During a recession, you expect almost every business to experience downtime and less profit. Small businesses have to figure out places where they can cut costs in order to survive, and advertising often is a target. The advertising industry seems to be hit especially hard during a recession, and sometimes the reasons aren't always the wisest.

Slashing the Budget

During a recession, small businesses tend to experience fewer sales and less profit because people are cutting back on their spending. As clients cut their own budgets, the companies they purchase from find that they have to trim their budgets just to survive. Some small businesses view marketing and advertising as an unnecessary extra cost. As a result, the advertising budget will be one of the first things they trim when they have to cut down on their spending.

Free Marketing

When budgets are tight, small businesses need to be wiser about how they spend their marketing money, since there's less to go around. Traditional methods such asadvertising on television or buying print ads in magazines also tend to cost the most. Small businesses simply don't have that type of money to spend during a recession, so they may start looking for areas where they can advertise for free instead. For example, businesses might start focusing on creating free Facebook pages and Twitter accounts as advertising methods. Or they may focus on publishing press releases, which are free to write and send out.

No Luxury Ads

Another reason that the advertising budget experiences a slump during a recession is because when times are good, some businesses go overboard and take advantage of every luxury advertising opportunity available to them.They may buy the most expensive prime-time slots for placing commercial advertisements and buy premium back cover, full-color placements for magazine ads. When these businesses experience a recession, they have to scale back from luxury advertising to more common-sense advertising, resulting in a slump in the advertising market even if they aren't cutting the budget completely. A business might choose to run a smaller print ad in a newspaper or a smaller color ad inside a magazine rather than on the back cover in order to save on costs.

Cutting Endorsements

Both large and small businesses might try to get new consumers by paying for celebrities or athletes to endorse their brands, whether they're nationally known names or local heroes. This can be a very expensive method of acquiring customers, but also a popular method when economic times are good. However, during a recession, businesses from large ones such as Nike to small local businesses tend to cut endorsement advertising first. One reason is because during a recession, businesses start focusing on keeping their customers rather than trying to get new ones. Getting a new customer costs about five times as much as keeping the ones you already have. When money's tight and every penny counts, endorsements used to bring in new clients tend to fall to the wayside.

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