How Publishers Can Get Advertisers To Spend In A Recession

Nicholas Carlson|Apr. 14, 2009, 7:58 AM|10
Tags: Media, Internet, Advertising, Big Media, Publishing, Digital Publishing

How can a publisher or ad agencies get advertisers to loosen to their purse strings in the midst of a frightful recession?

The secret to thriving in the recession isn’t cutting costs in advertising or avoiding acquisitions, writes the New Yorker’s James Surowiecki. He says that 20th Century history shows it’s best to spend and spend big:

In 1927, the economist Roland Vaile found that firms that kept ad spending stable or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn’t. A study of advertising during the 1981-82 recession found that sales at firms that increased advertising or held steady grew precipitously in the next three years, compared with only slight increases at firms that had slashed their budgets. And a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D., and ad budgets, while companies at the bottom of the pile had reduced them.

But hold on a second! Don’t those studies just prove that recessions make strong companies stronger and weak companies disappear? No! says James. In fact, recessions are the best time for market-share trailing companies to make up ground and even become industry leaders.

That’s what Chrysler did launching and marketing the Plymouth brand line during the Great Depression. By 1933, Chrysler passed Ford as the number two automaker. James points out that Korean carmaker Hyundai has increased its marketing during this recession and already has seen the benefits, posting huge gains in market share.

Other products launched and heavily marketed during a recession include:

Kraft’s Miracle Whip in 1933
Texas Instruments’ transistor radio in 1954
Apple’s iPod in 2001

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