Marketing Seminars - marketing during the ecconomic slowdown
Advertising Guru David Ogilvy asked question in his book Ogilvy on Advertising “What should you do in time of recession, when you need every penny to sustain your earnings? Stop advertising?
“If you stop advertising a brand which is still in its introductory phase, you will probably kill it — forever. Studies of the last 6 recessions have demonstrated that companies which do not cut back their advertising budgets achieve greater increases in profit than companies which do cut back.
“In a Morril survey of 40,000 men and women involved in the purchase of 23 industrial products over five years, it was found that share-of-market went up in bad times — when advertising was continued.”
He goes on to source the American Business Press that had pie charts of sales of companies which cut back their advertising expenditure during the 1974-75 recessions compared with companies that did not cut back. The companies that did not cut their advertising budgets had more than doubled their sales 2 years later while sales from the companies that cut their advertising had barely gone up 50%. Three years later sales were down for companies that had cut their advertising while it was up for those that did not. The net income for these companies also followed the same suit over the same period of years — those companies that did not cut their advertising had more than tripled in sales, while companies that did cut back during the recession had barely doubled.
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