Advertising budgets – why slashing them is a bad idea

Dec 3, 2008

The Stats are in: Slashing the Ad Budget is a Bad Idea.

Sending the target the right message at the right time can protect and increase brand loyalty both during and after a downturn. A McGraw-Hill study showed companies who continued or increased their ad campaign funding during the last recession had 256% higher sales than the companies who opted to cut, or halt their marketing budget. Sales after the economic recovery were also markedly higher. Furthermore, sleeping companies seeking to regain brand position after recovery paid 4 to 5 times the amount “saved” by cutting the advertising budget.

It takes courage and a view of the big picture to continue to spend during tough times. Yet now – while the competition falls silent, is the ideal time to voice your timely and relevant message. Customers will be receptive so long as you are sensitive to their current concerns and desires, and you continue to produce and deliver value for their dollar. There may be less to go around, but people are still spending. (Black Friday showed a 7.2% increase per shopper over last year, according to the NRF.)

Opportunity is here for those willing to invest in themselves. The odds, and statistics are on their side. We recently released a recession survival guide that discusses why now is not the time to stop spending money on advertising or pr, but it is the time to revise and refine how that money’s being spent. You can download a free copy from here –

And there’s a great article I read by the Knowledge@Wharton team (11/25/08) called When the Going Gets Tough, the Tough Don’t Skimp on Their Ad Budgets

For any business owner or marketing officer, it’s definitely worth the read!

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