Increasing Marketing Costs During an Economic Downturn

posted by Ted on December 25, 2011

Online reference website Juggle.com recently sent out a press release stating that it spent more on marketing than ever before – despite the economic downturn – and that its aggressive advertising strategy appears to be working.

Nice to know – but the motivations and reasons that Juggle.com gives for its strategy of increased spending, provide some interesting views on advertising during an economic downturn in general.

As a starter Juggle.com refers to an older study by McGraw-Hill that analyzed 600 business-to-business companies and concluded that businesses who continued to advertise during the 1981-1982 recession enjoyed over 2.5 times the growth compared to competitors that decreased spending during the same time period.

But there’s more.

Juggle.com also refers to Harvard Business School professor, John Quelch, who says: ‘This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.’

Stephanie Leffler, CEO of Juggle.com, states that ‘downturns create exceptional marketing opportunities for reduced prices…agile companies capable of making marketing decisions on short notice are rewarded a greater bang for their advertising budget’.

As a mainly online business Juggle used to spend most of its advertising budget online but now that has changed: lower advertising rates afford businesses the opportunity to explore new or other advertising channels.

Mounting evidence supports the idea to increase spending when times are tough. Research firm Meldrum & Fewsmith, showed conclusively that advertising aggressively during recessions not only increases sales but increases profits as well.

Tags:advertising,business,direct marketing,internet marketing,marketing,marketing campaigns,strategies,targeted marketing