The Global Adspend

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:

revenue2

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4 responses to “The Global Adspend

  1. Sorry that chart is so small, I couldn’t get it bigger – but go onto Innosight to see the full-size, if you so desire.

  2. As someone who creates marketing and advertising collateral for a living, it’s worth noting that I’ve been very busy lately. My evidence is only anecdotal, but would venture to say that the companies that are spending money on advertising and innovation right now are SMARTER companies, and this global economic correction could separate the wheat from the chaff, as they say.

    Also, your example of the iPod is a good one. Another good example could be Toyota compared to GM.

    • Thanks for the comment, Arlo, and good example with Toyota. As a person who works on the advertiser side, it’s nice to hear from the agency/creative side. Glad to hear you guys are busy! XOXOO

  3. Pingback: Innovation’s Not For Everyone « MADlibrarian

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