Companies we partner with often send us interesting articles and reports to read. We recently received a link to an article published on Knowledge@Wharton, the online business journal for the Wharton School, from Dennis Lacognata from Prompt Mailers. The article is published here. Thanks Dennis.
The article discusses advertising during recessions. Here’s an exerpt:
Research shows that companies that consistently advertise even during recessions perform better in the long run. A McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise.
For companies that do stay the course and continue to advertise into a recession or increase their promotional activities, the key is to craft messages that reflect the times and describe how their product or service benefits the consumer. For example, companies might be tempted to emphasize price in a recession, but that only works for companies like Costco and Walmart that are built around a core strategy of providing low prices year after year, says Lodish. He points to the current Walmart campaign, “Save Money. Live Better,” as a successful approach to the recession.
Dean Jarrett, senior vice president of marketing at The Martin Agency in Richmond, Va., which developed the Walmart ads, acknowledges the campaign began in 2007 before it was clear a harsh recession was building. “We can’t claim we knew a recession was coming, but “Save Money. Live Better” is dead on-point with who they are and what they want to be.”
The article echoes our stance on fundraising during the economic downturn. If organizations cut spending when it comes to acquisition, they’ll have a harder time making up for that later on down the line.
Stay the course.