Think twice before cutting your marketing budget

Think twice before cutting your marketing budget
Jan 23

Christopher Brown

Cutting your marketing spend could be a dangerous move.

With the US tethering on the edge of a recession, it's more important than ever to be strategic about your marketing budget. When sales are down and budgets are tight, you may be tempted to cut your marketing spend in an effort to save money. However, this can be a dangerous move.

The risks of cutting your marketing budget

Scaling back your marketing budget can have some unintended consequences. Reducing your marketing spend can lead to a loss of online visibility. If you're not investing in SEO or other forms of digital marketing, you risk dropping off the radar of potential customers.

When potential clients search for your product or service online, they're likely to choose from the options that appear on the first page of the search results. If your website isn't appearing on the first page – or worse yet, if it's not appearing at all – then you could be missing out on valuable leads. What's more, dropping off of the search results can have long-term consequences for your business. Your organic rankings can drop over time due to changes in Google's algorithm and a lack of fresh content, leading to a loss of organic traffic. To maintain your online presence, paid channels like digital advertising require an ongoing budget.

Cutting your marketing budget can set you up for a competitive disadvantage when the economy recovers. If your competitors are still investing in their marketing efforts while you're scaling back, they'll be in a better position to win market share when business picks up again. Reducing your marketing spend can also damage your brand equity and make it harder to attract customers in the future.

Take a strategic approach to your marketing budget

Instead of cutting your marketing budget during a recession, it's important to take a strategic approach. Prioritise marketing efforts that are most likely to boost sales, and focus on ROI when making decisions about where to allocate your resources.

Evaluate which marketing activities are most likely to generate sales in the current economic climate. For example, if customers are cutting back on discretionary spending, paid advertising may not be as effective as it was before the recession hit. However, investment in more budget-friendly efforts like SEO optimisation and content marketing could help you attract new leads who are looking for ways to save money.

Increasing your marketing budget will make you more competitive

While we can't be sure when exactly the next recession will hit, it's important to be prepared for when it does. Many companies cut back on spending during tough economic times, but this can actually be an opportunity for you to gain ground. By increasing your marketing and advertising spending during a recession, you can put yourself in a position to come out on top when the economy recovers.

Just look at companies like Kellogg's that became an industry leader by increasing its marketing during difficult times. If they can do it, so can you. According to Forbes, there are several reasons to ramp up marketing and advertising efforts during an economic downturn, backed up by studies dating back nearly a century.

If you're considering reducing your marketing budget in a recession, think carefully before doing so. It is important to consider many factors, including cash flow and financial conditions, that affect where and how you spend money. But if it's feasible for your business to maintain (or even increase your digital marketing), it could pay off exponentially in months and years ahead.

Are you refreshing your marketing campaigns to keep up with that changing economic landscape? We’ve created a helpful checklist to help you maximise your return on investment for your inbound marketing campaigns. Download it below.