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Marketing during a recession Print E-mail
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Sunday, March 15, 2009
THE NATIONAL Bureau of Economic Research (NBER) confirmed on December 1, 2008, that the United States economy has been in a recession since December 2007. Many economists believe that the current recession has hit worst since 1981-82. Times are rough, but that doesn’t mean you should lower your advertising budget; you actually should maintain or raise it, or just advertise more smartly. A recent study by McGraw-Hill Research showed that companies that maintained or upped their advertising during the 1981–82 recession, had gains in sales in the short-run as well as the long-run. The McGraw-Hill Research study analysed 600 companies from 1980 to 1985 and found those that advertised aggressively throughout the recession had sales of 256% higher than the ones, which cut back on advertising.

Recessiion Graph

 

You’ll note that the aggressively competitive companies represented by the dark bars had only a slight edge over their competitors in the years leading up to the recession. Their sales growth was in the middle of the pack as the recession hit. But while their competitors cut back in year one, or year two, or both, they continued to invest in getting their message out.

These firms grew nicely during the recession, but the real news happened in the two years following the end of the economic downturn.

Two years into the recovery, the competitors who did cut back had all stalled out at levels the aggressive companies had blown past during the recession. By the end of 1985 the companies that didn’t cut back had grown a whopping 256%.
 
Wolf Creek Promotions, LLC

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