TO OVERCOME SLUMP

Rotorua Morning Post, Issue 2, 25 August 1931, Page 6

TO OVERCOME SLUMP

TRADE FLUCTUATIONS MINIMISED. ___ Thirty companies which- increased their advert'sing expenditure during- a timie of slump suffered only a slight set-back in net profits even in thedepth of the slump, and quickly recovered, profits rising sharply to new high levels. Forty-six companies which deereased their advertising appropriations experienctd a catastrophic fall in profits to a point when heavy deficits were made. Even more important is the fact that when prosperity returned, these latter firms only just regained their pre-slump profit level, while those which have increased their advertising were making profits on a steadily rising scale, well above those of therlr more timid competitors. These startling and convincing facts are set forth categorically, prov13d with statistics and vouched for with the authority of the "Saturday Evening Post" of August 9, 1930. The page from which these facts are- taken is perhaps the finest antidote to the "slump complex' 'that has been administered to the business community: One hundred and eighty-four national advertisers spqnt £30,000 or more in the leading magazlines during the years 1920 or 1921. Of these, 50 advertisers, or 32.1 per oent., increased their advertising appropriations in 1921, when the first big post-war slump began to paralyse business. The remaining 125 followed the unfortunately orthodox coursis of reducing their appropriations. Thirty of the 59 firms who increased advertising and 46 who ddcreased advertising published profit and loss figures for 19191924, and only these firms could be included in the analysis. By averaging these profits, two curves were obtained for comparison of the two groups. These curves demonstrate beyond cavil the fact that advertising not only helps to keep business conditions stable, but maintains a steady rate of progress. "Advertiser's Weekly."