In tough times, strengthen your marketing budget

When the market gets shaky, business leaders instinctively cut costs, and the marketing budget is often the first to go. While this might seem prudent in the short term, it can actually exacerbate a downturn’s adverse effects.  

Marketing can feel like a discretionary expense when immediate survival is the priority. 

But history, data, and case studies prove that reducing marketing spend in a downturn is a short-term fix with long-term consequences.

The most successful companies take the opposite approach: they double down. 

Take it from Warren Buffet’s philosophy on market conditions. When other people are panicking, that’s the time to buy. 

Market and economic downturns present great opportunities for businesses to earn more market share while the competition is retreating or shutting down. Mistakes are magnified in a recession, but so are opportunities for those who are prepared. 

The Ehrenberg-Bass Institute found that if a brand stops advertising, its sales will fall 16% after one year and 25% after two years. 

Cutting marketing spend doesn’t just lead to a temporary dip in revenue; it makes it harder for businesses to recover once the economy improves.

Take the 2008 financial crisis as an example. Brands that maintained or increased their marketing budgets during that time, such as Amazon and Procter & Gamble, gained significant market share and emerged stronger when the economy rebounded. 

History repeatedly shows that companies investing in marketing during downturns see outsized returns when recovery begins. 

United Airlines, as another example, invested in branding instead of cutting back during the COVID-19 pandemic. The brand launched its biggest ad campaign in a decade, resulting in a significant increase in passengers and miles flown over two years.

Tough times compel organizations to comprehensively evaluate their operations and get realistic about budget cuts. Your marketing budget should not be on this list because it fundamentally powers an organization’s sales and profitability. 

Marketing’s benefits go beyond that. Here are some other critical factors directly impacted by your spend:

In downturns, visibility is critical. 

Your competitors are also facing budget constraints, and if they cut back while you continue to invest in marketing, you gain an edge. 

It really is that simple.

If you reduce your marketing during a downturn, you’re essentially handing over market share to your competitors who will not hesitate to snatch it. 

Consider these items before slashing your marketing budget:

Keeping marketing doesn’t mean you should recklessly spend without adapting to the times. 

Instead, marketing strategies should shift to focus on:

Recessions are hard, but hard times build resilience and bring new opportunities. When you seize challenging moments with the right marketing budget and strategy, you can:

Think of marketing during a downturn as planting seeds. While others retreat, you’re nurturing growth. When the economy rebounds, your brand will be top-of-mind, poised to dominate a market hungry for solutions.