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Advertising markets are more volatile and more reactive than most and they always amplify economic recessions for fundamental factors.First, marketing spending is the easiest cost to cut in the short term when managers are anxious to limit operational losses.But the maths are obvious: if your revenues fall by 10 per cent and all other costs (rentals, payroll, etc) are fixed in the short term, one of the few disposable expenditures is advertising, and, since it is relatively small at the scale of the company, the cut has to be much higher than 10 per cent to make any significant impact on the bottom line.It is easy to be cynical and say that if marketers did really believe in the power of advertising they would actually increase spending in tough times.However, big brands actually fight for market shares and marketing managers are being rational in cutting adspend when they anticipate that their competitors will also cut their marketing spending.The second reason is that advertising spending is concentrated around a limited number of big consumer brands in a handful of B-to-C sectors, and these are disproportionately affected by the recession.

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