The Institute of Practitioners in Advertising recently placed an advert in the FT challenging businesses not to cut their marketing spend during the inevitable impending recession, and they were right. The IPA data behind this advert clearly demonstrates:
Brands which cut marketing spend in a downturn perform worse coming out of a recession
Brands which increase marketing spend in a downturn grow market share in the recovery
The message from the IPA is clear; if your brand wants to take advantage of the recovery in 2024/25, it needs to invest long before the recovery starts. But those brands that cut spend now and wait for evidence of a stronger economy before restoring spend, are in danger of missing out, and a prolonged slow recovery at best, or nearly irreversible market share losses at worst - a position supported by research from the https://www.linkedin.com/company/ehrenbergbass/
I appreciate that for many businesses, it’s not quite as simple as that. Businesses are right to protect their cash flow, secure staff jobs and pay close attention to the cost-of-living crisis impacting everyone. So, I would recommend finding the right balance of marketing investment by diverting more spend into long term brand building campaigns, and less into short term lead generation campaigns, as fewer customers will be in market for products or services right now, but it will keep your brand top of mind.
When customers are re-evaluating their purchasing habits due to budgetary pressures, is precisely the time to reinforce your brand positioning and grow your category entry point salience. The bonus to this path is that the cost of media is likely to reduce, meaning your hard-earned budgets will stretch further, helping you create the excess share of voice (ESOV) needed for growth.
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