Don’t Cut Your Marketing Budget in a Recession

Perhaps the most widely ignored recession survival "rule," is to not cut back on marketing efforts. A McGraw Hill study done during the early 1980s recession divided firms into those that continued to spend on advertising versus those that cut back. Researchers found companies that continued to spend doubled their sales and profits. Those that cut back lost about 20 percent of sales and profits. The most dramatic gains came in the first two years of the recovery when businesses that had continued to spend enjoyed sales and profit growth of 273 percent. Those non-spenders, they had 20 percent growth in sales and profit after five years compared to 1980.