Pick of the Bunch: 5 Reasons to Not Cut Marketing Spend During a Recession by Steven Woodcock

When times are tough, and your revenue is taking a hit, every business will look to save money wherever it can by making efficiencies. There is no easy method to decide what to spend to save, but many business costs are fixed and can’t be changed quickly. The question remains, how do you know which areas will give you the greatest efficiencies?

Marketing often gets a spending cut during a recession, as it’s one of the quickest ways to save and is regularly not seen as a direct operating cost. Marketing spend is your customer acquisition, so cutting spending greatly affects your business. A recession can be a great time to analyse your current efforts and see what you can do better as customer buying habits change. For example, just?on paid social, there are many efficiencies you can make to push your ads further, bringing in more revenue for your spending. ?Efficiencies can be made on all marketing channels, a recession is an ideal time to increase efficiencies within your marketing to make your existing budget go further. As your business changes with the world around it, there’s no better time to convince your customers you are on their side.

So, here are 5 reasons why you should continue with your marketing spend during a recession

1. Experimenting with your marketing campaigns is best done when customer behaviour is unpredictable

During a recession, buyer habits become unpredictable as people decide what is important depending on their budget, and what your offering is. Your business will automatically become more or less attractive due to factors outside of your control. What’s important is to make sure that you adapt to your new position, and reach your customers with relevant methods and messaging to keep your company in their minds.

Email marketing product?Mailchimp saw huge growth during the 2008 financial crash recession, and grew its user base from 85,000 to 450,000 in just 1 year , as companies looked to reach audiences in a new and cost-effective way. This growth demonstrates how companies were having success reaching their audience in a new, more cost-effective way than they had traditionally been using.

2. Holding back marketing spend will further hold back your flow of customers

Every business needs to keep up, as the world is always changing, and so are the channels in which we operate. Social is growing, search is growing, out-of-home advertising is declining, as is print circulation. It’s important always to keep innovating and changing your strategy, so you don’t get caught in the past, as if you stop moving, time will not stop with you.

We can learn about the lack of investment in innovation, with examples of household names we lost during the last recession, such as Blockbuster and?Woolworths, who were decorated as one of the most successful retailers in the 90s . These companies used the same strategy in 2007 as they did before the financial crash, which meant they weren’t in a position to weather the storm of a recession. Their customer flow was already slowing due to a lack of investment.

What’s changing in digital marketing currently, is the emphasis on?the consideration phase of the buyer journey, and one main takeaway for your businesses is to invest in this, and the messy middle. ?Companies that only invest in the top of the funnel and bottom of the funnel, will be ill-prepared for a recession. It’s more important than ever to show up, now is the time to invest and be in a place to steal market share, beating your competition ahead of the upcoming uncertainty.

3. A recession can be the best time to expand into new markets and products while demand is shifting and buyer habits realign

Some companies have made a huge investments in marketing spending, as their business plan during a recession is to conquer another market and diversify their product offering. This allows them to take advantage of different economies and diversify their appeal.?Lego bought several new territories and introduced the brand to a much older demographic during the 2008 recession, investing heavily.

If you can see times are going to get tough, then look as far as you can to invest in diversification to protect your business. It is never wise to have all your eggs in one basket, be that products, strategies or marketing channels.?Embryo offers a range of services, so don’t rely on just one to keep your business operating successfully . Adding multiple channels spreads the marketing risk and allows you to switch strategies quickly, should you need to.

4. If you’re getting creative with your offering, then you need people to know what you’re doing to stay on their side

If you don’t offer value to your customers during a recession, you need to change up what you do to be attractive. When making this change, you must make sure people know about it by running awareness campaigns.?Embryo ran a fantastic awareness campaign using Digital PR for I Saw It First, ?which generated brilliant results and brought this brand to market. These campaigns were very successful in educating people about what the brand did. Social media is also an effective channel for top-of-the-funnel advertising, which you will need to use if your proposition changes to cater to a new segment during a recession.

5. Adapting is better than fading

It’s the dream that business will always come, and the magic formula you’ve created will work forever. One of the biggest things that can impact your strategy is the economic landscape, and that’s why it’s so important to keep adding to that magic and investing in the profits you make when times are good, as well as when they are tough. There are so many marketing channels and strategies to try,?Embryo offers many of them including PPC, SEO and Digital PR, ?but what’s important is to keep spending on your marketing as you expand to attract enough people to interact with you, even if the economy makes this more challenging.

If you’d like to speak to Embryo or learn more about any of our services to see how we can benefit your business, we’d love to hear from you.

About the author

Having worked in-house in digital marketing for five years, Steven Denman ’s role at Embryo is as Client Services Manager. He is responsible for ensuring our clients get the most out of their award-winning Embryo experience.

His attention to detail enables him to know the ins and outs of all his clients, which he pairs with the talent of our delivery team in order to achieve and exceed their goals.