Action Local Canada

In the face of an economic downturn, the inclination is to eliminate nonessential spending. And because of its size and disconnection to daily operations, ad budgets make easy targets. But they're probably not the best targets. Time and time again, history deems advertising critical to not just preserve market share during downturns but to actually gain an advantage. Consider that cutting back on advertising is precisely what your competition is doing. History is rich with... examples of companies that thrived by exploiting those cutbacks. For example, Volkswagen dominated the import market until the 1973-'75 recession when it cut its ad budget. But then-upstart Toyota doubled down and surpassed Volkswagen in 1976, leaving the German titan in its dust. During the 1990-'91 recession, Taco Bell and Pizza Hut took an unprecedented 28-percent bite out of McDonald's sales when the fast-food heavyweight decided to sit it out. Maintaining or even increasing ad budget also offers opportunities to introduce new products or programs. In early 2009, at the depths of the Great Recession, Amazon released its second-generation Kindle. The push to market it earned the mail-order giant more than a quarter greater market share. Obviously no two downturns are the same. And this one certainly is unique. But all downturns have one thing in common: they inevitably end. As Nariman K Dhalla wrote in Harvard Business Review, businesses that maintain or increase marketing budgets, "not only come out of a recession stronger, but they are also in a better position to benefit when the eventual upturn occurs." At face value, downturns look terrifying. But when viewed from another perspective, they look like opportunity. As Dhalla noted, "The company courageous enough to stay in and fight when everyone ese is playing safe can bring about a dramatic change in market position." So while your first inclination in the face of economic adversity may be to gird up your loins, it may actually hurt your company's bottom line. If nothing else, this is the time for you to be brave, double down, and gain an edge over your competition. Talk to your rep about our incentives like free ad space and payment deferrals. https://www.forbes.com//when-a-recession-comes-dont-stop/ http://oaaa.org//Public%20PDFs/General/Harvard%20Review.pdf