The notion of maintaining marketing spend during – or in anticipation of – a recession may seem counterintuitive. You might be thinking of cutting spend…
But you’d be wrong.
Before you consider cutting your marketing budget in a recession, consider these three reasons to stay the course.
1. We’ve been here before. Often (and recently).
Downturns produce winners and losers. But winners from the last few downturns have had the same formula: 1.) maintain and optimize budgets 2.) weather the storm and 3.) see success in the long run.
In fact, there’s overwhelming evidence that advertising during a downturn has significant benefits.
Companies that continued to invest in growth during the 2008 recession — including maintaining their marketing spend — achieved a 17% compound growth rate according to Bain.
Progressive companies who continued to invest in marketing “will significantly outperform their rivals” coming out of a recession as shown by Harvard Business Review’s Roaring Out of Recession.
And there are plenty more studies – from McKinsey to top universities – that say the same.
This doesn’t mean investing at any cost, but instead, continuing to invest in your best-performing channels – like lead generation.
2. Increase market share by capitalizing on reduced costs.
Your competition will pull out of performance marketing or lead generation.
That’s great news.
Because when they do, costs will decrease, and your reach will increase (for less). And by staying in the game, you can reap additional market share well beyond the recession and into the recovery. Everconnect saw marketing costs drop 30-40 percent during the pandemic, allowing budgets to go much farther as marketers elsewhere pulled back.
3. Consider your long-term brand and company health over short-term savings
Providing that initial financial relief by cutting advertising seems straightforward. Unfortunately, most organizations don’t consider the negative impact on their brand and share of voice in the long term.
Compounding a short-term pullback, ramping up to regain efficiency and positioning will be expensive (and lengthy) as everyone jumps back in at the same time. Most organizations don’t consider that long-term lag when considering marketing budget cuts.
Jim Mallers is the Vice President of Sales at Everconnect, a leading performance marketing organization specializing in serving Home Service Leads. For more information on Everconnect, visit www.everconnect.com.