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The Cost of Stagnance - Part 1/2

What brands lose when they sever customer relationships in a crisis - this is a summary of a post and review released by OCreative. For the full article, please click here.

When times are good you should advertise, when times are bad you MUST advertise

Andrea Koeppel, founder, principal and chief creative officer at Ocreative, penned this piece a year after the worst of the GFC. Koepel mentions many of the recession marketing advantages noted in Adgate’s Forbes piece – increased ‘share of mind’, a quieter market, cheaper media spend. But she goes even further, saying marketers brave enough to advertise during a recession, will see return on expenditures multiplied once the recession ends. Koeppel cites a McGraw-Hill study of the 1981-1982 recession, which found that B2B firms that maintained or increased advertising budgets saw significantly higher sales growth both during the recession and throughout the following three years. According to Koeppel, marketers brave enough to make themselves heard during a recession will also enjoy increases to not only income, but also profits. “This is in stark contrast to those companies that cut advertising both years and significantly reduced their profits during the recession, and for years following.”

Key Points

  • Advertising during a recession builds brand armour that will sustain through and after a time of crisis

  • Even for B2B companies, maintaining advertising budgets during a recession increases ROI and produces long-term sales growth

  • Companies that refrain from advertising during a recession risk a sustained negative impact on market share and sales growth when the market returns to equilibrium

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