Since 2022, the economic downturn has forced many businesses to lay off workers and cut spending budgets across the board. Businesses are attempting to keep up with the general public’s decreased consumption, however, businesses don’t want to reap less. It would seem logical to businesses that cutting back on marketing expenses would help in navigating the current financial crisis, right?
Not exactly. Looking at research from past recessions over the last few decades, businesses actually gained sales compared to other businesses that lost money trying to cut corners on spending. According to 3Q/DEPT, Kantar Millward Brown discovered that many companies that stopped advertising saw negative impacts to their brand in the following years. In addition, McGraw-Hill Research examination of the early 1980s recession uncovered that brands that kept advertising saw sales increase 256% over those that didn’t. To add to that, during the recession of the early 1990s, McDonald’s decided to reduce its ad budget and saw sales decline by 28%. However, Pizza Hut and Taco Bell (their competitors), valued advertising, and saw sales increases of 61% and 40%, respectively. (Herff, 2023).
It’s important to not look at marketing as another business cost to cut. Instead, view it as an investment that will pay dividends long term. Economic downturns actually free up the marketing field and allow companies to attract more business. This creates an opportunity to capture new customers and convert them from their competitors. By catering to customers in a sensitive, empathetic tone and appearing aware of the lifestyle shift and current economic status, your brand stands to gain more loyalty from them currently and in the future. (Kowalewicz, 2023).
Being a business owner requires flexibility. Instead of being idle during the economic slump, you can maximize revenue streams by changing your business strategy to capitalize on new market opportunities. If you need marketing guidance during this financial uncertainty, we can offer our assistance in making sure your money is utilized wisely. We can guarantee that your ROI will greatly improve through our services, and by taking a risk to improve your business’s ad revenue and clientele, we can work together to get through this trying time.