Similar to the last few years, 2022 has been an unpredictable, but interesting year, to say the least. With the reports that a recession is looming or already upon us, many businesses look to cut out expenses and/or components of their business in order to save money. However, surgically trimming the budget is far easier to do during a downturn than in prosperous times. Similar to the COVID-19 pandemic and the Great Recession, media and advertising rates drop significantly during these times, giving companies a chance to invest in advertising that they couldn’t afford before. These downturns have significant upside and have been a strategic time to invest in marketing.
It is no secret that many businesses look to cut their marketing budget when faced with an economic downturn, which is exactly why not cutting your marketing budget is a smart marketing tactic. If your competitors are all cutting their marketing budgets and your business is maintaining and fine tuning your marketing strategy, it helps support your revenue stream and may actually lead to an increase in revenue and market share.
Consumers will be less likely to see your competitors’ marketing efforts and will noticeably see your company’s presence. Overall, keeping your marketing budget the same or even slightly ramping it up will quiet the buzz of competition and bring your company to the forefront.
McGraw Hill studied the 1980s recession between 1980 and 1985, a research project that involved 600 businesses from 16 different industries, some of which maintained or ramped up their marketing budgets, and some cut or declined their budgets. Their findings were truly extraordinary: Businesses that continued to advertise during the recession saw 256% higher sales than their competitors post-recession. Businesses that chose to not advertise during the downturn, saw roughly 0% market share increase and a rise in sales of only roughly 18% once the economy picked back up. In times of prosperity, you should advertise. In times of hardship, you must advertise.
For businesses, it is critical that you “bite the bullet” of the recession and continue to maintain your marketing investments to come out ahead of your competitors as the recession recedes. With media rates plummeting during this time, your agency should identify and capture those bargains for you. At CIM, that’s exactly what we’ve been focused on doing for our clients. If you’d like to discuss your business’s plans moving forward in challenging territory, our team has significant experience with the full range of marketing tactics, ranging from traditional to digital marketing.
“The best way to predict the future is to create it.”