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Before You Tighten That Marketing Budget, Consider This
Written by MACLYN President & Managing Partner Bill Murphy
It feels like it was a lifetime ago, and also like it was just yesterday, that the U.S. went into lockdown. I remember so many details from that surreal time, from fan-less NBA games to bare aisles at the grocery store.
But most of all, I remember the feeling. The fear.
Fear drives many decisions, especially during a crisis. It can be a good thing—an alarm bell that alerts us to danger, a wake-up call that pushes us to act. But fear can also lead to questionable choices, herd mentality, and short-term, narrow-minded thinking.
During the COVID-19 lockdown, as well as the 2008 recession, fear led many businesses to cut back on their marketing spend.
As a business owner, I have mixed feelings about those cuts and the fear that drove them.
On the one hand, I get it. Marketing can seem pretty abstract, especially when you’re focused on the day-to-day running of your business. If you have to cut something, it’s probably the first place you look.
On the other hand, putting aside my own bias as the president of a marketing agency, I think that many of these businesses made a mistake. What may have seemed like an easy way to save money ultimately resulted in lost revenue and missed opportunities. They let their fear do their thinking for them. And while it promised safety, it led to stagnation.
As we head into what may be a recession, my fear is that businesses are going to make the same mistake. I want to challenge you to think differently.
The fear that drives businesses to cut back on their marketing spend is understandable but (usually) misguided.
First of all, good marketing drives revenue. It’s profitable; it generates more money than it costs to produce. Cutting back on a profitable area of your business may be a quick way to reduce expenses, but in the long run it will only lead to financial loss—the last thing you want during a recession.
(Side note: If your marketing doesn’t generate revenue, directly or indirectly, then it probably isn’t good marketing. Of course, the impact of some forms of marketing can be hard to quantify, but all marketing should ultimately help support the business. If it doesn’t, it’s not good marketing. And you shouldn’t be investing in it, period.)
Dollar for dollar, marketing is more effective, and more valuable, during recessions. There are fewer businesses competing for space, so digital ads are cheaper, marketing tech costs less, and there’s generally less noise, which makes it easier for businesses to reach wider audiences and form stronger connections.
Recessions are bad for the economy at large, but they can be transformative opportunities for individual businesses. Time and time again, amid recessions and other crises, I have seen clients who go against the grain and continue investing in their brand emerge stronger. They choose to buck trends, and it pays off. Were they afraid at the beginning? Of course! But they didn’t let their fear make their decisions for them. Instead, they used it as fuel to think creatively and think big.
For all the reasons above, businesses should avoid outright cuts to their marketing budgets. Instead, invest more of your resources in marketing that drives people to your business and encourages them to spend. That includes areas like SEO, content generation, website maintenance, customer experience, and social.
And if you can’t avoid cuts, at least avoid cutting back on the areas that directly generate revenue. Don’t let fear drive you into making poor decisions at a critical time.
What’s often lost in the conversation is that there are different kinds of marketing. There are the Super Bowl-sized commercials, the kind that cost millions to produce and win ad industry awards.
And then there’s the other side of marketing, the side that’s all about engaging your audience, creating better customer experiences, and producing content that people really care about. You know, the stuff that works.
Honestly, I’m not a big believer in the former. Even in the best of times, I think some brands are wasting their money on flashy, ultra-expensive campaigns when they could be investing in a better experience for their customers. Businesses should cut back on wasteful spending, especially during a recession. But don’t confuse the ineffective, expensive type of marketing with the type that makes money for your business.
I’ll leave you with this. Please don’t let your fear of the unknown push you into choices that negatively impact your business, even if that’s what everyone around you is doing. Instead, focus on how you can turn this time of uncertainty into an opportunity.
Talk with your marketing partners. We’ll listen. Ask us how we can adjust your current strategy to focus on generating more revenue. Think about how you might grow your business while others are pulling back. Challenge our team and yours to get creative. Focus on the aspects of marketing that support your business. And always, always, do what works.
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