When times are good, you should advertise.
When times are bad, you must advertise.

Finally. Third-party proof I can use with the CFO to justify our budgets. Ran across this and thought it was a great follow-up to the article I sent in December... Michael Gass is an ad agency consultant. His historical data is great. I’ve sent it to lots of clients and thought you might also find it useful as you build budgets and campaigns within your firm. Marketing can and should be a significant contributor to the sales and profits of a company. It's worth fighting for anything that can help your company accomplish its goals! While the notes below are B2C, the principles are the same.
Hope it helps you.

Sean
sean@fitzmartin.com
205-322-1010

"The U.S. has experienced nine recessions since World War II, which means we’ve lived in recessionary times one year out of every six. 

In a recession, marketing usually is the first budget item to be cut, even though it is the most important tool a business has during this difficult time. 

With the current economic downturn, experts are predicting possibly a severe recession. This leaves many businesses wondering where they can cut costs. Studies and experience prove marketing should be last on their list.

 DMB&B Communications(an ad agency based in L.A.) endorsed a Fortune review and advised, 'When faced with [penny-pinching] consumers, it helps to shift your ad campaign from messages like luxury and status-enhancement to efficiency and value. 

RMR & Associates provides this list of brands that creatively changed their messaging to reflect the new customer mindset and counter a recession:

•  A-1 Steak Sauce’s message that 'A-1 Steak Sauce isn’t just for sirloin anymore.' Indeed, its ability to enhance flavor applied equally to hamburger.

•  Dow, maker of Ziploc food bags, shifted funds from Glass Plus cleaner to help introduce a new line of Ziploc freezer bags that protect the freshness of leftovers.


• Quaker Oats capitalized on two successful recession messages. First it reversed a long-term decline in sales by increasing spending for the message that its grain products are inexpensive sources of protein. Then it stressed value as actor Wilfred Brimley promised, 'A bowl costs you one nickel and four pennies.' That message worked so well that Quaker allotted half its budget to it. Result? Powerful sales.


•  Lipton successfully promoted its Cup-a-Soup line as not only conventional but inexpensive.


• Wendy’s met the recession with a head-on message: 'Look, I know you have less to spend these days, but that doesn’t mean you have to eat less.'

• Ikea had a similar idea: 'What recession? Sure the country’s going through a recession. That doesn’t mean you have to.' It worked. Conclusion: 'There is no more important time to be close to your customer and his/her attitudes and needs, and no better time to create trust and make your brand, even in the most image- and emotionally-oriented categories, an easy, reasonable choice.' 


A series of six studies conducted by the research firm of Meldrum & Fewsmith showed conclusively that advertising aggressively during recessions not only increases sales, but increases profits and market share. This fact has held true for all post-World War II recessions studied by American Business Press starting in 1949.


• Stop “branding,” but get the word out about your firm! Doublespeak maybe, but it underscores a point. Branding is a nebulous term that is often misinterpreted by non-marketing management people. They perceive branding as a fuzzy-minded waste of money. Stop branding. Call it sales and marketing. Why the term sales first? Well, it’s the only word they really care about.

1. Kraft salad dressings and Jif peanut butter both raised marketing budgets during the last recession and increased sales by 70% and 57%, respectively.

2. Pizza Hut increased their marketing budget and increased sales by 61%

3. Taco Bell increased sales by 40% by increasing their advertising expenditures.


4. Wal-Mart smothered competitors with 'Every Day Low Prices' during the 2000-2001 post-bubble slowdown.

5. During the 1989-91 recessionary period, most of the beer industry cut budgets, but Coors Light and Bud Light increased theirs and saw sales jump 15% and 16%, respectively.

Agencies know that advertising in an economic downturn is not a drain on their clients' profits, but can actually significantly contribute to an increase in profits and market share. McGraw-Hill Research analyzed 600 companies covering 16 different SIC industries from 1980 through 1985 in a study of U.S. recessions. The results showed that business-to-business 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.

 A series of six studies conducted by the research firm of Meldrum & Fewsmith showed conclusively that advertising aggressively during recessions not only increase sales, but increases profits. This fact has held true for all post-World War II recessions studied by American Business Press starting in 1949.

 One major advertiser summed it up best.

  'When times are good, you should advertise. When times are bad, you must advertise.'"