Research Outline

Recession Impact on Radio Advertising

Goals

To understand which businesses typically perform best during a recession, including specific data concerning the Great Recession and which businesses are predicted to do well during the upcoming recession. As well, to understand which types of businesses are most likely to pay for radio advertising during a recession.

Early Findings

HIGH-PERFORMING INDUSTRIES

  • Smaller "sin industries" such as alcohol and candy generally perform well during a recession because, while people can't afford greater comforts, such as a pricey vacation or new clothes, they can still afford cheaper items like a bottle of wine or a pack of cigarettes.
  • During the Great Recession in 2008, companies such as Wal-Mart, McDonalds, Dollar Tree, and Auto Zone all performed well, likely because they offered cheaper versions of services that people could no longer afford. In fact, not only did these companies perform well, their stocks significantly increased during the Great Recession.
  • In addition to its growth during the 2008 Great Recession, McDonalds also experience significant gains during the 1970's downturn, suggesting that fast food especially tends to profit during recessions.
  • Companies providing utilities - such as electricity and water - tend to remain stable during a recession because the services are still needed even when people are tight on money.
  • Alternatively, the service industry tends to suffer during recessions, as people are more willing to take on extra work themselves to save the money they'd have previously spent on those services. That said, "companies that specialize in repairing, upgrading and maintaining existing equipment and products thrive as more clients focus on working with what they have rather than buying something new".
  • Other companies that have performed well during recessions in the past include Amazon, Ford, Domino's, Snuggie, Intel, and Lego.
  • Generally, the types of industries that perform best and/or most stably during a recession include critical repair and maintenance services, utilities, mandated services, and staple items.
  • Additionally, industries such as food and beverage, retail consignment, IT, repairs, health and senior services, and cleaning services all generally maintain steady earnings during a recession.

RADIO ADVERTISING

  • The industries spending the most money on radio advertising include retail, communications, services and amusements, government and politics, insurance and real estate, finance, media and advertising, restaurants, automotive, and business and technology.
  • While several of these may not perform well during a recession, some restaurants, services, and retail services have performed well during previous recessions.
  • In the Great Recession during 2008, spending on radio advertising dropped by 27 percent. However, in the past, several brands and companies have benefited from maintaining their advertising spending budgets during recessions: dry cereal, imported automobiles, quick-service restaurants, and technology.

PROPRIETARY RESEARCH

  • In addition to this public search, we scanned our proprietary research database of over one million sources and were unable to find any specific research reports that address your goals.