5 Reasons Not to Cut Your Marketing Budget in a Recession

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By Kyle McCabe | July 2, 2009

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So quick to cut? (original photo by klynslis)

Yes, okay, I’m biased. I work for an advertising and marketing agency. You might think, since the welfare of my company depends on the advertising budgets of our clients, I’d say whatever I needed to in order to convince people to advertise. Clearly an inherent conflict of interest, right?

But consider: as such an agency, we’re intimately familiar with the workings of many businesses across multiple industries, and in our role as business partners we share a common goal with each of our clients. Our job is to keep them healthy and growing with the skills and knowledge we bring to the table. So it wouldn’t make much sense to push more advertising if we knew it would hurt a client’s business.

That being said, here are some reasons it might not be a good idea to cut your marketing and advertising budget right away when times are tough:

1. Your reputation can suffer. People can view businesses that cut advertising as having trouble. If you’re not advertising, you must be struggling, right? If the viability of your business comes into question in the minds of your customers, they’re less likely to come back. You may be better off continuing to advertise, keeping your brand visible in the marketplace and strong in the minds of your customers.

2. When times are tough, people look for deals – and will sometimes go well out of their way to find them. If you’re not there to give them a deal, you could be overlooked. Continuing to advertise in such a marketplace and catering to customers looking for the best deal can give you a boost. One way to do this is to look for deals yourself – lower rates or special promos for media buys may be available for you to take advantage of.

3. If you’re not moving forward, you’re moving backward. You need new business to grow. One of the best ways to drive new business is to advertise. You have to assume there are people out there who need your services but have never heard of you. Even among those who know you, you’re much more likely to get their business if you keep your name out there. Ask yourself this: if you stop advertising, how will you gain new business?

4. Marketing in a recession can give you a competitive advantage. (h/t Jillian) Your competition may be scared and cutting their advertising. Given all of the other reasons mentioned here to not cut a marketing budget during a recession, the smart business owner who is able to see the light at the end of the tunnel and keeps dollars invested in TOMA (top-of-mind awareness) will have a strong advantage. Now imagine you cut out advertising but your competition doesn’t.

Further, even businesses that are not in direct competition with you are in the running for money people will spend during a recession. Not that you want people to forgo EATING just to buy your product, but if the choice is between two different products or services – even of different kinds – the customer’s limited funds may only go to one or the other. You might want to be the one.

5. Cut advertising, cut market share. (h/t Coree) This is a spin-off of point 4, but deserves to be mentioned. Advertisers that cut back in a recession lose market share while those who continue to advertise gain market share at a lower cost. Even in a recession people need goods and services. It’s up to you to deliver.

It’s true when business slows, you have to cut costs. That’s expected. But is marketing simply another expense, or is it an investment? If you’re not seeing satisfactory return on your marketing efforts, maybe it’s time to get smarter about your investment.

I will grant that there are circumstances in which a business can’t help but cut back on advertising – that happens all the time.

The point here is when times get tough, your marketing budget shouldn’t be the first to go. Negative movement should be a last resort. Try cutting expenses elsewhere or shifting some of that marketing budget into alternative channels that might go a little further. Focus on continued growth, wherever you can make it happen.

Can you think of any other reasons to continue advertising in a recession? Conversely, what are your reasons for NOT advertising in troubled times? Let us know in the comments.

[Photo credit: klynslis]

Tagged with advertising trends, brand management, business strategy, communication, internet marketing, marketing strategies, Rapid City, recession, search engine marketing, south dakota, traditional advertising

Filed under Advertising, Marketing

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About the author
Kyle is an interactive designer for RSA, amateur photographer, social media enthusiast, musician, blogger, and all-around web geek. He enjoys reading, writing, and breathing. You can find him on LinkedIn, Flickr, and Twitter.