For most businesses, when tough times are bout to hit, the first thing to go is the marketing budget. After all, you can’t be sure of its results anyway, right? It’s an intangible expense, often seen as a ‘nice to have’. In 2020, marketing budgets were slashed to their lowest level for over a decade across the globe. Even Google cut their marketing budget in half at this time. If the big players are doing it, it must be right, surely? Marketing budgets become hard to justify when every other department is tightening their belt. But here’s the thing, study after study has shown that businesses that spend more on marketing when times are tough are more likely to ride the storm. Not only that there is a huge amount of evidence showing that companies that maintain or increase their marketing spend in recession don’t just survive, they thrive! Cutting your marketing budget could be seen as the logical thing to do, its numbers on a spreadsheet, but is it really?
Marketing isn’t just about the economics, it could be about how your brand is perceived. Only 8% of consumers thought that companies should stop marketing during the pandemic. So pausing your marketing because of customer perception just isn’t an argument.
Why have studies shown that business that maintain or increase marketing spend do well? The answer could be simple: There’s less competition. If everybody is cutting back, ad spends like cost per click goes down. You’re getting more eyes on your ads because no one else is doing it. You see, its not about cutting marketing spend, its about being bit cleverer with how you market. For example, you might channel more funds into a particular strategy that sends a positive message. Ford and Ikea did this in 2020 and it led to a serious increase in revenue and profits.
Cutting off marketing is like not putting fuel in your car to save money. Eventually you’ll just grind to a halt. Marketing is what feeds the rest of your business. The problem is most business owners don’t know this because they are not measuring their marketing RoI effectively. In addition, if they are measuring it they tend to cut those that aren’t producing results. This seems like the right thing to do apart from a couple of reasons. One, it’s a marketing mix and most strategies have complimentary tactics and two, most marketing that has worked in the past won’t work in the future. Just because one area is producing results now, doesn’t mean it will continue to do so in the future. Given the economic uncertainty facing the country budgets are being cut everywhere, this means that there are less deals and less money when deals are converted. In other words, cutting your marketing budget is like a double whammy for your business. You get less bang for your buck to begin with, now with less marketing you’re compounding the issue. So before you cut your marketing budget, do these three things:
- Track your numbers, I mean really track them. If you outsource your marketing hold the agency to account. You have outsourced your responsibility, you have not abdicated responsibility it is still your problem.
- Change up your strategies. Develop a new campaign message or re write your value proposition. Changing these things will undoubtedly led to new conversations and new deals demonstrating what marketing gives you in terms of a pipeline
- When others zig, you zag. I’ve stolen that line but its true. What are people not doing and where does that create opportunities for you?
I would love to know how your marketing has changed over the past year or two – did you cut or spend more? Drop me a message to let me know!
