I am not pretending to be an expert in economics, but nearing 20 years as a business owner, I know the four core economic cycles of expansion, peak, contraction and trough. Economists continually debate where we are in these cycles and if we are close to a recession. But over the last 24 months or so, that can keep getting kicked down the road.
We do know, based on Federal Reserve reports, that there are bumps on this road: small but steady increases in unemployment, higher costs of living and food, and recent spikes in gas and oil prices. These bumps create uncertainty and a bit of cautionary stasis in both personal and business spending and investing.
From a business perspective, marketing spend has often trended down during times of uncertainty. And overall, there has been a downward trend since 2018. Gartner Research tracked U.S. marketing spend as a percentage of company revenue at 11.2% in 2018. It plummeted to 6.4% during the pandemic, rose back to 9.5% in 2022, and has been declining since and is now below 8%.
A marketing budget often seems to be the first to be cut during corporate belt-tightening. While companies may see a temporary reduction in expense, those cuts will be felt over time. One common analogy is treating it like maintaining a house or a car. Delaying certain upkeep and maintenance can save money short-term, but eventually a fix will be needed and may cost much more than the preventive maintenance that was skipped.
As a company deeply involved in integrated marketing, communications, and creative design, we see companies reduce ad spend, delay website upgrades, push off needed branding work, and generally pull back at times to “ride it out.” In actuality, we see this as an opportune time to address some core needs cost-efficiently – items you want to have “tuned up” and ready to roll.
These needs include conducting audits of your brand and your website functionality. Maybe that blog post from 2019 should be taken down or at least updated? How about the imagery that includes fashion trends from yesteryear? Other important tasks include crafting updated owned media and blogs. Your SEO/GEO strategy is constantly changing, and there are some amazing new tools that can create insights on how best to be found and seen. Reviewing your keywords and updating web copy is also time well spent, as is time reviewing new AI tools. Another often-neglected item is working on your core messaging and conducting some market testing.
With so much changing in terms of messaging and searchability these days, investing in these smaller tune-ups will help in the long term, as they are elements for properly managing a successful integrated marketing and communications strategy.
