Rob McGlennon issues a warning to be cleverer with marketing budgets, rather than cutting them altogether, as markets shrink and competition increases.

During the Great Depression in 1920s America, Kellog made the seemingly crazy decision to double its advertising budgets, invest in radio advertising, and launch a new cereal – Rice Krispies. Its main competitor, Post, did the opposite.

It was not confident in consumer spending, so cut back on its marketing and advertising. As a result, Kellog’s profits rose by almost 3% during the most despairing of economic times and has remained a dominant brand in the breakfast cereal market for decades. Post has been playing catch up ever since.

The temptation during challenging economic times is to take a sharp knife and slice through unnecessary spending such as marketing, advertising, PR, product development… allowing that cash to cushion your bottom line and give you a more comfortable ride.

The general consensus is that the market cake may have shrunk, and the most sensible approach is to protect what you have, gather it close, and wait out the darkness. When hope starts to flicker on the horizon, you can emerge blinking into the light ready to start building again.

Are you expecting to pick up where you left off, reclaiming market share and market position?

Have you observed what your competitors may be doing during this period of hibernation?

Unfortunately, that one decision will have probably cost you years of potential growth, because you are not actually cutting expenditure, but future demand. You may have spent years building your brand to this point, but attention is fickle and you’ll find that you’ve been superseded by a more strident competitor who has maintained their commitment to the market, and to getting its message out, being that firm, reassuring voice in a shaky market.

Allegedly it was Henry Ford who said: “A man who stops advertising to save money is like a man who stops the clock to save time.”

I am hearing whispers across the industry of marketing budgets being slashed left, right and centre, and I want to urge caution when yielding these knives. While examining spending is the correct approach, slashing for the sake of not spending needs deeper thought.
For short term comfort, are you sacrificing long term growth? Will your sudden silence in the marketplace sow seeds of doubt about the reliability of your business? Will that silence be filled by that louder voiced competitor who is constantly snapping at your heels?

There is a momentum to the ‘drudgery’ of everyday marketing that is often not appreciated until it no longer exists. Your Google rankings start the slip. AI platforms have fewer digital references. The trade press pages are taken over by your rivals.

LinkedIn algorithms shift and change in a different direction. And potential buyers turn to other, more visible, options.

So when you do restart your marketing, you have to start from a lower position and spend the money just to get back to where you used to be. Meanwhile, your competitors are feasting on the percentage of the cake that could have been yours!

All budgets are currently under immense pressure – we all understand that. Who you spend your money with is the real conundrum. Ask yourself…
• Is the activity reaching commercially relevant people?
• Does it strengthen recognition, trust or differentiation?
• Can one strong idea work across PR, LinkedIn, email, web and sales?
• Is your chosen agency producing meaningful thinking or merely filling a schedule?
• Is marketing supporting sales conversations?
• Are results measured against commercial objectives rather than superficial activity?

Today’s marketing cuts may cushion today’s bottom line, but only at the expense of tomorrow’s pipeline.

Even with reduced marketing budgets, you can be clever and resourceful, eliminating the vanity while maintaining the messaging, changing the goal posts without sacrificing the goals. A bit of lateral thinking, going old school, cutting the unnecessary fat while maintaining good practice on a day to day basis will ensure your voice does not go silent, and you don’t give an inch of space that lets your competitors sneak up on the outside.

And one final word of caution – choose your agency with care. A good agency will ride the waves with you, and exploit the tough times with cleverer, more creative solutions. Others’ silences will open up opportunities for you – make sure you take advantage!