The answer, according to research by McKinsey showed that:
The companies who increased their spend in a recession were the only ones whose profits rose substantially when the economy recovered.
McGraw-Hill found (when analysing the aftermath of the early ‘80s) found:
The sales of companies who had kept advertising during the 81-82 recession had risen 256% over those who had not.
As Ciaran points out, this makes a compelling case for investing in PPC just now. I also think there is a strong argument for working hard at your natural SEO at times like these as well. When your competitors pull back, you get more chance to shine - and this can become a self-reinforcing authority phenomenon which stays with you into the good times.
Now, it’s unsurprising that the FT (and indeed, Ciaran and I) think that people should keep spending on marketing their businesses, but the wealth of independent research that the FT has gathered (and their own behaviour - they are continuing to invest heavily in promoting their own business) is pretty compelling in my opinion.