Fortune 500 Companies are Investing in Advertising and Marketing During a Downturn
The global advertising industry experienced an 8% downturn due to the pandemic in 2020, however, the top 5 global advertising agencies—WPP, Publicis, Omnicom, Interpublic, and Dentsu—saw an impressive 9% organic growth in 2022 on top of +13% organic growth in 2021.* This data shows that even during a difficult time for many industries, large companies (typically the clients of the Top 5 firms) are continuing to invest in advertising and marketing.
The Benefits of Investing in Advertising and Marketing During a Downturn
A key benefit of investing in advertising and marketing during a downturn is that it provides the opportunity to take market share while CPMs (cost per thousand impressions) are low. Furthermore, this investment allows these companies to maintain their relevance with their audience. It also allows them to remain competitive against other brands that may be cutting back on their spending.
Investing in advertising during an economic downturn allows for larger companies to take market share while the smaller guys are subjected to reduced spending or “efficient growth”. This makes it easier for big companies to consolidate and accelerate when the good times return.
Investing in marketing during an economic downturn has numerous benefits for companies who want to grab market share and maintain relevance with their target audience while taking advantage of lower CPMs for buying media. These investments allow these companies to focus on long-term growth rather than short-term efficiencies. Unfortunately, the big spenders will most likely come out on top while others will exhaust their reliance on older cohorts of customers and newer cohorts become too small to make up for larger cohort attrition over time.
What are you scared of? I may be one of the few, but I believe in taking market share now while CPMs are low vs. suffering later by rebuilding your cohorts when CPMs are higher. Is the latter efficient growth?
*Source: Madison & Wall
