Is It Profitable to Make Advertising Cutouts During the Pandemic Period?

In times of economic recession, uncertainty, orthreats that have never been experienced before, companies are willing to withdraw their advertising investments.

If the company stops advertising and sales continue at the same rate, it will see profitability in its monthly financial statements and the situation   creates the impression that it is on the right track because its performance is strong. But how long will this positive atmosphere last? We think this is the question to be asked.

What Happens When Ads Stop?

Many companies, when they stop advertising, reduce one of the unnecessary (!) expense items that they allocate budget and examine their sales rates. If there is no decrease in sales rates, it continues on its way with peace of mind. But when ads stop, sales are not the only thing to look at.

Brand image and brand value are also one of the main criteria to be looked after the ads stop. Because these criteria have the power to affect sales in the long term.

When the companies that stop advertising are examined, it is seen that the brand name is losing its power to a great extent, the consumers lose the impression of quality and the brand cannot be as effective in the consumer mind as before. The market share of the brand also decreases over time, the balance of perception deteriorates, and ultimately, not only sales decrease, the brand is completely damaged.

The results get worse when the company’s advertising stops and its competitors continuetheir communication efforts, while the consumer reinforces their perception of the alternativeproduct, the brand loses its prestige.

Even if advertising is restarted most of the time, it is very difficult to catch the old sales rates and brand perception and it requires more budget.

So it might be wise to stop advertising for a while, but in the long run it can be like standing on a time bomb and cost your brand dearly.

Dwt Mandalina / Ayşegül Baysal / Strategist

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