With a lot of worries over the economy and Brexit, marketing budgets have flatlined for the first time in 6 years at the end of 2018 Q4 according to the IPA Bellwether report. Media advertising, direct marketing, market research, and PR have all been effected and budgets have been cut. Digital marketing wise, search and SEO dropped for the first time since 2009 and mobile advertising also feel.
This is due to the political and economic uncertainty brought on the ongoing Brexit negotiations. Marketing budgets haven’t decreased yet but they have stayed the same for the first time since 2012 which has dampened marketers’ outlook for the year ahead too. Bellwether predicts an almost neutral stance on overall ad spend budgets. 27% of marketers predicted a small budget increase but 26% predicted cuts.
This fall of marketing budget is likely to be a suggestion that UK businesses are trying to tighten belts in preparation for whatever Brexit might bring. Often, during times of uncertainty and recession, marketing budgets are the first to be cut. For example, Jaguar and Land Rover announced last week that they would be cutting over 4,500 jobs with the majority of these being in admin and marketing roles. But, we argue that you shouldn’t be cutting any marketing jobs or budgets during economic uncertainty or recession. During the 2008 recession, those increased or kept their budgets steady performed much, much better in the long run in comparison to those who cut their budgets. Plus there has been ample research to suggest that those who increase their marketing spend during times of economic difficulties improve business in the long run.
We’re not suggesting that a recession is imminent but there are economic concerns at the moment and we know that means marketing budgets might be the first to take the hit!
Starbucks survived the 2008 recession after shutting multiple stores by focusing on it’s mobile and social media marketing. It released a mobile app and went for ‘cool’ branding on social media and not only survived, but thrived, after taking a big hit at the start of the recession. Read more about this here.
Marcus Sheridan story
As far as smaller businesses go, a lot of people may be familiar with the Marcus Sheridan story. During the 2008 recession he completely turned his swimming pool business around with his content marketing strategy. He using inbound and content marketing techniques that resulted in his organic website traffic increasing 9 fold in just 3 years. The techniques he used were 15 times cheaper than traditional outbound marketing techniques in generating leads and he prides himself in creating content that he knew people would love and search for. The beauty of SEO and content marketing!
So, now you have two very different but equally as proving case studies, what is the theory behind increasing your marketing budget during these difficult times? How does this actually help your business and why you should do it?
First of all, if you fail to continue putting money into your marketing budget, it leaves your brand in a less competitive position when the economy recovers. Those who consistently invested in their marketing will be much stronger when the economy inevitably bounces back. This is because you have stayed consistent with your branding and haven’t gone ‘quiet’ so your brand awareness is still high among other things.
Secondly, if you increase your marketing budget when everybody else reduces theirs, the reduction in noise provides opportunities for your advertising. Think of it this way, people aren’t spending money on ads, so there’s less of them, and therefore more space for people who are investing. If there’s less competition then you are likely to get more for your investing.
Finally, the relationship between share of market and share of voice is important. If you are increasing your marketing budget when competitors reduce theirs then you are increasing the prominence and quality of your brand which could establish an advantage that could be maintained for years. This is a proven relationship, read more about it here.
So, if you’re thinking about cutting your marketing budget because of Brexit uncertainties, you might want to think again!