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MYTH - We Should Stop Advertising In A Crisis

date 6th April 2020
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These are uncertain times. New Zealand is in lock down, with many of us working from the confines of our homes. None of us have faced a pandemic of this nature, we’re concerned and we don’t know what will happen with the economy – or our businesses.

While it may be tempting to hunker down and stash our marketing budgets, the reality is that if we cut spending and cut activity we will be worse off in the recovery. Now is the time to maintain or in fact increase our advertising budgets.

Many sources have investigated the role of advertising in times of economic downturn, as far back as 1927 when the Harvard Business Review saw that brands who continued to advertise saw a greater ROI than those who did not. A McGraw-Hill research project also documented that brands who continued to advertise in the 1981-1982 recession saw a 275% sales increase over the following five years.

So much research exists on the topic that in 2009 a research paper titled ‘A Critical Review and Synthesis of Research on Advertising in a Recession’ analysed all of the available literature (40 reports internationally). They categorically found that brands fare better when they continue to advertise than when they do not.

While Kiwis remain indoors their consumption of media is likely to increase. Radio is considered an essential need as it delivers trusted news – something we are all looking to now to keep us informed. Advertisers who increase their spend at this time will have an opportunity to grow their market share and brand salience, which will positively affect their sales when we inevitably go into recovery.

Throughout this period we’ll keep you informed of radio listening habits as information becomes available. Contact us to find out more.

Sources: “The Use of Advertising During Depression”- Harvard Business Review 1927. McGraw-Hill Research 1985. A Critical Review and Synthesis of Research on Advertising in a Recession 2009.

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