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Marketing In A Recession

Why Marketing in a Recession is Important

Marketing in a recession can be difficult, but it is well worth the effort to retain your marketing budget. Individuals and businesses are constantly looking for ways to save money and reduce their spending, especially during a recession. The decisions made during this time are crucial for the future of companies, both large and small, and they want to ensure they are neither over-cutting nor under-cutting costs. Over-cutting can hinder the company’s ability to grow in the future, while being reluctant to cut costs means the company might not survive. 

During these discussions about where and how costs can be cut, most companies flirt with, among other things, reducing the money they’re allocating to digital marketing in order to counteract the revenue they are losing. However, cutting your marketing in a recession might make what’s already a difficult circumstance even more challenging. While scaling down your digital marketing efforts will save money, digital marketing drives a lot of traffic to your website and provides you with a lot of prospects and leads that are further down the conversion funnel. It can also negatively affect your market position, something you’ve likely put a lot of hard work into getting and maintaining.

Digital Marketing Budget During Recessions

Although it’s certainly wise to look for where you can reduce spending during a recession, you should look to do the bulk of your cost-cutting elsewhere. In fact, research from the International Journal of Research in Marketing shows that companies that did not drastically reduce their spending on marketing performed better than those which did not. What these companies that didn’t cut their marketing spending did do was change what they were spending this money on to better reflect the reality they, other businesses, and consumers were facing. The research identifies this approach as “proactive marketing.” Here, we’ll be examining the different categories of marketing costs and discussing how this “proactive marketing” approach might apply to each.

R&D and New Product Launches

Regardless of the economic circumstances, launching a new product is always risky. During a recession, delaying the launch of a new product seems like the obvious thing to do, but is it? A paper from the Marketing Science Institute says otherwise. Using data from the US automotive industry from 1945-2008, investigators found that products launched during a recession actually had higher sales revenue and higher long-term survival chances. This is likely because there are fewer new products on the market to compete with, as other companies opted to postpone their launch.

Prices and Promotions

Raising prices during a recession might seem like an easy way to maintain revenue and good margins, but it’s rarely that simple. Consumers are more price-sensitive and selective with their spending during tough times, meaning a price increase will often reduce the likelihood of converting a lead even more. When companies realize this mistake, many run price promotions and end up having to spend a lot of their marketing budget marketing the reduced price. Going back and forth like this can backfire tremendously, losing a company valuable market share and eating into both their revenue and margins when everything could have been avoided by simply keeping prices the same.


Digital marketing provides companies with a variety of different communication channels that can be used to identify, build, and target audiences. With most other companies cutting back on their marketing budgets, a company that maintains its advertising budget can reach more consumers with its message.

Despite research that shows how important marketing in a recession is, many companies opt to dramatically reduce their digital marketing budgets. Therein lies another benefit of maintaining your digital marketing efforts during a recession – less competition. When your competitors are relaxing and pulling back, it’s a prime opportunity to move ahead. Maintaining your advertising budget and adapting to the changing consumer behavior and context rather than scaling it back can help you further distance yourself from your competitors that were already behind you and catch up, and even surpass, those that were ahead of you before.

SocialSEO an Intero Digital Company is here to help! Give us a call to see what your specific needs are during this year’s recession. We’d be glad to help!

SocialSEO Team