Recession Success Stories
10th November 2008
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FT's: Frances Brindle, the global marketing director of the Financial Times, said: "This new creative could not be more topical and supports the argument that cutting back on advertising spend in recessionary or turbulent times hands a significant advantage to your competitors. There is considerable evidence to suggest that companies that continue to invest in advertising in tough times emerge stronger than those that don't."

Fact: Faced with a downturn, many businesses cut advertising and marketing spend. But it's their biggest commercial mistake. In every recession of the past 90 years, independent studies show that the businesses who increase their advertising spend are the ones who survive the tough times and thrive afterwards.

Independent studies show that advertising in a downturn gives you increased share of voice, increased market share and increased profitability over time.

McKinsey study:

  • The companies who increased their spend in a recession were the only ones whose profits rose substantially when the economy recovered.

Read the McKinsey study

Patrick Barwise, London Business School Professor of Management & Marketing:

  • The advantages of maintaining or increasing marketing effort are greater than the short-term benefits of reducing spend.

Read Patrick Barwise's report

Hillier analysis of 1,000 companies on the PIMS (Profit Impact on Market Strategy) database after the early 1990s recession:

  • The companies who had cut their marketing budgets saw ROCE (return on capital employed) decline by 0.8% after the recession.
  • Those who increased their marketing activity saw an increase of 4.3%.

McGraw-Hill research, analysing 600 companies from 1980-1985:

  • The sales of companies who had kept advertising during the 81-82 recession had risen 256% over those who had not.

About the Author

Kesh M

Member since: 30th July 2011

Locally known as the best connected person in NW London. Kesh is an Advocate of the best local businesses and recommends who are highly regarded by their clients. He also is having the time of his life...

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