Survey warns against adspend cuts

Britain’s ad industry has been given a shot in the arm by new research showing that companies which maintain or increase their adspends during recession get off to a flying start when recovery starts.

Britain’s ad industry has been given a shot in the arm by new

research showing that companies which maintain or increase their

adspends during recession get off to a flying start when recovery

starts.



Clients who resist the temptation to make advertising the first target

of boardroom cutbacks will grow almost three times as fast as rivals

that slash promotional budgets, the survey claims.



Industry lobbyists plan to use the results to hammer home the message to

chief executives and finance directors that advertising is an

indispensable business investment in bad times as well as good.



Andrew Brown, the Advertising Association’s director general, said: ’The

onus is on us to take this message, supported by further research, to

those at the highest level of advertiser companies.’



The survey, by the research company, Profit Impact of Marketing

Strategy, covered 183 UK companies that had experienced similar

recessionary market conditions.



It revealed that companies which boosted their adspends found their

profitability averaged 14 per cent, significantly more than companies

which either cut or maintained spends. Once recovery started, profits

grew more quickly.



Speaking at an AA conference last week, Marilyn Baxter, the

vice-chairman of Saatchi & Saatchi , said: ’This new data gives

ammunition to marketing directors to help them resist the cost-cutting

instincts of their finance colleagues and should also give finance

directors pause for thought.’



Baxter, who also chairs the value of advertising committee at the

Institute of Practitioners in Advertising, cited the ’Nicole and Papa’

campaign for the Renault Clio and the ’We share the same taste in

coffee’ advertising for Nescafe Gold Blend as examples of clients who

had succeeded by increasing their adspends during recession.



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