Whenever there is a recession, the marketing trade publications run articles extolling to their readers the importance of continuing to advertise in a recession.

Since these articles are usually contributed by ad agency owners, magazine publishers, and marketing consultants, one could make an argument that they are self-serving.

As Warren Buffett says, “Don’t ask the barber if you need a haircut.”

Marketing professionals make money only when companies buy their marketing and advertising services.

But do they REALLY believe that spending money on marketing in a recession is smart business?

Or are the consultants and ad agencies pushing clients to keep spending so the advertising professionals won’t starve?

During a recession, when money is tight, should companies ramp up their marketing activities and spending…keep them steady…cut back…or stop altogether?

McGraw-Hill Research’s Laboratory of Advertising Performance studied recessions in the United States.

Of course, we must keep in mind that McGraw-Hill, as a large publisher of trade journals, depends on ad revenues to maintain profitability.

That being said, following the 1981-1982 recession, they analyzed the performance of some 600 industrial companies during the downturn.

Their research found that “business-to-business firms that maintained or increased their marketing expenditures during the 1981-1982 recession averaged significantly higher sales growth both during the recession and for the following 3 years than those which eliminated or decreased marketing.”

In a different study, Management Review asked American Management Association (AMA) member firms about spending during the 1990-1991 recession.

The data showed most firms that raised their marketing budgets enjoyed gains in market share: firms that increased
their ad budgets were twice as likely to pick up market share.

One of my readers, MT, owns a software company. In response to the recession, MT has cut his budget for Google AdWords campaigns in half.

How did he determine what to trim?

Before the recession hit, MT ran 10 Google PPC ad campaigns—all profitable.

“When the economy turned south, 6 of those PPC campaigns, those targeted mainly at fence-sitters who don’t buy any longer, began to lose money,” says MT.

So, very wisely, MT cut those 6 unprofitable PPC ad campaigns—and kept running the 4 that were money-makers.

But are all consumers not buying any more…or is it just MT’s customers?

According to an article in Internet Retailer, nearly 4 out of 5 households earning $100,000 a year or more said they are cutting back their spending.

When consumers cut back spending, your business can take a real hit—especially if you sell a product that’s “nice to have” vs. one that customers absolutely must have.

So what can you do to maintain healthy sales during what has already been a prolonged recession and is likely to continue for some time?

The first thing big corporations cut in tough times is marketing. That’s really stupid (and yes, I know that as a
copywriter, I sound self-serving saying this).

Marketing, when done right, makes money, brings in customers, and generates sales.

During a recession, your biggest problem is making sales and maintaining revenues—exactly what marketing is designed to accomplish.

So stopping all marketing really makes no sense.

What does make sense is MT’s approach:

1 – Precisely measure the ROI from all marketing campaigns.

2 – Cut the ones that lose money.

3 – Keep the ones that make money.

John Wanamaker, a famous retailer in his day, once said, “Half my advertising is wasted, but I don’t know which half.”

But today, with direct response measurement and Web analytics, we do know which half is wasted.

So we can fix or eliminate the wasted half, and generate a positive ROI by running the ads that do work.

I took a survey on my website on how the recession has affected my visitors.

38% of those surveyed said their sales are flat, while 25% reported increased sales and 37% have seen sales fall.

Eight out of ten people who answered the online survey expressed some degree of worry about the effect the recession will have on their business and their sales.

In response, 32% have increased their marketing budgets and 24% are spending less money on marketing.

Yet these businesses are holding firm on their pricing—more than 8 out of 10 say they have not lowered their prices to stimulate sales in a recession.

When it comes to economic recovery, they are slightly pessimistic.

Just over 57% believe the recession will end this year.

Almost 43% say the country won’t recover from the recession until 2012 or later.

Bob Bly is the author of “World’s Best Copywriting Secrets” and has written copy for more than 100 companies including IBM, Boardroom, Medical Economics and AT&T. He is the author of more than 75 books and a columnist for Target Marketing, Early To Rise and The Writer. McGraw-Hill calls him “America’s top copywriter”.