The effect of marketing through a recession

05Feb09

Forecasts and analysis on the recession are being avidly sought at present.

While the commercial environment has of course changed in the last decade, with the growth of digital retailing and social networking a possible key difference from earlier times. I was very interested to read the information below from McGraw Hill that examines trends in recessions. There is also a comment below about the benefit to brands that market their way through a recession.

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McGraw¬Hill has studied each of the recessions and economic slowdowns for the last five decades. The researchers’ findings clearly prove that those companies that continued to be aggressive in sales and marketing during these economic downturns experienced revenue growth of 275% during the first full year of the next recovery. In contrast, those businesses that cut back on sales, marketing, and advertising enjoyed only a 19% increase in revenue during the same period.

There is also further comment and analysis available at Integrated Resource Management : HERE

This coverage comments on the following:

In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies from 1980-1985. The results showed that business-to-business Firms that Maintained or Increased their Advertising Expenditures during the 1981-1982 recession Averaged Significantly Higher Sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales of companies that were Aggressive Recession Advertisers had Risen 256% over those that didn’t keep up their advertising.

In addition, a series of six studies conducted by the research firm of 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 studied by The American Business Press starting in 1949.

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Tags: Advertising, McGraw-Hill, Recession