Economic uncertainty and recessions are difficult for everyone, but advertising companies are especially impacted. The natural tendency is for clients to pull back, but evidence suggests spending money on marketing during a financial downturn is beneficial in the long run.

Millward Brown, a global research agency specializing in advertising and marketing communications, published a report in 2008 that outlines the benefits of continuing to advertise during recessions. “A great deal of evidence suggests that it’s not a good idea to reduce marketing spend during recession in order to hit financial targets,’’ the report says. “Doing so may leave your brand in a less competitive position when the economy recovers. Over the years, research studies have confirmed that the best strategy in terms of long-term ROI is to increase marketing expenditure during an economic slowdown.”

Although that report was published 17 years ago, marketing strategists still maintain that ad spending should remain consistent in uncertain economic times. Moreover, the consequences of advertising retrenchment can be consequential and long-lasting.

The Advertising Research Foundation said in a report that “Marketing can be significantly more important to the firm during a recession than at any other time. Investment in marketing during recessionary periods is strongly associated with positive shareholder value, customer loyalty, and superior long-term profitability. Reducing marketing efforts can exacerbate the already negative impact of the recession and is likely to jeopardize future sales and profits.”

While the inclination of businesses might be to pull back spending, studies have shown the importance of maintaining advertising budgets. The ARF report says:

• Businesses that maintain or increase their ad spending may gain a lasting advantage over their competitors who decrease their ad expenditures during the same period. Reduced advertising by competitors provides a media environment with less ad clutter and potential lower media costs.

• It is more challenging and costly to regain market share and brand equity once lost by “going dark” than it is to maintain them with even modest investment.

• Emphasizing short-term sales, often through promotions, in order to satisfy profit targets can have negative brand equity repercussions. And promotion effectiveness wanes over time as consumers get trained to “wait for the deal.”

• It is vital that marketers regard advertising as an “investment” rather than as a “cost.”

While the importance of maintaining spending is documented, there are some ways agencies can make sure they are getting the best bang for their buck in advertising strategies. They include:

Prioritizing performance and measurable results to prove efficiency and impact.
Social and traditional media will likely see the most substantial cuts, as channels with measurable attribution take their place.
As competitors retreat to familiar channels, marketers can gain a competitive advantage by branching out into new channels.

The impact of tariffs will be debated and monitored extensively over the next few months. But for businesses, the most important message is to ride the roller-coaster, continue to advertise, and keep your messaging consistent. There is no end in sight to economic uncertainty, but there is one clear certainty: a dramatic reduction in advertising spending can be disastrous.