Effects of recessions on advertising expenditures: An exploratory study ofeconomic downturns in nine developed nations

This article explores the effects of recessions in developed nations since 1989 to determine how advertising expenditures are related to recessions an d whether expenditures for different media are affected differently. The st udy finds that advertising expenditures (in constant currency) declined an average of 5% when a 1% decline occurred. The relations between the gross d omestic product and advertising expenditures were not universal across the nations, however. It appears that nature of the economies, the degree of ec onomic fluctuation, segments of industry affected, national economic polici es, and other factors may play roles in the advertising expenditure choices . The study also finds that print media are more affected by recessions tha n broadcast media. The effect of the economic downturns on newspaper and ma gazine advertising expenditures were 4 times that of the effect on televisi on advertising expenditures.