Studies show that companies who keep advertising do better in tough times

… here’s the evidence.

Earlier this week, one of our sales columnists, Pat Bryson, wrote this:

Research shows that not only will they do better during the crisis, but when it abates, their sales will go up faster and higher than the businesses who went silent.

This statement, along with the other advice in her article  has generated a lot of interest from our sales and advertising agency readers.

One reader, George, asked us in a comment for more information on the research she quoted. So here it is.

The evidence about companies which keep advertising through tough times doing better than those who don’t, goes back about 100 years, and several studies in different eras have come to the same conclusion.

Pat wrote her first training session on this subject in 2008 following the crash of the US housing market. This subject has been studied since 1927 in every economic downturn. 

Pat has listed some of the studies below:
 

  • In 1927, Roland Vaile reported in the Harvard Business Review that companies who advertise the most experienced the biggest sales increases.

 

  • In 1949-54 and 1958-61 Buchen Advertising study showed sales and profits dropped when advertising was reduced and continued to lag for several years after the recessions ended.

 

  • Studies by the American Business Press examined the relationship between advertising and sales in 143 companies during the severe 1974-1975 downturn. They found that companies that DID NOT CUT ADVERTISING either year had the highest growth in sales and net income during the 2 study years and the following 2 years. In both the 1974/75 and the 1981/82 recessions there were long-range advantages of keeping a strong advertising presence.

     

  • 1981-82: McGraw-Hill Research showed firms that maintained or increased ad expenditures averaged significantly higher sales growth during the recession and for the following three years. Out of the 600 business-to-business companies analyzed, the companies that cut advertising in the recession of 1981/82 increased sales by only 19% between 1980 and 1985, less than companies that did continue to advertise. Companies that continued to advertise in 1981/82 enjoyed a 275% sales increase.

 
 Read Pat’s original article here, which includes tips on how to pre-empt cancellations and objections and whether to change messaging.

Pat holds regular 90 minute webinars on this topic. To participate, email her at [email protected]  There is normally a charge for the webinar, but if your station is in financial difficulty due to the virus, let her know and she may be able to reduce the cost.

 
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