Do you need to cut marketing spend?
Historically, the first area of businesses to suffer during economic downturns is marketing.
According to a report by the Association of National Advertisers (ANA) and the Marketing Science Institute, marketing budgets declined by an average of 8% during the 2008-2009 recession. Additionally, a survey by the American Marketing Association found that 62% of marketers reduced their marketing budgets during the same period.
Cutting marketing spend can be a quick way to reduce costs as it isn’t necessary to keep the day-to-day business running, but it often harms businesses in the long run as growth becomes inconsistent, if not impossible without an active marketing strategy.
In addition, reducing marketing spend can also have a negative impact on brand awareness and customer loyalty. If consumers perceive your brand as being less visible or less committed during tough economic times, it could erode their trust, making it harder to regain their business once the economy improves.
You may be thinking “you’re a marketing agency, of course you’re going to say that.” But actually, for some companies, cutting marketing spend is the right strategy to better adjust to the current economic climate.
For example, you could focus on targeted marketing campaigns that reach your most profitable customer segments, or invest in digital marketing channels that offer a higher ROI than traditional advertising methods. This might be cheaper (and more profitable) than what you’re currently doing.
Ultimately, the decision to stop or continue marketing spend during a recession should be based on a careful analysis of your business’s specific circumstances and goals.