Advertising in a downturn

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.



	The De Beers "Shadows" campaign, which ran at a time of recession, is estimated to have increased sales by an annual average of 8% over three years. What's more, De Beers profits recovered by 21% in 1993 compared to the previous year. Renault launched the Clio in 1991, the same year that new car sales in the UK declined by 21%. With advertising awareness of the "Papa and Nicole" campaign peaking at 56%, the Clio delivered increased profit through premium price positioning. In the 1930s depression, Kellogg's maintained its marketing spend while Post did not. Kellogg then dominated the dry cereal market for the next half-century. Source: FT desk research