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Do You Really Want to Cut Your Advertising Budget?

Corporations – both for profit and nonprofit – are looking for budget line items they can reduce during the economic crisis. Often, one of the discretionary items they consider is advertising. According to an article that appeared in the November issue of Knowledge@Wharton (University of Pennsylvania), “Research shows that companies that consistently advertise even during recessions perform better in the long run. A McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise.” So before you cut advertising, perhaps a better strategy is to make sure that the dollars you are now spending are deployed where they will do the most good.

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