sales trends for the recessions of 1949, 1954, 19. So whilst others survived, P&G thrived.īuchen Advertising tracked advertising budget vs.

They did this in between light-hearted drama stories aimed at women which is how we get the phrase ‘soap opera’. Proctor & Gamble (heard of them?) continued to invest in advertising during the Great Depression, turning Oxydol into a household name.

During the Great Depression, Post cut back significantly its advertising budget and rival Kellogg’s doubled its advertising spend, investing heavily in radio and introducing a new cereal called Rice Krispies, featuring “Snap,” “Crackle” and “Pop.” Kellogg’s profits grew by 30% and the company became the category leader, a position it has maintained for decades.Īnother example is 10 years later in the 1930s. In the 1920’s, Post was the category leader in the ready-to-eat cereal category. Marketing from the Great Depression of the 1930s to the 1960s “I decided not to participate in recessions.” Those who reduced advertising ended up 7% below their pre-recession levels. Specifically, Vaile found that companies who continued to advertise came out 20% ahead of where they were pre-recession. Startlingly, these companies performed worse than those which did not advertise at all. Not just during the recession but also in the following three years.īusinesses which lowered their ad budget saw their sales decline both during the recession and then for the following three years. He assigned each company to one of three categories:Ĭomparing each category to performance, he was able to demonstrate that the firms which increased their advertising budget during the recession enjoyed higher rates of sales than their competitors. Written for his Masters, it tracked the performance of 250 major US companies from the post-war recession years up to 1923 into the boom years that followed. In 1927, Roland Vaile published his seminal Harvard dissertation (Marketing Moves Founder Adrian Hardy says he remembers it well!). Marketing in the post World War 1 recession of the early 1920s So the companies that continued talking to them in the period when they couldn’t purchase are the ones they reach out to first when they can.īut don’t take my word for it, listen to legendary marketer Roland Vaile. Just as we all spend days if not weeks researching any major purchase. And dormant customers make purchasing decisions long before they make the actual transaction. But in my opinion people in a recession, particularly this one, aren’t closed – they’re just dormant. And we’ve not even begun to factor in lower ad costs caused by less demand.Ĭlearly, if no one is buying then it doesn’t matter. So a two time increase results in three times market share and four times its nearest rival. The company that doubles however sees its share increase from 10/100 to 20/65, so 10% becomes 30.8%. They might even figure this is a result as a 50% reduction in budget equates to just a 23% drop in share. If nine halve their budget whilst one doubles it, nine companies’ audience share each decreases from 10/100 to 5/65. At a time when other companies reduce advertising activity, those that increase it have an exponentially larger audience to market to.įor example, take ten companies advertise equally to the same audience. Interestingly, the evidence across 100 years suggests that those companies which don’t reduce, but instead increase their marketing budgets during recessions, actually receive proportionally higher sales than those which lower spend or don’t spend any at all. Why do companies that invest in marketing during a recession do better in the long term? This time round we’re discussing the folly of companies which reduce marketing during a recession in order to save money. And give them no reason to ever leave yet every reason to stay. Talent that is hardly ever available because their companies truly know, acknowledge and value their work. In my last article I talked about the great talent that became available in the last two months. We are receiving more enquiries being made by forward-thinking businesses who want to get a hard start on their competitors. Companies pausing recruitment until lockdown is over and we are starting to now see the green shoots of recovery. We’ve seen it first-hand here at Marketing Moves.

The theory being that if there are no customers to market to, you don’t need marketers. Very often, marketing is the first head on the block.

By Mel Day, Marketing Moves CEO Mel Day, CEOĬompanies which are marketing in a recession – of all shapes, sizes and sectors – often have to make the difficult decisions about where, when and why to cut costs. “Stopping advertising to save money is like stopping your watch to save time.”Ĭompanies which increase marketing in a recession are proven to do better than their competitors in the long run.

Decade in a day legendary marketer