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Beat the Recession with an Aggressive, Strategic Marketing Budget

Strategic Marketing Budget

Author: Amanda Stock

In a recession, marketing tends to be the first victim of budget cuts when, in reality, it is the most important tool a business has during this difficult time. With the current economic downturn experts are predicting a recession. This leaves many businesses wondering where they can cut costs. Studies and experience prove marketing should be last on the list.

In 1979, Meldrum & Fewsmith conducted a series of studies analyzing the way companies marketed themselves during the two year recession from 1974 to 1975. The studies concluded that “companies which did not cut advertising expenditures during the recession years (1974-1975) experienced higher sales and net income during those two years and the two years following than companies which cut ad budgets in either or both recession years” (emphasis added). In addition, Senior Vice President of Meldrum & Fewsmith said, “I have yet to see any study that proves timidity is the route to success. Studies consistently have proven that companies that have the intelligence and guts to maintain or increase their overall marketing and advertising efforts in times of business downturns will get the edge on their timid competitors.”

MarketSense studied the recession from 1989 to 1991. They surveyed 101 name brands. Kraft salad dressings and Jiff peanut butter both raised marketing budgets during this recession and increase sales by 70% and 57%, respectively. With increased budgets, Pizza Hut increased sales by 61% and Taco Bell increased sales by 40%.

So, in order to survive a recession, as a business owner you need to take 3 steps.

Step 1: Understand the value in marketing and do it consistently.

Since marketing is an essential function to any business it is also lifeline to surviving a recession. Through marketing, a business can reach new customers and gain sales from previous customers. Therefore, marketing is an investment not just an expense.

Step 2: Have the guts to be more aggressive during hard times.

Being aggressive does not mean throwing money at every marketing outlet available. It is important to take a strategic approach and spend more but spend wisely. It does take guts to spend more when the outlook is gloomy but it has been proven to pay off.

Step 3: Organize budget and resources strategically.

Below are tips to help you spend smarter.


Research is the number one way to ensure marketing dollars are spent wisely. Online marketing requires two levels of research on a regular basis, competition and consumer. Through research you can determine which marketing outlets can be most successful. Start by asking yourself these questions:

  • What are potential customers searching for?
  • What websites are they using to find your products or services?
  • How is your competition reaching those customers?
  • What is your competition doing better than you are?


If you are inexperienced in marketing or if you are looking to reduce fixed expenses it is best to outsource marketing to someone who is strategic, creative, and has proven results. By outsourcing you are changing a fixed expense into a variable expense. You also gain the outside knowledge of a specialist.

Key Tip: Ask if there is any leg work you can do yourself to save money. For example, tackling an SEO campaign often requires content writing. If hiring an SEO firm, ask to create your own content and have them optimize it. But remember, don’t commit to work you know you don’t have the time to do. It will only delay the positive outcome.

Closely Measure Results to Determine What Works

Measurable results are also a key component during hard times. Sorry magazines and print, but if you don’t offer reporting and tracking (call tracking, coupon tracking, etc) your ad budget will likely be the first reallocation that advertisers should be made. Find out what works by measuring each marketing tactic. Search Marketing is the most measurable form of marketing. When combining web analytics with tactics such as SEO and PPC, you are able to target your campaigns on a very granular level. This ensures each dollar is spent effectively. After measuring the effectiveness of your marketing campaigns you will understand what works best for your business. You can then concentrate marketing dollars on that 20% of your marketing campaign which produces 80% of the results.

Diversify Marketing Spend

It is also important to take a strategic approach when you diversify your marketing budget. For example, if you are currently investing the majority of your marketing efforts in a Pay-Per-Click campaign, you may want to allocated half of that budget to an SEO campaign which, in the long term, can increase the return on investment and decrease dependency on paid search.

Key Tips: Advertisers with a solid PPC track-record have an incredible advantage for venturing into organic search (SEO) because the PPC data such as which keywords converted best and which led to the highest volume of sales or average ticket price can now be a major factor in prioritizing the SEO targets. Since SEO is long term you want to be absolutely sure you’re targeting the right keywords long before you reach the first page for them.

Below is a chart compiled by Forester Research (2008) based on a poll asking: “Assuming that the economy is in a recession in the next six months, how would you change your investment in the following marketing channels?”. This study poll interactive marketers with 200 employees or more.

Key Tip: Don’t rule out marketing efforts which promote your brand but do not necessarily lead to a sale immediately. Brand Advertising, such as Display Ads, is a key marketing strategy which will help your business in long run. A hybrid of traditional brand advertising can be using a pay per click display ad program such as Google’s AdWords. Clever creative can attract eyeballs and garner recognition while also enticing clicks from the right audience.

Focus on Improving Conversions

Increasing conversions is one step closer to increasing sales. Typically, increasing conversion rates from 1% to say 2% is much easier than doubling your traffic. If you are ready to invest in any significant marketing initiative the first thing to evaluate is whether or not your site is maximizing conversions. Get an expert to analyze and optimize all conversion pathways. That is – ensure it is easy for people to contact you or proceed through your online store and checkout system, remove possible hang ups or bugs in the system, and answer all questions up front.

Use these guidelines so that your business can weather the storm of a recession and come out on top. Remember, those companies that make it through tend to experience a significant upturn in revenue and growth as there will be fewer options remaining for customers to choose from.

If you’re interested in seeing how your marketing budget can be optimized, give us a call or let us call you.

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