According to the study, “These companies also judiciously increased spending on R&D and marketing, which may produce only modest benefits during the recession, but adds substantially to sales and profits afterward.”,” was published in 1927 and tracked the advertising investment and annual revenues of 250 companies through the depression and into the growth period following it.

As in most recessions, the effects depend greatly on the sector: people still have to eat and take care of themselves but can delay discretionary purchases. As a marketer, if I wrote a blog post telling you to increase marketing during a recession, I’d look a little self-serving (to say the least). And in any case, most businesses today already spend less than 50% on brand-building – dangerously below our recommended 60% – so there is certainly no sense in cutting brand building further unless survival depends on it. Put another way, people are not changing previous buying attitudes, they are simply prevented from exercising them.

Bernard Baruch said that it�s a recession when your neighbour is out of work (adding that when you�re out of work it�s a depression!).. In normal times, the IPA data argues for a balance between brand and activation spend in the ratio 60:40 for maximum business effectiveness.The IPA data on how campaigns balanced brand and activation spend was less extensive back in 2008, so there is some uncertainty in the findings, but the data suggests that a slight shift from the 60:40 optimum towards 50:50 might have been sensible in 2008.

This was characterized by a shift away from purely emotional advertising as advertisers felt more serious approaches fitted the mood of the people. Advertising through a recession Introduction. Market research company System1, who measure consumer response to new ads on a daily basis in the US and the UK, are not yet seeing any signs of “ad alienation” (as of April 2020) due to the introduction of social distancing. Not only is it predicted to be more severe and more all-encompassing – in terms of categories and countries – than any recession in living memory. As we have seen in China, now is not a good time to be a sub-contractor for a business serving discretionary consumer markets (e.g. They found that sales and profits dropped at companies that cut back on advertising. The study found that while most companies tightened their belts, the winners traded “lower short-term profitability for long-term gain, refocused rather than cut spending.”Specifically, the successful companies spent significantly more on selling, general and administrative (SG&A) costs (which include marketing) than those that lost market share.

Michelle Calcote King is an award-winning marketer with nearly 20 years of expertise in all things marketing, content, media and public relations. Buchen Advertising tracked advertising budget vs. sales trends for the recessions of 1949, 1954, 1958 and 1961. With appropriate sensitivity to the fearful state of most people, brand building may in fact be the best approach, as we will see.In some discretionary categories where revenues have fallen to levels that threaten the survival of companies, such as airlines and catering, there may be no choice but to cut all advertising to conserve cash. He is responsible for helping define the company’s strategic direction, leading its approach to M&A and partnerships, and driving Ebiquity’s profile in the marketplace through thought leadership and marketing communications activities. Of course, predicting what SOV a given budget will achieve in a rapidly evolving media environment can be difficult, so defending SOV likely requires a highly adaptable approach.The implication of falling SOV costs is that recessions can be a low-cost growth opportunity for brands. This recession is unusual in that having a common enemy – COVID-19 – has generated a level of community spirit (toilet roll panic buying aside) that far exceeds that seen in previous recessions. At that point, no single firm gains much by that increase. Can continued brand advertising signal important reassurance? The following charts examine three equal-sized groups of cases from the 2008 recession with different media investment strategies measured by Excess Share of Voice (ESOV) — the difference between a brand's share of voice and a brand's share of market — the key measure of investment. This means that when all restrictions are finally lifted there is likely to be an enormous collective release of pent up demand, something wise businesses will be prepared to service well. However, because this was also the early period of big data, online advertising revenue actually grew by about 20% in 2008.

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