Should I Advertise During a Recession?

Consider this ad from 1935 and how it affects buying today.

In 1929, rival cereal makers Kellogg’s and Post were in a close race to win the breakfast cereal market. When the Great Depression started, Kellogg’s maintained their advertising spending while rival Post cut back.  At the end of the Depression, Kellogg’s had achieved a category dominance that they maintain to this day.

Just because your customers are not buying at recent levels does not mean they have stopped reading, thinking, or formulating opinions about the companies and brands they buy from.

Advertising dollars spent during slow times are the best investment a company can make.  Your ad dollars work harder in slow times. If your competition is less active, this is a time to steal market share and share of voice.

A study by McGraw-Hill Research found that companies that maintained (or increased) their marketing throughout the 1981-82 Recession saw an average sales growth of 275 percent over the next five years! But those companies who cut their marketing saw paltry sales growth of 19 percent over the next five years.

Act now! Increase your Marketing…

Remember, the best reason to advertise in 2009 is….

2010.

UPDATE: MARCH 24, 2009

As marketers we are so often faced with the dilemma of having to cut advertising in times of economic softness.  Here is real data that supports the above comments regarding Post vs. Kellogs:

McGraw-Hill Research study of over 600 Businesses found that:

1981-1982 – business that maintained or increased their ad spend during this time

* Averaged higher sales growth during the recession and in the following 3 years!
By 1985 – sales of the businesses that maintained or increased their ad spend during that recession

* Sales had risen 256% over those that had cut back on advertising
Likewise in 2001 – another study found that aggressive recession advertisers

* Increased market share 2 ½ times the average for all businesses in the post-recession
In 2002 – the Strategic planning institute illustrated that during economic expansion

* Although 80% of businesses increased their advertising spend there was NO improvement in market share

* Why? - because everyone has increase ad spending!

Full Disclosure: I got these stats from a paper called Innovating through a Recession by Professor Andrew J. Razeghi at the Kellogg School of Management at Northwestern University.