Advertising in a Bad Economy.

In a recession, the first dollars that a company usually cuts come from the advertising budget. Advertising in a recession is actually a smart business move to grow your business now and for the future.

McGraw-Hill Research conducted a study of U.S. recessions from 1980-1985. Out of the 600 business-to-business companies analyzed, the ones who continued to advertise during the 1981-1982 recession hit a 256-percent growth by 1985 over their competitors that eliminated or decreased spending.

American Business Press analyzed 143 companies during the economic downturn back in 1974 and 1975. Companies that advertised in those years saw the highest growth in sales and net income during the recession and the two years that followed.

The numbers aren't a fluke. They prove there's a reward for companies who are aggressive with their advertising efforts in a recession.

Here are even more reasons why you need to advertise your business in a bad economy:

Your Competition Won't
Most small businesses have a limited advertising budget. During a recession, it's easy to make up some of those dollars by holding back on advertising.

All that really does is open up the marketplace for that company's competitors. The presence the business has spent ad dollars on to build up is now an open field for the competitors that are willing to advertise.

Let's say you own an auto parts store. Consumers still need your company, no matter what the economy. Cars still break down. They still need windshield wipers and people will even buy those tree air fresheners. Your company can be the one the customer chooses because you've made your own presence known.

You Can Create a Long-Term Position for Your Business
Standing out in the marketplace is hard enough when you and your competition are battling it out in the ad world. As your competition cuts back on ad spending, your advertising can cut through that clutter.

Consumers may not be spending as much but they are still spending. If you're not the company they think of when they do spend, your sales will decrease. While your competition is cutting back, you have the chance to be the company consumers spend with now while gaining their future business as you continue to advertise in good times and bad.

To Establish an Advertising Contact
This is the perfect time to establish a relationship with the person you'll be doing business with at TV stations, radio stations, magazines, online, etc. An Account Executive can be your go-to contact to get your ads in prime placement, negotiate good deals on rates and even get extras thrown in for your ads.

You can also use this new relationship to further grow your business. Talk with the AE about sponsorships, advertising trades and partnering.

Get Better Deals on Advertising
This is where you can use your new advertising contact. Ad inventory still has to be sold. TV stations, radio stations and magazines still have budgets to make.

Now's a good time to get deals on your ad space. You can get more exposure through more ad placement and even freebies added into the mix. If you're trying to get airtime on TV, for example, a station might also offer online advertising on its website as part of the deal. Negotiations are easier for the advertiser in a recession.

You Can Speak Directly to Customers Looking for Bargains
Don't be afraid to address the bad economy in your advertising. Customers are looking for good deals. Some national advertisers are a prime example of this.

Travelocity aired a simple commercial to announce its Silver Lining Sale. In the first three seconds, you see the words, "We know times are tight."

Wal-Mart is running an effective ad campaign. The commercials don't say, "Hey, come on out. We've got electronics, clothes, sporting goods, prescriptions and more at a low cost." Instead, the ads focus on very specific items and how much you'll save over a year by purchasing these items directly from Wal-Mart. The world's largest retailer posted its best sales performance in nine months, with a 5.1-percent sales gain in February 2009 as a result.

Hyundai's ads touting the Assurance Plus program is another example of an advertiser that's not ignoring these tough economic times. In its ads, Hyundai announces its program that will pay your payment for three months if you lose your income. If you still can't pay after three months, take your car back to the dealership.

Is it an effective program? Hyundai has already seen a 4.9-percent sales gain as of March 2009 while Toyota is down 36-percent.


In a bad economy, there are many opportunities to expose your business to new customers that aren't always possible in a good economy. Every one of them can be explored to help you solidify your place in business and stand out from your competitors.

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