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When the economy gets tough, good businesses keep advertising going!


When the economy gets tough, good businesses keep advertising going!


With the question of Australia facing tough economic times being more about when, not if, there is much discussion about what this will mean to advertising and marketing communications spend.

We have seen it before and tradition says that when the economy gets tough, the marketing department gets going!

But is that the right strategy for businesses to follow?

Well, based on research, it would appear that those companies who put the razor to marketing spend in hard economic times are in fact doing themselves a great disservice.

Conversely those who maintain their advertising during economic downturn, enjoy clear benefits in terms of market share and profitability when things pick up!

Research by Professor Patrick Barwise for the London Business School found:

he most successful firms maxmise long-term shareholder value by maintaining or increasing their ad spending when the economy slows down and weaker rivals cut back.

While we must accept that there will be some advertisers who will take the easy option to appease short-term shareholder value and will slash marketing during the tough times, the good news is that more and more companies are heeding the research advice.

With all this talk of a slowdown, what are your experiences? Are you finding it harder and harder to justify your marcomms budget to the board? Or are they heeding the research advice too?


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