No $ for Marketing in Downturn? Evidence Says That's a Mistake!

The historical evidence is clear. Companies that want to win in the long run, MAINTAIN or INCREASE their marketing budgets during a downturn, when the ad rates are lower.

Dr. Gerard Tellis of The Marshall School of Business at USC has conducted a study of the recessions in the last 110 years. The recessions are growing less frequent and of shorter duration. Of interest to us is the fact that those who invest in marketing and advertising during the recessions come out of the recession with much stronger brands. Kellogg's did this in the 1930s to gain considerable ground on Post Cereals, for example.

Russ Klein, Chief Marketing Officer of Burger King is doubling down on his investments. He told Advertising Age: "There is strong historical evidence around companies that step up with their innovation and advertising and their ability to move through economic downturns and emerge with stronger brands."

Dr. Tellis' research has shown "There is strong, consistent evidence that cutting back on advertising during a recession can hurt sales during and after the recession, without generating any substantial increase in profits."

Bernard Ryan, of the American Association of Advertising Agencies wrote in Advertising in a Recession in 1991 "One study after another, of recession after recession, shows that those who reduce spending usually lose market share and sales. Furthermore, they take longer to recuperate...The bottom line? The advertiser who does not cut back can move ahead during the recession and afterward, capturing share from those who, hesitant and unsure, do cut back."

Content may still be king. We can help with that with "Voice of the Customer" studies to get the right messaging and words. What do you think?