Is down! Down, really down. Down all over the world. eMarketer says we should all care about this because ad spending is a barometer of consumer confidence. But there are other reasons we should care, as this article in The New Yorker shows.
It says that when advertisers hunker down and try to save money by cutting back on marketing and advertising, they grow less-quickly in the years following a recession than companies that spend more freely. Obviously, this isn’t good for the economy in the long run.
It also explains how cereal brand Post lost its market share during the Depression to Kellogg’s because Kellogg’s spent more on advertising, while Post hunkered down. The edge that Kellogg’s gained during this time remains today.
Investing in R&D during tough economic times is also very smart – again and again, we see instances of innovation that really worked during recessions. If you have any doubts about this, remember that the iPod launched in 2001.
Innovation is important at all times, but especially during the hard ones. This chart from the business web site Innosight shows revenue growth for “disruptive” companies over time – and proves that companies that take chances on technology and innovation have grown in good times and in bad: