‘Smart companies don’t cut marketing spend in a recession’

A question posed to FTW recently has been: “In times of recession, do you cut, maintain or increase your advertising?” To find an answer, we approached Rob Hill, Cape Town-based strategist and John Gale, KZN MD of advertising agents Ogilvy. “Advertising is no perfect science,” the two men agreed. “But there are certain trends that exist, and these are the basis of much of the advertising theory.” And there is theory about advertising in a recession, mainly based on the relation between advertising spend, and an advertiser’s likely market share. In time of crisis, our sources suggested, one of the first budgets to be "sacked" is marketing communication. “However,” they added, “smart companies know that it's then that it becomes crucial to communicate wisely to stay alive. “And, in recession, you need a bigger bang from every advertising buck.” The basic advertising truth is that, when times are tough, maintaining your ad spend – not necessarily increasing it – will also increase your share of the overall voice in the marketplace. And, if others are cutting their spend by big numbers, the advertiser’s voice share will automatically increase by commensurate amounts. “There is no question, and there are lots of assessment studies to prove it, that with an increase in voice your marketing performance is also likely to be maintained through the tight times, or even lifted.” Our commentators also agreed that the economy had been extremely tough for marketing, forcing many companies to lower their overall spend, or at the very least to get smarter and more careful about where they spend. “But,” they added, “we depend on clients to see the value (as we do) of continuing to invest in marketing during a downturn.” For more answers to the problem of marketing and advertising in a recession, the Ogilvy agency is carrying a separate feature on the subject – on the web address: ogilvyonrecession.com