Advertising in a down economy can be a challenging endeavor especially when sales are down and money is tight. Creating a contingency plan or “what if” plan can help mediate the headaches that come along with a downturn.

Start by reviewing your company’s financials and cash on hand to plan accordingly for the rest of the year. Review your current marketing strategy to determine what is scheduled or planned for the next few months in order to decide whether you can continue and maintain your advertising spending based on your current budget situation. If cuts are to be made, look into the most efficient media (lowest cost bringing in the highest number of leads) and use that as a baseline of what to keep.

Reduction in some of your advertising dollars due to a lowered budget may be necessary to maintain a balance with your company’s goals and financial well being. Be smart and look at your advertising results by media channel to determine which ones will make the cut.

The key to maximizing your dollar is to know your customer base and how to reach them when times are tough. If you can, spend money on analytics by getting a demographic analysis of the area that you cover. The information gained is great insight on the demographic make-up of your customers. Information such as age, household income, and buying habits will play a major role in determining who your clients are and which advertising vehicles they use. This investment will pay dividends down the road and will help in targeting your media buys in the future.

Another key factor is looking where potential customers reside. In addition to reaching untapped areas, review what media channels cover those areas to find new alternatives. Finding these alternatives, especially in a down market, has proven to keep businesses afloat and prosper during these trying times.

McGraw-Hill Research analyzed 600 companies from 1980-1985. The results showed that firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales of companies that were aggressive recession advertisers had risen 256% over those that didn’t keep up their advertising.

In addition to the McGraw-Hill study, a series of six studies conducted by the research firm of Meldrum & Fewsmith (below) showed that advertising aggressively during recessions not only increases sales but increases profits.


(Source: Meldrum & Fewsmith)

Remember that economic downturns are temporary and will eventually reverse. In the meantime, keep ahead of the game by creating a plan, analyzing your client base, reviewing alternative advertising options, and stay in front of your customers. Proactive thinking and a positive outlook go a long way in protecting your company’s future.