02735nas a2200157   4500008004100000245007000041210006900111260000900180300001000189490001100199520219100210653001502401100003202416700001802448856011102466       2003                        eng d00aShould Firms Increase Advertising Expenditures During Recessions?0 aShould Firms Increase Advertising Expenditures During Recessions  c2003  a65-850 v03-0003 aSome advertisers believe that boosting advertising during recessions provides an added benefit in increased sales and profitability. However, evidence for this argument has been weak, first, because it fails to address firm-based (earnings and market value) outcomes, and second, because it has been studied primarily in non-consumer goods industries.In this report, Frankenberger and Graham extend the investigation of recessionary advertising spending increases and decreases to include financial measures of performance, and compare performance across consumer products, industrial products, and services industries. They conduct an econometric analysis employing cross-sectional time series regression on a sample of 2,662 firms over 16,147 firm-years. They analyze the economy-wide and industry-specific effects that average advertising spending has on earnings and market value, and compare those effects with the effects of increased and decreased advertising spending during recessionary periods. 
Their results indicate that advertising creates a firm asset by contributing to financial performance for up to three years in the future. Further, increasing spending on advertising during a recession leads to benefits that exceed the benefits of increasing advertising during nonrecessionary times. However, the effect varies by industry: A performance boost is observed during the recession year and one year following for consumer and industrial products firms, but not for services firms. When firms decrease their advertising during recession, financial performance is eroded only for industrial products firms, and only during the year of the recession. 
Frankenberger and Graham conclude that firms should support advertising budgets whenever possible, as advertising in general translates to an asset that is valued by stock market participants. For firms experiencing soft economies in the consumer and industrial products industries, it makes sense to increase budgets during a recession to realize an incremental gain in financial performance. Firms that decide to cut advertising spending during a recession may do so with little cost beyond the recessionary year. 
10aAccounting1 aFrankenberger, Kristina, D.1 aGraham, Roger  uhttps://business.oregonstate.edu/biblio/should-firms-increase-advertising-expenditures-during-recessions-002737nas a2200157   4500008004100000245007000041210006900111260000900180300001000189490001100199520219300210653001502403100003202418700001802450856011102468       2003                        eng d00aShould Firms Increase Advertising Expenditures During Recessions?0 aShould Firms Increase Advertising Expenditures During Recessions  c2003  a65-850 v03-0003 aSome advertisers believe that boosting advertising during recessions provides an added benefit in increased sales and profitability. However, evidence for this argument has been weak, first, because it fails to address firm-based (earnings and market value) outcomes, and second, because it has been studied primarily in non-consumer goods industries.In this report, Frankenberger and Graham extend the investigation of recessionary advertising spending increases and decreases to include financial measures of performance, and compare performance across consumer products, industrial products, and services industries. They conduct an econometric analysis employing cross-sectional time series regression on a sample of 2,662 firms over 16,147 firm-years. They analyze the economy-wide and industry-specific effects that average advertising spending has on earnings and market value, and compare those effects with the effects of increased and decreased advertising spending during recessionary periods. 
Their results indicate that advertising creates a firm asset by contributing to financial performance for up to three years in the future. Further, increasing spending on advertising during a recession leads to benefits that exceed the benefits of increasing advertising during nonrecessionary times. However, the effect varies by industry: A performance boost is observed during the recession year and one year following for consumer and industrial products firms, but not for services firms. When firms decrease their advertising during recession, financial performance is eroded only for industrial products firms, and only during the year of the recession. 
Frankenberger and Graham conclude that firms should support advertising budgets whenever possible, as advertising in general translates to an asset that is valued by stock market participants. For firms experiencing soft economies in the consumer and industrial products industries, it makes sense to increase budgets during a recession to realize an incremental gain in financial performance. Firms that decide to cut advertising spending during a recession may do so with little cost beyond the recessionary year. 
10aAccounting1 aFrankenberger, Kristina, D.1 aGraham, Roger  uhttps://business.oregonstate.edu/biblio/should-firms-increase-advertising-expenditures-during-recessions-1