Advertising through a recession: cut or hold

The reflex in a downturn is to cut advertising, because it is one of the few large costs that can be stopped this month without redundancies or contract penalties.

What the evidence says

Studies of advertising through recessions, going back to the 1920s and repeated in every downturn since, converge on the same finding: brands that maintained or increased spend during a downturn gained market share, and kept most of it during the recovery.

The mechanism is not mysterious. When half the market goes quiet, the same budget buys a much larger share of the attention available.

The order of cuts

If the budget must fall, the sequence matters more than the amount.

Cutting activation first is common and self-defeating: it removes the spend that was producing this month's enquiries.

Change the message before the budget

In a downturn buying behaviour shifts. Risk aversion rises, decisions take longer, and price sensitivity increases without price becoming the only factor.

Three adjustments usually pay more than any budget change: emphasise risk reduction, so guarantees, fixed prices, references; make the entry point smaller, offering a survey, a trial, a phased project; and lengthen the follow-up, because decision cycles stretch and enquiries that went cold in three weeks now go cold in twelve.

The opportunity nobody takes

Downturns are the cheapest time to buy media and the easiest time to hire. Rate cards soften, notice periods on inventory shorten, and negotiating power moves to the buyer.

If cash allows, this is when to negotiate a twelve-month arrangement at rates that will not be available again.

The one thing not to do

Do not go dark and then return loudly. Six months of silence loses the accumulated recognition; a large relaunch spend then has to rebuild it.

Continuous small presence beats interrupted large presence, in a downturn more than at any other time.