Making marketing investments in a recession – some facts!

It’s a truism that marketing costs are frequently the first to be cut in a recession. We’ve often thought that this was a reflection on the quality of marketing being performed within organisations - that in these businesses marketing has become detached from its primary purposes of innovation, driving profitable growth and acquiring customers.

This week, we’ve literally just completed a piece of live communication with a series of road shows for a leader in the Food Service industry.

We thought that we’d share some interesting insights from their Finance Director on marketing expenditure in a recession. This information carries some substantial weight as his company’s brands feature in 8 out of 10 of the UK’s domestic refrigerators

He had two key headlines based on his own, recent experience:

1. Investing during a recession helps you emerge from the recession in a stronger position

2. Brands should continue to invest in advertising during a recession

Studies from past recessions have shown that companies who sustain investment during recessions are better positioned when the economy recovers. Brand owners need to look on recession as an opportunity to reposition their brands for growth in the long term. Here’s some research from McGraw Hill:


Brands should continue to invest in advertising during a recession

The Finance Director is persuaded that communicating with consumers during the current turmoil is more important than ever to maintain brand loyalty and faith.

The board decided to focus their increased investments in their leading brands and not on their second tier brands, investing more in above the line advertising, especially TV, to put disproportionately more focus on product innovation and lastly to adapt messages to reinforce core associations (for example, in this case – British-ness).

Interestingly, by following this strategy they can testify to their top brands growing at 4.5% in a grocery market that is growing at 3.8%.

This organisation invests substantially in innovation and it shows. The Finance Director is usually the first to favour marketing cuts. Marketing deeply integrated within all aspects of its culture drives the spectacular success of our client’s business. Marketing is never a dispensable luxury except in those businesses that are doing it wrong.

Marc Balhetchet