Advertising during a recession.

Does your company view advertising as an expense or an investment? How have others succeeded during a soft economy? These questions and others are answered in this special report.

(The following was excerpted from NW Ayer Inc.'s report: Advertising During a Recession: Key Issues anti

Whether to advertise during a recession is a question that has been raised by agencies and clients alike worldwide since the early 1920s. Unfortunately, to our knowledge, only the United States has examined and published data on the subject within the confines of a rigorous framework.

One might feel that the results are self-serving for the advertising industry, but remember, these studies were not conducted by ad agencies. The studies were conducted by economists, business security analysts, academicians and others who place severe intellectual and professional constraints on their investigations.

Some of the findings and examples are interesting. One example, which is noted by Wall Street analysts, for instance, attributes the 1975 setbacks of Avon Products and Hershey Foods at least in part to advertising cuts, and credits heavier advertising for the improved performance of Philip Morris and Revlon during the same period,

Also, the research indicates that during recessions, advances in sales can be made by shifting emphasis within advertising executions. Advertisements during a recession tend to stress quality and value, as well as new uses for old brands. This is primarily driven by the fact that commercials and advertising in general need to reflect the current consumer mentality, regardless of the status of current means.

With these introductory comments, let us look at the data available on advertising during a recession.

The Issues And The Opportunities

The question of advertising during a recession is one that has been asked many times over many years. Interestingly, the answer still does not seem clear to enough marketers.

The answer to the question is that advertising during a recession provides a unique window of opportunity for investment purposes to:

1) Build equity;

2) Solidify your customer base;