Whatever You Do, Don’t Cut Your Ad Budget

If we’ve seen a recent pattern of topics from prominent publications, it’s the suggestion for companies to avoid cutting any of their marketing dollars. Harvard Business School, Knowledge@Wharton and Chief Executive are all pitching in to offer their reasoning on why a recession is the perfect time to not only maintain but actually increase ad budgets.

Modern day executives are looking to trim their expenses under the pressure of tighter budgets. Every year, professionals are asked to do more with less, and 2009 will be one of the toughest years in decades. When looking to reduce spending, why not start in the marketing department? After all, running a single-page advertisement in a magazine can cost as much as $150,000 (like People magazine), and social networking initiatives provide hazy forms of measurement when looking at results.

Why wouldn’t we cut out the ad department? We’ve heard the adage that sales increase with marketing. Decrease marketing and you’ll see a drop in sales.

John Quelch from Harvard Business School adds to the discussion by writing in his blog,

It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain consumers need the reassurance of known brands, and more consumers at home watching television can deliver higher than expected audiences at lower cost-per-thousand impressions.

Knowledge@Wharton agrees by adding,

As companies slash advertising in a downturn, they leave empty space in consumers’ minds for aggressive marketers to make strong inroads.

Aside from the immediate affects of sales, brand perception also changes. Products that are no longer in the marketplace begin their gentle march to the back of customers’ minds. Businesses should maintain a steady level of advertising. Brands are there for the best of times for consumers; they should continue to nurture and comfort consumers in other times as well.