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5 Minute Read

How to Advertise in a Recession or Downturn

5 Minute Read

Marketing in a recession

In recent weeks and months there is a lot of uncertainty, anxiety, fear and panic that has been created as a result of the Coronavirus or COVID-19 as it is now called.

For us as business owners, salespeople and marketers this means we are looking at very rough economic times and it's almost guaranteed that there will be a recession of some level. A business “slowdown” is inevitable in any case.

We have already seen the cancellation and postponing of trade shows and events like the Sydney Build Expo the Royal Easter Show, Australian Healthcare Week and many more.

These were events that businesses like yours were expecting to be able to generate new leads, show of new products and network with suppliers and clients. Over a 12-month period these events help generate more than $13 billion in direct value added to companies. This opportunity is now gone – at least for the next 6 months and maybe even longer.

We now need to be smarter with our marketing budgets to replace these lost opportunities with new ones.

Salesforce Australia scrambled to re-invent the live events model this month - only 10 days out from their “World Tour” that was to be held in Sydney with 15,000 delegates scheduled to arrive on the 4th March 2020. This was transformed into a totally online experience and we expect many events and companies to follow that lead in the coming months where they can.

Why Should we Keep Advertising?

The first question most business owners and leaders ask is should we even be advertising and marketing in times like these and the answer is always a resounding “yes”!

As Lou Barrett, Managing Director of National Sales at News Corp Australia said last year – “it's a mistake to cut your advertising budget and it's an expensive one!”

She points out that there is plenty of evidence to prove that advertising during a downturn is a good idea.

  1. McGraw-Hill Research conducted a study of the 1981-82 recession in the US and what happened in the years after. Of the 600 companies it looked at, the ones that continued to advertise during the recession hit a 256 per cent growth rate by 1985 over their competitors that cut spending.
  2. American Business Press analysed 143 companies during the 1974-75 US economic downturn. Companies that advertised in those years saw the highest growth in sales and net income during the recession and the two years that followed.
  3. A study from Beykent University in Turkey shows that neglecting marketing efforts during an economic downturn will weaken a brand and make it less profitable in the long run

There is also The Advertising In A Downturn report released in 2008 by the UK’s Institute of Practitioners in Advertising (IPA) which spelt out the problem: “Following a budget cut, a brand will continue to benefit from the marketing investment made over the previous few years. This will mitigate any short-term business effects and will result in a dangerously misleading increase in short-term profitability.”


“The longer-term business harm will be more considerable but will not be noticed at first. Two key constituent brand relationship metrics – brand usage and brand image – suffered considerably when brands ‘went dark’ for a period of six months or more.”

This IPA report is now 12 years old, but its findings and advice are still important, particularly in the current environment. It’s worth reading the report just to get these key messages:

  1. Cutting ad spending in a downturn will only help defend profits in the very short-term.
  2. Ultimately the brand will emerge from the downturn weaker and much less profitable.
  3. It is better to maintain share of voice (SOV) at or above share of market (SOM) during a downturn: the longer-term improvement in profitability is likely to greatly outweigh the short-term reduction.
  4. If competitors are cutting budgets, the longer-term benefit of maintaining SOV at or above SOM will be even greater

Smart Companies Spend More

There are many blogs and articles on this topic and they all agree that companies which enter a recession with a reasonably healthy balance sheet and who increase marketing spend instead of recoiling, fare far better during the economic slowdown and often end up industry leaders because of it.

The concept is simple; even when times are tight, consumers never completely stop spending. They just look for cheaper prices or better value. When companies slow or stop their marketing spend, they vanish from the consumer’s mind too. Even if they don’t disappear completely, subconsciously, consumers begin to entertain doubts about them; they start to think of the brand as weak or fading and will often move to a competitor who is maintaining or increasing their advertising. It’s simple really - if two people are talking to you, and one stops and leaves the room…. you’re only going to listen to and be influenced by the one who stays and continues talking.

Clearly there are rewards for the companies that are focused and brave enough to keep spending during tough times. History shows that they will reap the benefits when economic conditions improve.

There are plenty of examples we can point you to do some research on if you like – Companies that grew in the depression like Sutton Tools, Rheem and Australian Paper (APM) in Australia and  Proctor and Gamble, Chevrolet and Camel Cigarettes in the US.

How should we advertise in a downturn then?

Provided your business has been managed well you can spend wisely - and also spend more - on marketing and advertising during these tough times and you will catapult ahead of your competition. Fight the urge to recoil and circle your financial wagons. Don’t cut your marketing budgets, and don’t stop advertising. You can’t sell your products and services if no one knows what's for sale.

Remain steadfast but be cunning and think creatively - look for opportunities that offer you more bang for your marketing buck. Right now we are seeing massive usage of sanitiser item as like the promotional hand sanitiser. As you keep investing in advertising when others are not, desperate media outlets will offer you aggressive deals to get your ad dollars - so you’ll win even more as you can get more for less. Keep advertising and you’ll be the voice that your consumers hear and remember - so that when things turn around, you’ll be the leader of the pack.

Contact us here or email us at for more ideas on how to make the most of the situation.