As the U.S continues to barrel deeper into the corona virus rabbit hole, the country drifts further into an economic recession. Businesses are furloughing or laying off workers or simply utilizing a skeleton service staff to maintain some semblance of continuity. The question that always becomes a major focal point during this time for many businesses is “Should I continue my advertising?”
Historically, the panicked reaction by most businesses is to drastically cut their ad spending. Indeed, in 2008, advertising spend in the U.S dropped by almost 13%. This naturally varied according to the medium. Newspaper spending dropped almost 27%, radio by spending dropped by 22%, followed by magazines with a decline of 18%, out-of-home by 11%, television by 5% and online advertising by 2%.
Contrary to conventional wisdom, there are numerous advantages to maintaining or increasing advertising spend during an economic crisis. For one, the media space becomes much less crowded and provides an opportunity to amply your businesses’ voice. Two, consumers look for reassurance from their favorite brands during a downturn. Three, advertising costs decline overall during a recession which can allow the business to have a expand their media buys into more of the advertising mediums.
McDonald’s famously announced a decision to cut their advertising during the 1990-1991 the 1991-1992 recession. Pizza Hut and Taco Bell decided to take full advantage of the ad space vacated by McDonald’s and as a result massively increased their sales; Pizza Hut b 61% and Taco Bell by 40%. McDonald’s sales declined by 28%.
The moral of the story? Advertising is essential. And even more so during a time of crisis.