Opinion: Don’t Get Depressed about Marketing Downturn


As we face the uncertainty of a potential economic downturn, it can be tempting to cut back on marketing and technology budgets. But as industrialist Warren Buffett once said, “The best chance to deploy capital is when things are going down.” And history has shown that boosting advertising during a recession can lead to improved financial performance for up to three years after the recession is over.

A famous example from the 1920s is the battle between Kellogg and Post, two leading breakfast cereal brands. When the Great Depression hit, Post cut back on advertising while Kellogg doubled their ad budget and introduced a new cereal, Rice Krispies. The result was a 30% increase in Kellogg’s profits, while Post’s sales declined.

This idea is supported by numerous studies, including a large academic study by two professors at Oregon State University, who analyzed the performance of 3,000 companies over twenty years through five distinct recessions. The study found that companies that increased advertising during recessions had better financial performance compared to those that cut back.

In the 1990s recession, McDonald’s cut back on advertising and saw a nearly 30% drop in sales, while competitors Taco Bell and Pizza Hut grew sales by 40% and 61% respectively by increasing advertising. Jif and Kraft Salad Dressing also grew sales by 57% and 70% respectively through increased advertising.

And in 2009, despite the downturn, Amazon’s sales shot up 28% due to the launch and promotion of the Kindle. This shows that even during tough times, there are opportunities for growth through smart marketing strategies.

Recessions can create more opportunities for challengers, as dominant brands tend to prioritize protecting what they have over growth. So, instead of cutting back on marketing, companies should embrace the opportunity to stand out and make their mark.

But I understand that making the decision to increase marketing spend during a recession is not an easy one. That’s why it’s important to have a clear strategy and focus on areas that will provide the most impact and return on investment.

One way to do this is by focusing on customer engagement and loyalty. By prioritizing customer satisfaction, companies can build strong relationships that will last through the ups and downs of the economy. And by providing valuable content and experiences, companies can establish themselves as thought leaders in their industry and attract new customers.

Another strategy is to take advantage of new technologies and platforms. By incorporating new and innovative tools into your marketing strategy, you can reach a wider audience and connect with them in new and meaningful ways.

And finally, companies should always be looking for ways to improve their operations and become more efficient. By streamlining processes and reducing waste, companies can lower costs and allocate more resources towards marketing and growth initiatives.

In conclusion, while a potential economic downturn may seem like a time to pull back, it’s actually an opportunity to invest in marketing and set your company up for long-term success. By embracing new technologies, prioritizing customer engagement and loyalty, and improving operations, companies can come out ahead during tough times.

So let’s not get depressed about the marketing downturn, but instead, let’s get creative, innovative, and strategic. And together, we can emerge stronger and better prepared for whatever the future may bring.

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