Six reasons to continue advertising during a market downturn

Friday 1 May 2020

What we know about the role of advertising in a market downturn

Thirteen years on from the Global Financial Crisis, the world has been hit with another. And while New Zealand and Australia comes to grips with the fallout of our own lockdown to combat Covid-19, advertising can seem like the last item to spend money on for businesses fearful of a recession.

During a downturn or period of uncertainty, prioritising hard costs and delaying spending are among the first understandable tactics businesses will take. But there can be several advantages to continue advertising during a recession, according to global research going back nearly a century.

Here are six reasons to continue advertising during a dip in the market:

1. History has shown advertising during a downturn works

According to a report quoted by Forbes magazine, during six significantly unstable global periods from the 1920s to the 1990s, companies that cut back on advertising during downturns lagged behind those that didn’t.

In a 1985 study of 600 businesses, sales grew 275% more for those who aggressively advertised. And in 2009, Amazon sales grew by 28% following the Global Financial Crisis - largely attributed to them continuing to push on with the release of their game-changing Kindle.

2. Your business could gain a competitive edge

Businesses have limited advertising budgets - and your competition may be more nervous than you about spending it. By advertising when others are holding back their dollars, you could gain a competitive edge.

Whether you are continuing to operate now, or gearing up for restrictions to be lifted, your services or products will still be needed - so the right time could be now to get your message out before others do.

3. It’s a way to prepare for the longer-term

Though you may be nervous to part with cash right now, a look into recession psychology by the Harvard Business Review in 2009 showed that consumers tend to take a long-term positive approach during a slump, knowing that they will spend again sometime in the future.

Though sales might not go through the roof just yet, advertising during a quiet time can allow a business to rethink its messaging - and cut through the usual clutter, building competitive brand awareness and trust. When customers do spend again, you’ll be more front of mind than your competitors, and have solidified your customer base.

4. Advertising during a slump shows brand stability

Rather than becoming invisible, advertising during a market downturn can portray business stability and instil confidence. An American Business Media report summarised a number of studies on advertising during market downturns, which found that it not only rewards aggressive advertisers by protecting and enhancing their market position but also illustrates corporate stability. Being visible during a downturn will show your business is strong enough to survive.

5. You could grow market share through earning valuable trust

Though New Zealand and Australia is in uncharted territory with our lockdown and essential business operating levels, all recessions have shared ingredients for marketing success, the Harvard Business review reports.

Clever advertising and ‘shiny’ products may be less likely to increase sales in a downturn as priorities shift for consumers. Having a disposable income, feeling optimistic about the future - and trusting in businesses is vital to people in a new ‘normal’, so choosing where to advertise your business is an important consideration.

According to a recent survey of 25,000 people in 30 countries by data insight company Kantar, national media is four times more likely to be trusted than social media, such as Facebook.

6. Consumers expect brands to ‘do their part’ during Covid-19 and beyond

During a market downturn, people need messages of positivity, and stability. A recent “Trust Barometer” released by communications giant Edelman showed consumers wanted brands to protect their employees, work with governments and use resources to help solve problems during the crisis.

Any brand or small business able to show they are continuing against all odds to deliver a service or product and keep people working will earn high regard - but they’ll be remembered even more for what they’re doing. If you have a good story, now’s the time to tell it.

There has never been a more important time to get your advertising message out to local forestry and wood products companies. Remember, in addition to this newsletter (, we have an extensive array of well established and widely read weekly and monthly newsletters for the industry including,, and that will help you in these uncertain times.

For further information on advertising opportunities, please contact Gordon Thomson on or Tel: (+64) 27 275 8022.


Share |

Copyright 2004-2021 © Innovatek Ltd. All rights reserved.