Deciding to make major cuts or to eliminate brand advertising can be one of marketers’ most painful choices. This ARF paper summarizes the findings from a number of studies that quantify the impact and implications of drastic budget reductions, offers a case study, and provides insights, so that marketers can be better informed as they have to consider tough calls.
The paper concludes by noting that “the longer-terms risks will likely outweigh the short-term bottom line benefits” and shares these insights:
- Businesses that keep up spending may enjoy “a lasting advantage over their competitors who decrease their ad spending during the same period,” driven in part by less ad clutter and possibly lower media costs.
- Regaining market share and brand equity following “going dark” can be difficult and costly.
- If promotions are used to bolster short-term sales as advertising is reduced, negative effects may result, e.g., consumers may start to expect deals and adjust their buying habits accordingly.
- Marketers need to consider advertising as an “investment,” not a “cost,” as illustrated in a State of Colorado Tourism Board case study.