Cutting Your Marketing Budget in Times of Crisis … Yes or No?
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Cutting Your Marketing Budget in Times of Crisis … Yes or No?

April 21, 2020

During times of crisis, much like the global pandemic we’re facing with COVID-19, it becomes extremely easy for businesses to panic, which usually shows as knee-jerk reaction to cancel any and all marketing activity. Quickly cutting these costs may seem like a solution to potential financial trouble, but it can actually leave you worse off when the world returns to normal.

Cutting your marketing budget in anticipation of, or during, a recession can potentially be more damaging to your business than the crisis itself. A study from the IPA (Institute of Practitioners in Advertising, UK) found that when businesses cut their marketing spend by 50% it took them 3 years to catch up to their competitors who had not made any reductions to their marketing budget during the crisis.

Roland S. Vaile, a Masters graduate of Harvard in 1924, studied the fortunes of 250 firms following the end of the First World War and the ensuing Spanish Flu epidemic. Using secondary data and an occasional survey, he followed these companies through the recession and into the growth period that ensued.

Vaile’s reports showed that the companies who had continued to advertise during the crisis were 20% ahead of where they were before the recession. The companies who reduced their marketing were still in the recession and – 7% behind where they were in 1920.

Maintaining your marketing activity can help you to project an image of corporate stability to consumers and retain customer loyalty which can lead to even more success when their spending picks up again. All businesses should keep their main focus on having a solid business in the post-crisis period, and history has proven that those who do just this are those who continue their business activities as though nothing has changed other than their marketing strategy in response to the crisis.


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