Don't Leave Marketing on the Back Burner

The Temptation to Cut Marketing

In challenging times, businesses often look for areas to trim budgets, and marketing frequently tops the list. It's perceived as expendable, a luxury rather than a necessity. However, sidelining marketing can have long-term detrimental effects on brand visibility, customer engagement, and revenue growth.

The Hidden Costs of Cutting Marketing

Reducing marketing efforts doesn't just save money; it also diminishes brand visibility, weakens customer relationships, and cedes market share to competitors who maintain or increase their marketing activities. A study by the Association of National Advertisers during the 2008-2009 recession found that companies maintaining or increasing their advertising spend experienced an average sales growth of 12.6%, while those that reduced marketing expenditure faced an average sales decline of 12.1%. ​FMS: Marketing Agency

Moreover, a McGraw-Hill Research study analyzing 600 companies between 1980 and 1985 revealed that businesses maintaining or increasing marketing spend during a recession saw significantly higher sales after the economy recovered. Companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise. Wharton

Reducing or eliminating marketing efforts can lead to:​

• Loss of Market Share: Companies that cut brand spending lost 0.8 percentage points of market share relative to those that boosted brand spending. ​
  

• Decreased Customer Engagement: Without consistent marketing, customer engagement dwindles, leading to reduced loyalty and sales.​
  

• Stagnant Growth: Marketing drives awareness and demand; cutting it can stall business growth.

The Strategic Advantage of Sustained Marketing

Maintaining marketing efforts during downturns isn't just about survival; it's about positioning for accelerated growth when the economy rebounds. Brands that continue to engage with their audience during tough times are more likely to be top-of-mind when consumers are ready to spend again.​

Furthermore, economic downturns often lead to reduced competition in advertising spaces, resulting in lower costs for media placements. This environment provides an opportunity for brands to increase their share of voice and capture greater market share at a lower cost.

Maintaining or increasing marketing efforts, even during downturns, offers several advantages:​

• Increased Market Share: Companies that increased their marketing budgets during past recessions saw notable sales growth, with one study reporting a 20% sales increase compared to pre-recession levels. ​
  

• Enhanced Brand Recognition: Consistent marketing keeps your brand top-of-mind, making it the first choice when customers are ready to purchase.​
  

Long-Term Profit Growth: Investing in areas such as share of voice, technology, and branding drives long-term profit growth and sustains brands during recessions. ​BCG Global

Real-World Examples: Success Amidst Adversity

Kellogg's vs. Post: During the Great Depression, cereal giants Kellogg's and Post took divergent paths. Post cut back on advertising, while Kellogg's doubled its ad budget, introducing Rice Krispies and investing heavily in radio advertising. By 1933, Kellogg's profits had risen by 30%, establishing it as the industry leader—a position it maintains to this day .​

Del Monte Foods: In the 2008 recession, instead of reducing its marketing staff, Del Monte hired a Chief Marketing Officer, increased its ad budget, and launched several consumer-focused campaigns. This strategic move led to a profit of nearly $60 million in Q1 2009 after a loss of more than $10 million the previous quarter. ​Mercom Capital Group

Marketing as a Non-Negotiable Investment

While it's natural to scrutinize expenditures during economic uncertainty, marketing should not be viewed as a discretionary cost. Instead, it's a critical investment in a company's long-term health and competitiveness. By maintaining or even increasing marketing efforts during downturns, businesses can strengthen their brand, deepen customer loyalty, and emerge stronger when the economy recovers. ​Boostability