Why You Shouldn’t Cut Your Marketing Budget In A Recession

Nowadays, when companies experience a recession, one of the first places they cut spending is advertising. And with businesses struggling to stay open, agencies are being hit especially hard. Even tech giants like Google and Facebook have seen their ad revenues go down as a result. But cutting marketing spending is only going to make things worse in the long run – it’s equivalent to “bleeding” a patient in order to treat them (an old-fashioned method that doesn’t work).

Most of the time, firms that have bounced back strongly from prior recessions did not reduce their marketing spending and in many cases even increased it. However, they adjusted what they spent their marketing budget on and when to reflect the new environment in which they now operated. Let’s start by looking at the many types of marketing costs.

It’s a common misconception that marketing is the first thing to go when budgets get tight. But in reality, marketing should be one of your top priorities during a recession.

Here are three reasons why:

First, marketing helps you maintain and grow your customer base. In tough times, it’s more important than ever to keep your existing customers happy and loyal. Marketing can help you do that by keeping them informed about new products, services, and deals.

Second, marketing can help you attract new customers. Even in a down economy, there are always people looking for good deals. Smart marketing can help you reach these potential customers and convince them to give your business a try.

Third, marketing is an investment, not an expense. Unlike many other business expenses, marketing doesn’t just go away when times are tough. In fact, it can be even more critical in a recession.

Strategies to market your product and increase sales

It may be beckoning to cut back on marketing, but there are ways you can carry out your existing plans more efficiently to optimize sales. You can remain at the forefront of consumers’ minds without overspending by being savvy about where you spend your money.

Define your audience

To prioritize your marketing, make sure that sales and marketing are in sync. To function effectively, marketing must give content that addresses customer pain points and produces qualified leads, while sales must have a high close rate on those leads. When both teams are aware of their responsibilities and keep to their end of the bargain, it’s easier for the whole company to see how much value its investments in marketing would produce.

Defining your target audience is simple when you generate a buyer persona. This “semi-fictional representation of your ideal customer” will help marketers understand who those qualified leads are.

Creating an accurate buyer persona necessitates using existing customer data to get a grasp of your customer’s demographics, interests, and pain points. You can access this information from sources like Google Analytics and your CRM software, or by interviewing your current customers.

The more you understand about your target market, the easier it is to reach other individuals who fit that description and generate leads that are more likely to convert into paying customers.

Refine PPC campaigns

After you’ve developed buyer personas, you may adjust the targeting of your marketing efforts to focus on these high-value prospects. This means fine-tuning both your target audience and ad copy for digital advertising in order to improve conversions.

After you’ve established your campaign, begin using A/B testing to discover the most successful messaging and optimize your performance even further. Continue optimizing targeting and advertising to increase clickthrough rates and decrease cost per lead.

If your marketing team puts in a little extra effort, they can increase the number of leads, even with a smaller budget. To make sure you’re getting the most out of these efforts and determine whether they’re worth it, confirm that your Google Analytics is properly set up.

Focus on efficiency for SEO

Even if you don’t have a lot of money to spend, there are still ways to optimize your marketing strategy. One way is to focus on “quick-win” tactics in SEO that won’t take up too much time but can make a big difference in how visible your website is.

Marketers who don’t have the time, money, or resources to create fresh material should consider focusing on improving existing content instead. Marketers may use Ahrefs Site Explorer to find material that currently appears on page 2 of search results, which are great targets for improvement. You can improve your content’s position by changing the title tag, answering common questions, and including images. You may enhance your content’s ranking by updating the title tag, adding answers to commonly asked questions, and incorporating pictures.

Even if you’ve already done everything correctly in terms of SEO, now is not the time to drop the ball. Continue to improve your optimization with regular evaluation and adjustments. With ongoing activities like link creation, on-page improvement, and Google My Business profile management, you may help stay ahead of the competition.

R&D and new product launches

Developing and releasing new products is always a bit of a risk, so companies often have to debate which of their multiple projects in progress should make it to market. In this light, halting new product development during an economic recession would seem like a no-brainer.

According to research in a variety of countries and industries, products introduced during a recession have both better long-term survival prospects and higher sales revenues. That’s partly owing to the fact that there are fewer new items to compete with, but it also stems from the idea that firms focused their R&D investment on their greatest opportunities — which might explain why goods produced during recessions have been shown to be of higher quality.

Naturally, timing is crucial: Our study found that the optimum time to release a new product is shortly after a recession’s midpoint. This is when customers begin to consider non-necessities, even costly products they don’t want to buy yet (such as automobiles). A new and creative product instills optimism in the consumer that the economy will improve and that he or she may soon be able to afford it.

Even if companies don’t have any new products ready to market, it’s still smart for them to invest in research and development during recessions. This has been shown to improve long-term performance more than other categories of marketing spending, such as advertising or price promotion. Companies that maintain their R&D budget come out of the recession stronger, especially in industries that are linked to economic cycles like automobiles, cement, and steel.

Promotions and discounts

When sales start to drop, managers may want to raise prices in order to keep earning revenue and maintain their margins. However, this is a terrible idea for several reasons: One, as people become more touchy about money during tough economic times, raising prices will only make it less likely that customers will buy your product. And two, research has shown that companies who often switch between raised and lowered prices actually lose MORE market share than those who don’t fluctuate.


If a company doesn’t want its brand to suffer during an economic recession, it’s important that they maintain or increase its advertising budget. For example, in 2008 when the world was reeling from a financial crash, Reckitt Benckiser created a marketing campaign to keep users interested in buying their more high-end products. When faced with slumping sales, Reckitt Benckiser boosted its advertising outlays by 25%, yet revenues and profits rose significantly. When compared to their competitors, they saw advertising as an investment rather than a cost. The content of advertisements during recessions must reflect the problems that customers are facing.

During a recession, consumers want to see companies stand together. Successful brand advertising not only adds humor and passion to the mix but also answers consumers’ concerns by suggesting how they may assist.

In 2020, Coca-Cola decided to use its budget for advertising to instead showcase the work of frontline workers. These mini-stories became known as unsung heroes. The company wanted consumers to remember that they will always be there for them even in difficult times.

Another example, with the outbreak, Singapore Airlines grounded its crew and instead had them help in the community. Some took patients’ vital signs and served meals to nurses, while others helped transport people around safely and ensured that social distancing guidelines were followed.


Times are tough, and marketing during a recession is even tougher. That’s because it often flies in the face of customer behavior, which has changed drastically to reflect changes in their circumstances and needs. In this environment you must journey with your customers, updating your message and revamping your value proposition to match their new mindset. Now is the time to change how you spend your money, not stop spending altogether. This is also an opportunity for companies that are willing to adapt to their customers’ needs during a recession. By doing so, they can keep many of their new customers and cement the loyalty of those they already had.

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