertising in a Recession

>> Marketing in a Well

Should You Cut Your Marketing Budget?

Harvard Business School Says...

Marketing in a Recession, The New York Times, 3/26/2009

Hanging Tough, The New Yorker, 4/20/2009

• • •

Ted Bahr
Publishing Director
SD Times
ted@bzmedia.com

• In a well-known study of U.S. recessions, McGraw-Hill Research analyzed 600 companies from 1980-1985. Results showed firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the next three years, compared to those that eliminated or decreased advertising. By 1985, sales revenues for companies that were aggressive recession advertisers had risen 256% over those that limited their advertising.

• In January 1982, Cahners Publishing Company, and Strategy Planning Institute, released a report outlining the results of an extensive study of the PIMS database. The study showed businesses that increased media advertising during a recession gained an average of 1.5 points of market share. The underlying reason is that competitors, especially smaller, marginal ones, are less willing or able to defend against aggressive firms."

• During the 1974-75 recession, companies that did not cut advertising experienced higher sales and net income for that period, and for the two years that followed, than those companies that cut advertising. (ABP/Meldrum & Fewsmith)

• A study tracking advertising spending and sales before, during and after the recessions of 1949, 1954, 1958 and 1961, revealed that sales and profits declined for companies that cut advertising. Long after the recessions ended, these companies lagged behind competitors that had maintained their ad budgets. (Buchen Advertising)