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The Do’s and Don’ts of Budgeting for Marketing in a Recession

August 2, 2022 Vena Solutions  
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There’s nothing positive to say about a recession, right? 

We certainly wouldn’t be the ones to say there is. But with a possible recession coming around the corner, it’s not all doom and gloom either. Many businesses that started during a recession have thrived (Airbnb and Uber, to name a couple). And with the right strategy, your business can do more than just weather the storm too. You can come out ahead. 

But in some cases, your first instincts on how to do that may not be the right ones. 

Case in point: when the market declines, many businesses decide that cutting back on marketing is one of the best cost-saving measures at their disposal. But since marketing contributes heavily to your business growth, the wrong cuts can leave your business hurting—unable to bounce back quickly once the recession ends. 

So how can you deploy your marketing budget strategically to get the most return from your recession spending?

The History of Recession-Era Marketing

The first thing you need to know: continuing to invest in marketing and promotion during a recession can have positive effects on your business. And you don’t have to take our word for it—just take a look back at history.

During the Depression of 1920 to 1921, researchers Roland Vaile and Reavis Cox found that companies that increased their ad budgets drove more sales than their competitors—both during the crisis and after.

And during the 1981 to 1982 recession, the McGraw-Hill Research Laboratory of Advertising Performance found that B2B businesses that kept investing in marketing had “significantly higher sales growth” both during the recession and for three years after.

Unemployment Rates in September 2020Source: Marketing Tactics


And in a lot of ways, that makes sense. After all, spending doesn’t stop entirely during a recession—and your potential customers need a way to know you’re still thriving if they do have dollars to spend. And when a recession is over, the market often responds with a period of growth. To bounce back quickly and to take advantage, you want to be ready when it comes. If you’ve clearcutted your marketing budget, you won’t be.

So what should you be doing (and not be doing) as a recession looms? How can you make the necessary cuts while ensuring you have the marketing resources to maintain a growth position?

5 Do’s and Don’ts to Drive Your Marketing Budget

Funds are tight during a recession, so deploy your marketing budget strategically. And that means understanding your audience, the market and your place in it. Here are a few do’s and don’ts to get you started:

1. Do Understand Your Competition

By “understanding your competition” we mean not just knowing who they are—but analyzing how they’re responding to the recession themselves. Are they slowing down on advertising, slashing their marketing budget or cutting key talent? Have the slashes they’ve made inadvertently reduced their share of voice (SOV), made them less agile or reduced customer awareness of their products or services?

Those are all things you can use to your advantage as you make your own plans. Maybe it means hiring top talent that they’ve cut from their marketing team. Or it's upping your own advertising efforts to fill that gap in customer awareness to keep your product or service top of mind.

Whatever the case, you’ll put yourself in a stronger position both during and after the recession—all while your competitors are floundering to win back lost ground.

2. Do Recognize Your Customers’ Needs

Customers aren’t going to act in one homogenous way during a recession. And depending on the product or service you offer and the audience to whom you market, your customers might not respond in the same way as the customers of another company altogether. They may not even respond the same way they did during the last recession. 

Keeping track of your most current customer and sales data, then, will help you better understand who your current audience is to anticipate where to spend your dollars when marketing in a recession.

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3. Do Invest in Brand Awareness

Investing in building brand awareness during a recession might seem counterproductive. After all, what’s the use of getting your name out there when your customers are tightening their purse strings too?

But keeping your profile up by marketing in a recession will keep you top of mind. That way, when a potential customer is ready to make an investment—whether it’s now or once the recession is done—you’ll be the business they think of first. Knowing you’ve stayed strong during a crisis will also give them confidence that you have what it takes to go the distance.

4. Don’t Be Afraid to Launch a New Product

Sometimes, if you have a particularly innovative idea or one that fills a need, launching a new product or service during a recession—and investing in the marketing you need to get the word out—can be a good thing. For proof, just consider Twinkies, Scotch Tape and Kraft Miracle Whip—all first released during the Great Depression. 

What did these products have in common? They all filled a specific need: a cheap sweet treat, a quick fix that let things last a little longer and a cost-effective alternative to mayonnaise. But none of that mattered without a marketing budget to get the word out. Miracle Whip, for one, was launched with an extensive marketing and advertising campaign, showing again the power of recession-era marketing on building awareness that lasts long after the recession is over. 

5. Don’t Get Into a Technology Rut

We get it. With a possible recession looming, your instinct is to batten down the hatches. To make do with what you already have. And that’s likely true in the case of your tech stack as well. But spending on technology can add efficiencies to your marketing efforts, get you more visibility into your return on investment and help you improve the processes you already have in place. 

In other words, continuing with your digital transformation efforts and adding to the toolsets you already have will empower your team to make smarter cuts and improved investments, while getting more from the money you spend. All of which will help you not just during a recession—but for years and years to come.

Marketing in a Recession: Looking Past the Short Term

While a recession and all that comes with it can be a stress on all types of business, if you want to come out ahead you can’t be short-sighted. Staying aware of current market changes is imperative, but so is keeping an eye on the future and not letting go of your growth goals. By remaining proactive and agile, you’ll be ready not just for anything the market crisis throws at you, but you'll be prepared for when the recession ends as well.

But for that to happen, you can’t neglect your marketing budget. 

Instead, you need to look for new growth opportunities and continue investing in marketing in response. You’ll be in a better position if you do.

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