Should Businesses Invest in Advertising During a Recession?

Woman thinkingIt may seem logical for businesses to cut down on ad spending in times of economic downturns.

At first glance, it may seem like saving money — instead of spending money — is the smart thing to do. That’s why, in economic crises, some companies significantly reduce their advertising budgets.

Be that as it may, a company that spends more money on advertising, despite a recession, is almost always more profitable when the recession ends.

Recessions are always finite in length; they eventually come to an end. History has shown that the company that continues to be aggressive in its marketing campaigns will have the upper hand when the economy starts to improve.

Cutting back on advertising in a time of recession comes with the danger of rendering the company invisible to its actual and potential customers and clients. Companies may justify the cutback by saying that the market has no buying power in a recession anyway, but that may not be the best approach for the business.

Companies that continue to spend money on advertising in a recession remain visible to consumers. When the consumers do regain the money to buy, they will more likely buy from the company that continued its advertising.

When the recession passes and consumers start getting more money, they will want to buy the products they couldn’t afford during the crisis. Aggressive advertisers will get the customers first when the recession ends.

The money spent on continued advertising campaigns will be more than returned by the increase in profits the companies will get when the recession ends. Just because the consumers can’t afford to buy in the meantime, doesn’t mean they will stop noticing ads.

Investing more on advertising will also give hope to the employees, investors, and customers. Companies that reduce advertising spending in times of recession may send a message of weakness – that the business is not strong enough to withstand a financial crisis.

An appearance of weakness will encourage customers to look for other places to buy. Worse, it will encourage the company’s workers to start looking for others places to work.

However, by appearing aggressive in ad campaigns during a recession, a company exhibits the message that it is capable and dependable. This brings comfort to the minds of the customers, employees, and investors.

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