Should you reduce your ad spends in an economic slowdown?

Text book response is a big NO. The theory goes onto say that it would be foolish to cut down on spends. Brand building should continue irrespective. In fact, the latest issue of one of the brand magazines carries a quote from Sam Balsara - "Advertisers know that the last thing they shold do in a slowdown is to cut advertising costs because the damage can get irreparable. And they also know that even after spending huge sums to recover, it is difficult to regain lost ground." If you are a marketer you are most probably saying "give me a break... after all what else can we expect you to say".


Somehow i have never agreed with this whole theory. The statement looks like a general boilerplate developed by a PR agency for the benefit of all communication pundits. It would be too much to expect the ad pros to be honest and advocate rationalisation. Having been a communications industry insider for more than a decade the proof of the pudding is how do the agencies react in a slowdown. Do they really invest in their people, training, growth, learnings etc. etc. in a slowdown. NOT BY A VERY LONG SHOT.

So if that is how the industry reacts internally in a slowdown, how can the recommendation be any different to their clients in a slowdown. Sam Balsara in the same interview where he gave the above quote goes on to add... "I am conservative in nature but that would not stop me from making the right investments, if they fit in with our strategic plan, and the amount to be investmed is reasonable."

Understandably, nobody wants to shoot oneself in the feet by encouraging clients to cut down. But definitely there is merit in advocating rationalisation or innovative ways of enhancing the value of advertising dollars.

P.S. Again, please don't consider the above as a generalisation. Ad spend decisons should be evaluated on a case to case basis. For instance, i would definitely recommend brands at a start-up phase to sustain if not press the accelerator on brand-building spends, especially during an economic slow-down. Advantages are many. History is replete with examples of unheard of brands emerging as leaders, following a slowdown.

Would be interested to know what Brand and communication professionals think.