While things might be feeling bleak today. Here’s a crazy insight: companies “overcorrect” on marketing during recessions. However, recessions don’t actually last that long. Companies that realize this and ramp their spending back up, or increase it, during recessionary times vault ahead to become category leaders.
In 2009, the global economic pullback was just -0.7%.
But Advertising Spend dropped a whopping 10.1%.
The thing is, recessions generally don't last long (see the thin gray lines below).
It debunks how some leading businesses accelerated during the recession. The most "Efficient Growth" companies maintained or increased their marketing spending during the recession. Then broke away as winners.
The reasons acquisition costs have been so high for the past few years is that Meta to Google are marketplaces. There’s just more demand for the limited ad space. In recessions that demand drops, but the supply stays the same, so ad costs go way down.
What’s more interesting is potential customers quickly forget about competitors who aren’t in front of them. If you press your advantage and get in front of them with cheaper advertising you can vault yourself to be category leader.
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