Advertising During a Recession

James Surowiecki, author of one of my favorite books of 2004 (The Wisdom of Crowds), and The Financial Page writer for The New Yorker, recently provided some perspective on the pros and cons of cutting ad spending during a recession.  It’s worth a view here. Key quote:

The academics Peter Dickson and Joseph Giglierano have argued that companies have to worry about two kinds of failure: “sinking the boat” (wrecking the company by making a bad bet) or “missing the boat” (letting a great opportunity pass). Today, most companies are far more worried about sinking the boat than about missing it. That’s why the opportunity to do what Kellogg did exists. That’s also why it’s so nerve-racking to try it.

Earlier this year, The Economist also put out an overall excellent presentation with great statistics about what happens to companies/brands when they cut advertising budgets.  You can find the presentation via SlideShare here.  One major caveat: slides 40 – 46 – a silly and self-serving section about what branding is vs. what it is not.  If you take this section with a grain of salt, the takeaways from the presentation are worthwhile when taking the long-term view of effective ad spending in a downturn.