Effects of Recessions on Advertising Expenditures: An Exploratory Study of Economic Downturns in Nine Developed Nations

Robert Picard

Journal of Media Economics, 2001, vol. 14, issue 1, 1-14

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

Date: 2001
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DOI: 10.1207/S15327736ME1401_01

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