The combination of a weak economy and the aftereffects of Sept. 11 has adversely affected the advertising industry, as companies cut back on spending and respond to cautious consumers.
“The harder the times, the harder the sell,” College of Communication professor Tobe Berkovitz said.
According to Berkovitz, advertising is less creative during times of recession.
“It becomes more of a blunt instrument for companies to achieve their objectives,” he said.
On the other hand, because advertisers are limiting their budgets, media time and space becomes much less expensive – a benefit for clients who can then get more for their money.
This is an indication of how the recession has hurt the media. Berkovitz said that every medium – television, newspapers and magazines leading the group – has been “crushed” by the slowdown of advertising revenue.
“Clients panicked and stopped spending money,” he said. However, Berkovitz thinks that strategy is a poor one.
“What smart companies know,” Berkovitz said, “is if you spend during a recession, when you come out of the recession you’re more strongly positioned than before.”
Companies tend to reduce advertising spending before other costs; however, Berkovitz recommends that while it seems counterintuitive, companies should continue to spend on advertising during hard times.
“They’ve gotta say, ‘This is gonna hurt but we’ve gotta keep spending,'” he said. “Smart companies will take advantage of that opportunity.”
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