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Mark A Cella on Recession Advertising

In the article Burger King to Boost Ad Spending, which appears in the April 17, 2009 online publication of AdAge.com, author Emily Bronson York quotes Burger King’s chief marketing officer, Russ Klein, explaining the philosophy behind his company’s strategy of substantially increasing advertising spending during the present economic downturn.

Clearly seeing favorable good fortune during recession:

“…there is strong historical evidence around companies that step up with their innovation and advertising and their ability to move through economic downturns and they emerge with stronger brands on the other end.”

Mark A Cella on Recession Advertising

Jim Surowiecki, author of Hanging Tough, published by New Yorker Magazine on the financial page back in April of 2009, advocates that much research indicates businesses who regularly devote resources in marketing and R&D during hard financial times end up extraordinarily better monetarily.

Mark A Cella on Depression Advertising

Research by economist Roland Vaile, in 1927, discovered “firms that kept ad spending stable or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn’t.” Also:

“A study of advertising during the 1981-82 recession found that sales at firms that increased advertising or held steady grew precipitously during the next three years, compared with only slight increases at firms that slashed their budgets. And a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D. and ad budgets, while companies at the bottom of the pile had reduced them.”

In a very large study of business conduct, by Strategic Planning Institute, derived that corporations which decreased investing in advertising during recession arose far slower in the following years after economic hard times, as opposed to free-spending competition.

Mark A Cella on Depression Advertising

Kraft brought out Miracle Whip in the great depression and it became the #1 dressing across the USA in only 6 months. The transistor radio was launched in the 1954 deflationary period by TI, and Apple launched its iPod in the 2001 recession.

Perhaps the most compelling example of successful recession opportunity is illustrated with Kellogg’s profound success during the Great Depression. Surowiecki relates that:

“While Post Cereals…cut back on advertising (during this period,) Kellogg doubled its ad budget and by 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty percent and it…became…and remains the industry’s dominant player.”

History proves repeatedly businesses that increase market budgets benefit tremendously during and after recessions.

In the most trying of economic times, those that are able to rise to the challenge by capitalizing on the opportunities presented can prevail in this game of survival of the fittest.

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