Credit Crunch - How should businesses react?

It may be tempting to cut back on advertising at a time when the press is making a big issue about credit crunch and recession. But I'd like to draw your attention to the findings of the Press Association, who have conducted significant surveys which concluded that those businesses who advertise during adverse times benefit far more in the long term than those who do not.

In other words, the company that chooses to reduce their advertising during a period of economic downturn (okay, we can call it recession) will see a drop in it's market share whilst those businesses who press on with advertising will gain that market share once the recession passes.

So the key thing to underline here is that advertising during the recession period does not guarantee an uplift in sales during the recession, but it does clearly demonstrate gain in market share when the economy recovers and that means more business.

There are many issues that arise from this of course, the major one for smaller businesses is can they actually afford to advertise, especially when other bills are rising, such as rental costs and fuel and energy costs. Fair enough! You can't expect to cover everything and you need your business to survive in the first place, but if you do have flexibility to continue or even increase advertising then now is a good time to do it.