Burger King Increases Recession Advertising

In the article Burger King to Boost Ad Spending, which appears in the April 17, 2009 online publication of AdAge.com, author Emily Bronson York quotes Burger King’s chief marketing officer, Russ Klein, explaining the philosophy behind his company’s strategy of substantially increasing advertising spending during the present economic downturn.

Mr. Klein obviously sees great opportunity in recession stating:

“…there is strong historical evidence around companies that step up with their innovation and advertising and their ability to move through economic downturns and they emerge with stronger brands on the other end.”

Depression Advertising Companies Do Extremely Better

New Yorker Magazine’s James Surowiecki’s article dated, April 20, 2009, for the financial page. He suggests in his article that several studies prove that businesses that continually invest in marketing and research and development while amidst recession do enormously better than companies that decrease spending in those areas.

Economist Roland Vaile on Depression Advertising

Research by economist Roland Vaile, in 1927, discovered “firms that kept ad spending stable or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn’t.” Also:

“A study of advertising during the 1981-82 recession found that sales at firms that increased advertising or held steady grew precipitously during the next three years, compared with only slight increases at firms that slashed their budgets. And a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D. and ad budgets, while companies at the bottom of the pile had reduced them.”

Strategic Planning Institute concluded through their own research that businesses whom cut investment during recessions grew at a smaller pace in the years after the hard economic climates ended.

Businesses Collapse Without Economic Recession Advertising

While businesses were collapsing during the great depression, Miracle Whip was brought to market in 1933 to become the leading dressing in a mere six mo. iPod was brought to market in 2001 during the recession, and TI released the transistor radio right in the midst of financial hard times of 1954.

Surowiecki explains that during the great depression another huge success story accomplished by Kellog’s:

“While Post Cereals…cut back on advertising (during this period,) Kellogg doubled its ad budget and by 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty percent and it…became…and remains the industry’s dominant player.”

The preponderance of historical evidence is strongly conclusive. Companies can significantly benefit by employing bold strategies during recession.

Success, in this debt based economy, during the hardest times is achieved only by those courageously taking advantage of options in front of them.

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