Don't Cut the Budget, Just Change It!

Often times during tough financial times, companies feel like they should cut some unnecessary spending. And more often than not, the marketing department is the first area to get budget cuts. Various studies over the years, however - like the ones featured on the Financial Times website, prove that marketing is beneficial and even crucial, in times of recession.




According to one study featured on Financial Times, Kellogg's maintained its marketing spending during the 1930s depression, while Post did not. Kellogg then dominated the dry cereal market for the next half-century. As shown in a McKinsey & Company report, the companies who increased their spending in a recession were the only ones whose profits rose substantially when the economy recovered.

The companies that kept their marketing budget in tact, or increase them, were able to keep their voice heard, thus allowing consumers to stay familiar with their brand. And by keeping or increasing their marketing budget, these companies were able to increase market share and profitability over time, ultimately making their companies stronger players than the companies that decreased or eliminated their marketing spending.