Advertising during recession
Advertising during recession
But to me recession provides a wonderful opportunity for companies. Now consider the few myths that most CEOs have;
Myth 1 # All the companies are reducing the advertising budgets and hence the competition doesn’t demand doing so much of advertising. Wrong – This is just the right time for you to take charge and go one up against your competition and so if your competition is not doing advertising during recession – you have an opportunity
Myth 2 # People don’t buy much during recession and hence advertising wouldn’t reap in the benefits. Wrong – People don’t buy much during recession and hence you need to do more aggressive advertising to get people to buy.
Also some of the recent studies show that recessions have only a 2% reduction in people’s disposable income but despite that people tend to sit back and maintain liquidity. Worse is that companies don’t realize that by luring people through advertising they can get them to buy your product; even during the recession. Study done by McGraw-Hill’s showed that a 13 page advertising during recession increased company’s recognition from 32 to 45%. For 1980-85 recession all those companies which did not reduce their advertising budgets increased sales by 16 to 80% & most important was the fact that the increase in sales was not a temporary thing but permanent.
So though the question of advertising budgets during recession is something which has been asked during every recession and studies have shown that companies who did reduce suffered more and who maintained or increased did smart business, not many have gone ahead and gone with the same or more advertising. In 1975 GM and Ford used two different strategies and where GM kept with the same budget and Ford reduced budgets – so while GM increased the sales and Ford’s sales went down by 14%.
Now that leaves me with a question – If we continue or increase our advertising budget during the recession – wouldn’t that lead to controlling of recession?
Advertising during recession - To learn more about this author, visit Manik Kinra's Website.
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With most companies feeling the heat of reducing revenues and eroding net worth, one of the first things that CEOs decide to “save money” is reduce the advertising budget. Now this primarily depends on whether the company views Advertisements as expense or investment.
But to me recession provides a wonderful opportunity for companies. Now consider the few myths that most CEOs have;
Myth 1 # All the companies are reducing the advertising budgets and hence the competition doesn’t demand doing so much of advertising. Wrong – This is just the right time for you to take charge and go one up against your competition and so if your competition is not doing advertising during recession – you have an opportunity
Myth 2 # People don’t buy much during recession and hence advertising wouldn’t reap in the benefits. Wrong – People don’t buy much during recession and hence you need to do more aggressive advertising to get people to buy.
Also some of the recent studies show that recessions have only a 2% reduction in people’s disposable income but despite that people tend to sit back and maintain liquidity. Worse is that companies don’t realize that by luring people through advertising they can get them to buy your product; even during the recession. Study done by McGraw-Hill’s showed that a 13 page advertising during recession increased company’s recognition from 32 to 45%. For 1980-85 recession all those companies which did not reduce their advertising budgets increased sales by 16 to 80% & most important was the fact that the increase in sales was not a temporary thing but permanent.
So though the question of advertising budgets during recession is something which has been asked during every recession and studies have shown that companies who did reduce suffered more and who maintained or increased did smart business, not many have gone ahead and gone with the same or more advertising. In 1975 GM and Ford used two different strategies and where GM kept with the same budget and Ford reduced budgets – so while GM increased the sales and Ford’s sales went down by 14%.
Now that leaves me with a question – If we continue or increase our advertising budget during the recession – wouldn’t that lead to controlling of recession?
Advertising during recession - To learn more about this author, visit Manik Kinra's Website.
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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