Though the U.S. economy has shown signs of bouncing back, fears about entering a recession aren’t unfounded. Periods of great economic uncertainty, like the one we’re living through now, create an immense amount of uncertainty for businesses of all stripes. Often, however, organizations respond to this type of uncertainty in predictable ways.
They’ll shelve long-term projects, focus on short-term needs, and cut spending on anything not deemed “mission critical.”
Right now, marketing leaders might be considering cutting their advertising spend and putting a hold on marketing efforts to preserve resources until the economy appears to be on more solid footing. This mentality might seem pragmatic, but according to a recent study by Analytic Partners, marketers who cut spend risk losing 15 percent of their revenue during a recession.
Economic recessions and periods of market fluctuation are defining moments for the marketplace. Moments of disruption can be the times when smaller players pull ahead of industry stalwarts.
Though it might seem counterintuitive, reducing ad spend during a recession can be likened to bloodletting — a once common treatment that not only didn’t cure disease, it actually reduced patients’ ability to fight it. Companies that have bounced back the strongest after a recession didn’t cut their advertising spend. Citing a study of how companies fared during and after major economic downturns, Harvard Business Review found that institutions that thrived did a few things differently:
In the early days of the dot-com boom, Amazon’s initial public offering was priced at $18 per share. In just two years, its value had increased by more than 50 times before plummeting to less than $10 per share after the bubble burst. But Amazon was undeterred. Taking the long view, they had a huge competitive advantage and today, it’s the world’s fifth most valuable company.
In 2008, brands like Netflix, Citigroup, Lego, and Warby Parker took a similarly growth-minded approach to emerge from the Great Recession stronger than ever.
From a marketing standpoint, it’s important to consider how you can use your advertising budget in a way that’s not simply reactive, but proactive.
While today’s uncertainty calls for careful strategy and smart spending, it is no time to simply hunker down and wait for risk-free opportunities to come your way. As other downturns have shown us, organizations that adapt and continue to connect with customers and prospects will be better able to weather today’s storm, and better positioned to thrive when it passes.
As a marketing leader, here’s what you can do:
Coordinating closely with other departments and decision-makers, having clearly defined goals, and working with an experienced creative team are key to speeding up projects and cutting ad spend.
CrucialContent is ready to help your organization accomplish more with its marketing budget, so you can better adapt to these challenging times. Turn to us for a full range of cost-effective traditional and digital marketing services, a streamlined process, and deep marketing expertise. Contact us to learn more.