In my many years of seeing most all the different variations of local businesses who cut their media marketing investment in recessionary environments, those who keep prodding along mostly capture share from local competition who sit it out and do nothing .... other than watch their share decline to catastrophic levels. Trying to win back lost customers or clients is often a lost cause. Sam Walton had it right, " Funny thing happens when you stop inviting customers to come to your store, they stop coming.!" Philip Jay LeNoble, Ph.D.

In Recession, 'Invest or Cut Marketing Spend?' Is The Wrong Question

• by Jason Chebib , 2 hours ago

When COVID lockdowns loomed in 2020, there was much discussion about whether brand owners should continue to spend on marketing. The alternatives included trimming or pausing budgets – in reality, often dropping them to the bottom line. Views were often informed by learnings derived from the last global recession in 2008-9. To spend, or not to spend, was the question.

It could be argued this wasn’t the best question. Or at least that, by the time it was asked, it was moot.

On the one hand, if your business has reached the point where you’re seriously considering cutting your marketing budget, it’s probably already too late to make a real difference. Poised to cut, the business is likely decelerating and probably declining.

Exhorting the business not to cut that budget is too little, too late.

On the other hand, if you’re winning, the situation is already working for you. If your business is thriving during changing times, then it’s likely to be business as usual for marketing. These dynamics can be that much more visible in a recessionary context.

Realistically, most businesses aren’t operating in that kind of clarity. Most don’t find themselves at either extreme, but rather face category-wide uncertainty and an unclear competitive outlook. Neither a decision to disinvest, nor one to invest ahead, comes with much surety.

We all know brands with no budget can’t accelerate growth. In the face of any meaningful competition, without budget, a growing brand will slow -- and a declining one will slide faster.

But we are also naturally tempted by the prospect of turning a downturn to our advantage. There are losers and winners in every recession. How can you emerge a winner?

First, ask a better question. Namely: if we’re going to make a calculated investment, how do we make the smartest investment possible? That’s a question that’s much more relevant in the unpredictable real world, when “invest or cut?” no longer is.

A recession isn’t just an opportunity to invest. It’s an opportunity to invest smarter.

By foreshortening timescales and increasing pressure, recessionary conditions focus business minds on what a brand really needs -- short term and long term -- from its marketing, communications, innovation and portfolio management. Pricing, promotions, delivery mechanisms and channels are thrown into starker relief. If not now, when?

For most brands, tough times should rarely mean a choice between shutting off the faucet completely or opening it full flow. They should mean a couple half turns each quarter, justifying a little more expenditure based on a complex, changing set of market and competitive conditions.