The Role of Advertising during Recession

Abstract

Advertising plays a key role in a dynamic economy. It provides valuable information about products and services in an efficient manner; communicates customer value, builds brand awareness and creates demand. In a recession, the first things that a company usually cuts come from the advertising budget. When companies begin to cut back on advertising during an economic downturn, they become less visible to the public. While it make sense to cut off from communication budget, the evidence shows that the companies which advertise during an economic downturn, have expanded their market share and have maintained their solid image. Therefore according to marketers, neglecting marketing efforts during an economic downturn will result in weakening the brand and making it less profitable in the long run. The present study aims to provide an understanding of the marketing communications’ specifically advertising’s impact on companies’ performance during and after recession. It lays out the theoretical foundations to evaluate the impact of advertising during the recessions and provides some evidence from the world. It is believed to be paramount to examine the existing literature and researches to create awareness in the field, about the importance and impact of advertising during economic downturns.