Advertising in a Recession

It has often been said, and it’s well worth repeating, that there is no better opportunity to increase your market share than a recession.

According to the Association of Business Media Companies: “History has proven that companies that maintain or increase their advertising investments in periods of economic downturn increase their sales and share of the market both during and after the downturn”.

Note the word ‘proven’.  This is not just wishful thinking. The mechanism by which this effect comes about is pretty clear: most companies will reduce their advertising and marketing in a downturn. They advertise less, they cut back on exhibitions, their visibility decreases – we saw it at the recent London Boat Show, some big brands were nowhere to be seen.  If a competitor maintains its advertising and marketing activity during that period, its visibility will be proportionately higher in relation to those who cut back.  Its relative profile in the market will rise, it’ll get more of the available business and consequently a greater market share – which, history has shown, it will keep once the recovery comes.

To achieve that sort of jump in market share when times are buoyant is much harder and much more expensive.  So money spent on advertising and marketing communications in the downturn is better spent than when times are good.  For smaller companies, the rewards are particularly tempting – gaining those few notches in market share is that much more significant!

Robin Petherbridge

March 2013