IPA warns against cutting ad budgets

20 March 2008

Firms should maintain their marketing and advertising spend during an economic downturn, the UK's advertising trade body has said.

And, if rivals are cutting budgets, the long-term benefit of maintaining spending will be even greater, it added.

In its report "Advertising in a Downturn", the Institute of Practitioners in Advertising (IPA) concluded that cutting down on advertising spend would only help to "defend profits in the very short term".

It also found brands that reduced their marketing budget would emerge from the downturn "weaker and much less profitable".

The report summarises the findings put forward by marketing consultancies on the most profitable marketing response to a downturn, gathered at a seminar held at the beginning of March.

"Nobody wants to talk us into a recession but there is currently ambivalence about which way the market is heading," said IPA director-general Hamish Pringle.

"It's all too easy to make a snap judgment about a discretionary budget like advertising but the reality is that short-term gain leads to long-term damage to the brand, and the cost of recovery is three to four times greater than the saving made," he added.

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