Should you cut your budget in bad economic times?

The basic instinct is to reduce or stop spending to survive, but is it really the best strategy?

By Wadih Antoun

About 2 min read . Nov 13, 2019Strategy & Consultancy

Lebanon revolts. It’s brought hope for a better country, but also with it… concern.

A number of our clients have had the same expected reaction the past couple of weeks: budget cuts. And although we always knew this in theory (read more here and here), it was nice to see proof of the following: clients who have continued advertising during this period registered very good performance. Here are 4 examples of client campaigns that actually continued running online throughout the month of October 2019.

Example #1 - Website Visitors - Awareness Campaign with Form Sign-ups

Graph #1

Example #2 - Website Visitors - Website Traffic Objective

Graph #2

Example #3 - Website Visitors - Online Store

Graph #3

Example #4 - Website Visitors - Online Purchases

Graph #4

As most brands have stopped advertising in Lebanon, the ones we had that continued to advertise saw a decrease in their cost and an increase in results.

It becomes clear that businesses that cut marketing spending in such time will not only lose in sales but in brand value overall.

They will even clear the way for other brands to come and sweep away their potential share.

It’s further proof that businesses that continue or even increase advertising during bad times, as competitors are cutting back, can improve both their market share and return on investment at a lower cost than during good economic times. There’s less competition for attention, more people are online checking news and so more visibility.

So yes, times are tough but brands should be tougher and do their best to survive these times (i.e. don’t lay low). It’s also worth noting that brands should be compassionate to what is happening and making sure this is also factored in their communications otherwise the added visibility can back-fire.

Wondering what happened to those who stopped advertising?

Example #1 - Website Visitors: Budget Cut

Graph #5

Example #2 - Website Visitors: Budget Stop

Graph #6

They got no results.

Kind of makes you think, do we make economic situations worse ourselves?

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