McGraw Hill Research’s Laboratory of Advertising Performance (LAP) analyzed the performance of 600+ companies before and after the 1980-81 recession. The results proved interesting.
Those companies that maintained or increased their advertising during a recession saw a 275% increase in sales growth during and for the three years following the recession. Companies that had cut back or stopped advertising experienced only a 19% increase.
Additional findings highlighting the value of advertising during hard financial times can be found in American Business Media’s “The Importance and Value of B2B Advertising During Times of Economic Uncertainty.”
Reduced Advertising During Recession Negatively Impacts Consumer Perception
More than 48% of U.S. adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates the business must be struggling. Likewise, a vast majority perceives businesses that continue to advertise as being competitive or committed to doing business.
The Ad-ology Research study, “Advertising’s Impact in a Soft Economy,” analyzes consumer perception about businesses that continue to advertise, and those that do not, in the current economy.The study finds advertising appears to play a key role in consumers’ view of how a business is doing, and by not advertising, businesses may be sending a warning signal to current and potential customers.
Other key findings:
TV, newspaper, direct mail, and Internet are the top four media from which consumers saw/heard an ad within the last 30 days that led them to take action.
40% of consumers use coupons more now than a year ago.
Most consumers are as willing or more willing to pay more for ‘healthy’ or ‘organic’ products than they were a year ago.
A ‘deeply discounted price’ was the number-one factor that would make consumers more likely to purchase a big-ticket item (+$1,000)
Store Web sites ranked second only to search engines as the way consumers research products and shop online. |
