Cutting marketing budgets during a recession. Bad idea.

It is common wisdom that the first thing to scale back during downtimes is your marketing budget.
This is screwy for a number of reasons and can be downright dangerous to the future of the business. Here’s why:

  • Typically, by the time we know we’re in a recession it has been going on for several months.
  • The average recession lasts around eight months.
  • The lead time for effectiveness of any marketing campaign including online is 2-6 months. Last year we had a Google rep tell us that you cannot judge the effectiveness of PPC until it has been running at least six weeks. Of course he would not give details and it’s in their interest to encourage long tests, but I can see the logic.
  • If you stop or cut back your marketing during a downtime you’re cutting off your nose to spite your face. Let’s say I decide I’m in a recession and business is down so I need to economize. I cut back drastically on my marketing. Since I probably stalled on my decision while trying to figure out whether we really were in a recession let’s assume that four months of the actual recession have passed when I cut bait. Three months later things are looking up so I start ramping up again.

A month later the recession ends and business starts to swing upward but my marketing has two more months to regain a foothold. I lose a potential big burst of business optimism because my market needs to learn over again that I’m around to do business with.

Lesson: We are marketing now for sales later. Reacting to situations now in ways that hurt us later is bad strategy. You’d be better off increasing your marketing at that point when things seem to be at the bottom so you can have a head-start when the up cycle begins anew.

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