To Spend or Not to Spend on Marketing During a Recession
Having worked in the tech industry for over a decade and lived through the infamous bubble bursting in 2000-2001, I’ve seen firsthand how companies reach for the ax to lay off marketing personnel first and foremost when times get tough. In fact, it’s almost become an unspoken best practice: cut marketing first, finance last.
I’d like to offer three reasons why I believe it’s wrong to cut marketing during a recession.
First, one of the main goals of marketing is to generate sales. And isn’t that what’s needed the most during an economic downturn? Rather than focus on laying off staff, how about looking over all marketing personnel with a fresh eye to make sure that everyone is focused on sales and ROI. Examine marketing spend and delay or eliminate items that aren’t directly related to the main goal. Is that sponsorship of the golf tournament really necessary? Do we really need that large a tradeshow booth, or could we live with a hospitality suite and divert the saved budget towards a direct mail campaign?
Second, since your competitors will most likely be cutting back their marketing spend, you may find marketing costs lower during a recession. Magazines and web sites may be more willing to bargain and offer you some hot deals on placement and packages since their sales people will be hurting. Negotiate hard, and even look to lock up some long-term packages that might carry over even after the economy rebounds. In other words, be the company that buys the Christmas tree in January.
Third, sometimes the way to succeed is to zig when everyone else is zagging. When will a better opportunity come to hit your prospects harder than when your competitors are cutting back their advertising, marketing or public relations? I say use this against your competition. Take this opportunity to blitz the market, and watch your momentum carry over into the good times.
If done correctly, you can make wine out of water by spending judiciously but aggressively during a recession.
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