Over 48% of U.S. adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates the business must be struggling according to research from Ad-ology.
That’s not a good sign for those businesses who have opted to reduce their advertising budgets as a means to save money. The study finds advertising appears to play a key role in consumers’ view of how a business is doing, and by not advertising, businesses may be sending a warning signal to current and potential customers.
“It is critical to advertise in the current economic climate, to maintain long-term positive consumer perception of your brand,” said C. Lee Smith, president and CEO of Ad-ology Research.
“Advertising not only assures consumers of a business’ reliability in a soft economy, but it can influence where and what they buy, especially when the ads address concerns about value,” Smith said.
Other interesting facts from the study include:
– 40% of consumers use coupons more now than a year ago
– Most consumers are as willing or more willing to pay more for ‘healthy’ or ‘organic’ products than they were a year ago
– A ‘deeply discounted price’ was the number-one factor that would make consumers more likely to purchase a big-ticket item (+$1,000)
– TV, newspaper, direct mail, and Internet top local media from which consumers saw/heard an ad within the last 30 days that led them to take action
– Store Web sites ranked second only to search engines as the way consumers research products and shop online
Have you reduced the amount of money you are spending on advertising? If so, have you noticed a dramatic effect on your business? Tell us about it.