Cut advertising, cut off your head

LAST UPDATED: 19 Mar, 2012 @ 12:54
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THINKING of snipping your advertising budget?

Think again. A series of six studies conducted by analysts Meldrum & Fewsmith showed conclusively that advertising aggressively during recessions not only increases sales but increases profits.

This fact has held true for all post-World War II recessions, and as one major business-to-business advertiser summed up: “When times are good, you should advertise. When times are bad, you must advertise.”

And here is the chart to prove it.

Undertaken by global financial advisors McGraw Hill it shows how advertising during recession is good for business in the long run:

COMPARISON OF SALES AND AD REVENUES

advertising

The study undertaken during the 1981-82 recession showed that 600 companies covering 16 different industries had better sales growth if they advertised.

Tracked from before the recession in 1980 through to 1985 when things picked up, the results showed that firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth. This was both during the recession and for the following three years.

Indeed, by 1985, sales of companies that were aggressive recession advertisers had risen 256 per cent over those that didn’t keep up their advertising.

You’ve been warned.

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