By BRADLEY JOHNSON
REAL GDP (% CHANGE)
WHEN FINANCIAL MARKETS went into a freefall in
September, economists, media and politicians began drawing 5
uneasy comparisons to the Great Depression of the 1930s
In the weeks leading up to the election, presidential -5
candidates Barack Obama and John McCain described this
period in identical, chilling words: “the worst financial cri- -10
sis since the Great Depression.” -15
The National Bureau of Economic Research, official 1930 1935 19401970 1975 1980 1985 1990 1995 2000 2005
arbiter of business cycles, ruled Dec. 1, 2008, that the econ- Source: Bureau of Economic Analysis; IHS Global Insight (‘08 and ‘09 forecast)
omy formally entered recession in December 2007—one
year ago. This is a crash that hasn’t landed; IHS Global UNEMPLOYMENT RATE
Insight forecasts fourth-quarter ’08 annualized real GDP 25% 1933: 24.9%, Depression peak
of -5.0%, the worst since 1982.
Economists expect weak GDP growth to resume in
mid-2009, with the recession officially ending sometime 15
in the second half of 2009. That would make this the
longest recession since the Depression. 10
Advertising Age knows something about troubled
times: The magazine was founded less than 90 days after 5
the crash of ‘29 and has reported on every downturn since
the Depression. I myself have observed and reported on
downturns dating to the early ‘80s.
So just what happened to marketers and media in those
downturns? To find out, I made a deep dive into Ad Age’s
archives, analyzing original bound issues from our library.
I supplemented that with additional research and government data. I have focused on three periods: 1929-33; 1973-
The Depression generally means the prolonged downturn of the 1930s; some experts extend the definition to
1940 and 1941. I concentrated on the official business cycle
contraction from the August 1929 peak to March 1933
trough. These were the bleakest days of the Depression.
(The economy resumed growth in 1933; it entered a yearlong contraction in May 1937, the second of the
Depression’s two recessions.)
I chose the other two periods because they are the
deepest, longest downturns since the Depression.
The recession of November 1973 through March 1975
was defined by the energy crisis. This was a dark, cold period—literally: President Nixon in 1973 asked the nation to
turn down the thermostat and turn off outdoor Christmas
lights to save energy. This also was a period of stagflation—stagnating economy, double-digit inflation, crip-
The back-to-back recessions of January 1980-July 1980
and July 1981-November 1982 marked the worst economic period since the Depression. Oil prices, interest rates,
inflation and unemployment surged. Consumer confidence slumped to its lowest level on record. Ronald
Reagan, a week before the 1980 election, closed his one
and only debate with President Jimmy Carter by asking:
“Are you better off than you were four years ago?”
Reagan, of course, won, presiding as the nation sank into
recession and then staged a remarkable recovery.
What happened to marketers, media and agencies during these downturns? There were layoffs, closings, cutbacks; no surprise there.
But I was more surprised and intrigued by another
point: the innovation that has occurred during the tough-est times. Radio and refrigerators came of age in the 1930s.
Time Inc. launched most of its biggest magazines during
recessions, including People in 1974. The nation’s largest-