More than 48% of US adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates the business is likely struggling, according to a study from Ad-ology Research. At the same time, a majority of consumers think businesses that continue to advertise are competitive and/or committed to doing business. The study "Advertising's Impact in a Soft Economy," undertaken to determine whether stopping advertising during the recession could harm a business, takes an in-depth look at specific consumer perceptions regarding firms that continue to advertise in the current economy, as well as those that do not. Not Advertising Can Harm Brand Advertising appears to play a key role in consumers' view of how a business is doing, the study found. By not advertising, businesses may send a warning signal to current and potential customers, MarketingCharts reports. For example, when consumers no longer see/hear advertising from an auto dealership during a down economy, 50% say they view it as struggling:
On the other hand, when a dealership advertises during tough times, 34% believe the dealership to be committed to doing business. Perception is similar for stores and banks. When advertising ceases among the following businesses, consumers: - View their bank as struggling (48%)
- Believe their bank may not be in business much longer (12%)
- View their favorite store as struggling (56%)
- Believe their favorite store not be in business much longer (15%)
However, when the following businesses continue to advertise frequently, consumers: - Believe their bank is committed to doing business (43%)
- View their bank as being competitive (30%)
- Believe their bank is doing well (10%)
- Believe their favorite store is committed to doing business (47%)
- View their favorite store as being competitive (30%)
- Believe their favorite store is doing well (7%)
"It is critical to advertise in the current economic climate, to maintain long-term positive consumer perception of your brand," said C. Lee Smith, president and CEO of Ad-ology Research. "Advertising not only assures consumers of a business' reliability in a soft economy, but it can influence where and what they buy, especially when the ads address concerns about value." | 
