1. RECESSION

2. ADVERTISEMENT

3. Advertise in Recession???
YES
NO

4. Role of Advertisement in Recession
Rishi Aggarwal
IIT ROPAR

5. RECESSION
Recession is shrinking of the economy for two consecutive quarters
(=6months) with a decrease in the GDP (=Gross Domestic Product)
or “significant decline in economic activity lasting more than a few
months.”
The Recession Cycle

6. In a Recession Consumers are
Seeking
1. Offers that provide reassurance
and confidence
2. Purchases that minimize risk
3. Familiar brands that reduce
uncertainty
4. Purchases that offer extra value

7. ADVERTISEMENT
The practice of bringing to the public's notice the good
qualities of something in order to induce the public to
buy or invest in it.
Advertising is an easy, effective and quicker idea to
attract consumers, introduce new schemes or
awareness, eliminate barriers to the sale and to establish
yourself as a brand.

8. Two Basic Advertising Principles
In Good Times and Bad
1. Create desire for your product,
– or find people who already have the desire
2. Find out what people don‟t like about
doing business with you, and eliminate
those reasons or barriers to the sale.

9. When times are good, you should advertise.
When times are bad, you must advertise.
Entrepreneur Magazine
January, 2009

10. What Do These Brands Have In Common?

11. They all expanded their sales, profits and
market share in a recession, and most went
on to dominate their category.
They maintained or increased their
advertising and promotions while
their competitors were cutting back!
They focused on opportunity, not fear.

12. We’ve had 22 recessions from 1902-
2009
Date Duration
Sept. 1902-Aug. 1904 23
Recessions occur
May 1907-June 1908
Jan. 1910-Jan. 1912
13
24
about every 5-6
Jan. 1913-Dec. 1914
Aug. 1918-March 1919
23
7
years, and last on
Jan. 1920-July 1921
May 1923-July 1924
18
14
average 8-16
Oct. 1926-Nov. 1927
Aug. 1929-March 1933
13
43
months.
May 1937-June 1938 13
Feb. 1945-Oct. 1945 8
Nov. 1948-Oct. 1949 11
July 1953-May 1954 10
Aug. 1957-April 1958 8
April 1960-Feb. 1961 10
Dec. 1969-Nov. 1970 11
Nov. 1973-March 1975 16
Jan. 1980-July 1980 6
July 1981-Nov. 1982 16
National Bureau of July 1990-March 1991 8
Economic Research March 2001-Nov. 2001 8

13. “The greatest enemies of
achievement are fear, doubt and
vacillation.”
– John Patterson, founder of NCR

14. Recessions are Always Followed by
Expansions and Prosperity
National Bureau of Economic Research

15. Advertising in a down economy clearly creates
a competitive advantage.
The vast majority of executives agree that when
they see a company advertising in a down
economy:
It makes them feel more positive about
the company‟s commitment to its products and
services.
More importantly, it also keeps those
companies top-of-mind when purchase
decisions are made

16. • The Research
Several researches are conducted to study the effect of
advertisement on recession.
The researches are conducted by:

17. Harvard Business Review
“Advertising as an Anti-Recession Tool”
Jan-Feb 1980
“Advertising should be regarded not as a
drain on profits but as a contributor to
profits…as a means of achieving objectives.
Ad budgets should be related to the
company‟s goals instead of last year‟s
sales.”

18. 1980 to 1985

19. 400 375
350
300 283
250
195
200
159
150 137
119
100 100 96 106
100 88 89
50
0
1980 1981 1882 1983 1984 1985
Eliminated or Decreased Advertising in both '81 & '82
Maintained or Increased Advertising in both '81 & '82
Sales Indices 1980-1985 (1980= baseline of 100). „81 and „82 were recession years

20. April
19, 2009
“Firms that are able to increase advertising
during recessions are likely to have stronger
future earnings.
The researchers studied data from five
recessionary periods since 1971, sampling data
from more than 3,000 firms listed on the public
stock exchange.

21. The available
research indicates
that:
It’s the decisions
made and actions
taken during a
recession that make
the biggest
difference in the
future growth or
decline of a
“Riding it out” may equate to driving it down.
company.

22. 25% of companies see an opportunity to
expand market share in a recession . 70% of
these companies will maintain their growth
for 5 years after the recession. The majority
25% in this category reach a new and sustained
high.
75% 75% of companies will cut
staff, advertising, customer service, R&D, product
launches, and acquisitions. Following the recession
less than 30% of those will ever regain the market
share and profitability lost during the recession.
The majority in this category reach a new and
sustained low.

23. During the 1920s, Fords were outselling
Chevrolets by 10 to 1. In spite of the
Depression, Chevrolet continued to
expand its advertising budget, and by
1931 Chevrolet took the lead.
1927
Models
1933 Ad

24. 2001 computer market down 12%, Dell
up 11%
120
100
80
60 Industry
Dell
40
20
0
2000 2001

25. THANK YOU