Falling Leaves: the Ardes blog

Surviving the Recession

Ray Drainville

Last week, there was an interesting article in the New Yorker that was definitely a worthwhile read in troubling times. To summarise it, the more you keep up your investment in advertising and research & development, the more likely you will reap massive rewards. Study after study cited in the article mentions how companies that increased their investment during recessions saw precipitous growth, while competitors who scaled back their costs would remain at the bottom of the pile.

A prime example is Kellogg & its main competitor, Post. During the Great Depression, Post scaled back its investment, whilst Kellogg doubled its advertising. Kellogg has dominated the breakfast cereal market to this day. Whilst one might read this example as an outlier—and the length of Kellogg’s dominance supports this—there’s a lot of evidence to support the general claim. Companies who increased investment during the 1981–82 recession grew shockingly fast during the next several years; companies that reduced spending grew sluggishly in the same period. And during the 1990–91 recession, twice as many companies leapt from the bottom of their industries to the top as did during calmer economic times; and those at the bottom of their industries had reduced spending.

Increasing your investment doesn’t come without risks, however: you can gamble & lose—big. It’s not completely irrational to scale back your costs in a thoroughly uncertain atmosphere. But if you do dare to increase your investment, you may well transform your company.

So, uhm, why not give us a call & we’ll see what we can do for your website? :)