As the saying goes “When times are good you should advertise. When times are bad you must advertise.”

 

We’re all expecting a significant and lengthy economic recession to follow in the wake of COVID-19’s unprecedented impact on our lives – the first recession in over a decade. With all recessions comes cutbacks, as businesses, wary of declining profits turn towards marketing and to reduce advertising expenditure. Last time around, spending dropped in the United States by around 13%. This time, we expect it to be even higher. What any recession also provides however, are opportunities to those businesses willing and able to make gains in this environment.

There are three key reasons why this proves to be the case time and time again:

The noise level in your category has dropped.

When all your competitors are dropping their advertising spend, it’s the one opportunity your brand has to make gains, reposition the brand, introduce new products or services to the market in a way that simply would otherwise be drowned out in the noise.

The cost of advertising always drops during recessions.

Increasing “share of voice” leads to increasing “share of market.”

The Kellogg’s story is perhaps the best example of this. Back in the 1920’s, a brand called Post was the category leader when it came to cereals. But then the Great Depression hit. Post cut its advertising. In contrast, Kellogg’s doubled it and in doing so their profits grew by 30% and they ultimately became the category leader for decades.