Three Reasons Marketing Is the First Budget Cut

Marketing budgets are often one of the first budgets cut, time and time again, yet marketers continue to claim companies are making unwise decisions. To support the case, you point to research and cases showing companies who invest in marketing during a downturn come out stronger.

Is the answer turning marketing into a profit center, as some have claimed? For a few companies, particularly those with a direct response marketing model, this might work. But it isn't the solution in most cases.

The truth is, most companies can temporarily reduce their marketing budget. Here's why.

1. Your Brand Equity Lives On

Awareness of your company, understanding of your solution and intent to purchase your goods or services don't just drop to zero, even if you stop ALL marketing.

When marketing budgets are cut, a cumulative benefit from your years of marketing remains.

2. Your Marketing Infrastructure Still Works

Assuming your infrastructure has been maintained over time, your current email solution, marketing automation implementation, community platform and so on are still working.

If you have been putting off much needed investments for years and still have a computer in the back corner running Internet Explorer 5 just to use your outdated tools, all the duct tape fixes may finally disintegrate, but most marketing infrastructure doesn't need a major overhaul right now just to continue functioning.

Similarly, investments in rebranding or a brand new website can often be delayed as well.

3. Competitive Investments Are a Key Factor

If marketing budgets are being cut back because the economy or a specific sector is struggling, the case is even easier. Marketing is in part a relative activity; when a category cuts marketing spending overall, a reduced investment can deliver the same share of voice in the category.

However, unless other changes dramatically improve the cost effectiveness of your marketing, a reduced marketing budget will take its toll over time.

Your Turn

Hopefully this presents a clear case, but if you are in marketing you likely still disagree. So rather than pointing out the benefits of investing in marketing during a downturn, share your solution: when businesses have already cut out the fat and need to further reduce expenses, where should they look?

Share your suggestion in the comments below or with me on Twitter (@wittlake).

Photo Credit: jDevaun cc