Should I cut my marketing budget during a recession?

If your first reaction is to cut your marketing budget, when faced with a downturn, you should think again.

It takes courage to maintain or even increase your marketing spend when there is so much negativity flying around.

Research shows positive results for investing in marketing.

Research shows that those who stepped up their marketing in previous recessions enjoyed success. Businesses that maintained or increased their marketing spend in the 1981 economic downturn grew by 275% over those that cut back1. During the recession of 1991, businesses that increased their spending saw up to 70% increase in sales2. There were similar results for sales and profitability in 2001, and 2007 downturns3.

Cheesy soap operas wouldn’t exist if it weren’t for the Great Depression of the 1930s.  Radio advertising costs dropped dramatically at this time. Marketing giant Proctor & Gamble jumped on the opportunity and used their soap brands to sponsor radio dramas aimed at homemakers. P&G went into the depression between the 15th or 20th largest consumer packaged goods firm in the USA. By the time they came out of the depression it was the largest in the world.5

Marketing focuses on reaching new and existing markets, keeping your name and offer in the minds of customers, and delivers leads to your salespeople. It is a vital sharp-end of business growth. So marketing shouldn’t be the first thing you cut.

“A man who stops advertising to save money is like a man who stops a clock to save time.” — Henry Ford

If competitors are withdrawing from marketing activity that will open the opportunity for you to jump into their place. It’s not a time to pull back, rather it’s time to push forward.

Even if you can’t supply customer demand at the moment you can still focus on building your brand with customers. Rather than solely focusing on short-term tactical sales, such as discount offers, allocate resources to promote your brand.

If you disappear from your customer’s minds then they may forget you or a competitor may take your place. History shows that recovery after a recession can be fast and furious. Those not prepared for it will miss out on the benefits of an economic upturn.

    Focus on what delivers results

    You will want to make sure you cut out any waste. It is important to focus your marketing efforts on what can be measured and delivers results. For this reason, we are looking to digital channels to work harder for us to produce a return on investment to the business owner. We are also being very careful with the use of traditional activities, such as events, sponsorship, and generic media advertising.  We are focussing on digital marketing that delivers sales results and therefore cash to the business owner. Digital marketing also makes it easier to control your marketing spend.

    To start with, make sure you identify problems your customers may have and then clearly communicate how your business can help solve these problems. Then select the best platforms to start communicating with your customers.

    It is unlikely that one marketing channel alone will deliver the results you are looking for. We suggest that you use many digital channels for marketing. Here are some tools that we are working with and seeing good results and will help rationalise your advertising spend:

    6 effective marketing tools that get results:


    A website that has a clear customer journey and makes a clear value offer is vital.  Having eCommerce enabled is essential for many businesses now. Writing good quality website content that answers customers’ questions is still an effective way to generate inquiries.


    Investing time and effort into a CRM (Customer Relationship Management) platform is an effective way to harness the power of digital. A good CRM comes packed with tools to help you prospect for new business, convert people into customers, can provide support after the sale and ongoing communication with existing customers.


    Social Media can build a large audience that can be converted to customers in ways traditional media never could.


    Like social media, digital advertising can reach new markets and increase your market share in highly measurable and affordable ways.


    Don’t forget email marketing. It is still a great way to retain a strong relationship with existing customers.


    Lastly, direct contact either by phone or in-person is often the best approach.

    So, keep your advertising expenditures up unless your short term survival depends on it. Be wary of switching from marketing that builds your brand to price discounting.

    Be sensitive to how your customers are feeling and show empathy and care in your advertising. You may even look for opportunities to help others who are struggling at this present economic times.

    Keep sharing your brand good news, and if history is anything to go by the good times will return and so will strong sales and bigger profits.

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    How branding services can boost your business

    If you would like to discuss your brand with an experienced branding agency, please call to make an appointment for a free 30-minute telephone consultation. One of our experienced Account Managers will discuss your brand and will do their best to answer your questions.

    Our qualified and experienced team provide quality creative branding services and management skills to deliver work at the highest standards.

    A well-crafted brand, consistently applied, is an immensely powerful tool for creating exceptional customer experiences, making sales,  building your marketing, business or organisation. So contact us today to see how we can help you produce world-class branding, marketing and communication.