Many businesses have decided to cut marketing and advertising budgets given economic uncertainties. Although this can bring temporary financial relief, there are major risks associated with this decision long-term.
Business Wire posted an article earlier this year revealing the biggest challenges facing CMOs’ and senior marketing executives’ programs in 2023:
- Measuring marketing performance (31%)
- Economic uncertainty (30%)
- Driving qualified leads/sales (25%)
- Support from leadership (12%)
This same article also articulates which investment areas have the highest ROI:
- Public relations + social media (69%)
- Content marketing (49%)
- Video marketing (39%)
2/3 of the list above are visual mediums (if you don’t count social media), which in and of itself speaks volumes to why choosing to not cut spending in these areas is so important.
At Marika Creative, we tell every single client and prospect from the first conversation we have together that the content and media they produce is the figurative handshake between them and their potential customers. Aesthetics, clear messaging, a great brand presence, if not cohesive and quality, become a barrier to entry and diminish trustworthiness. Customers can’t be doubting you and what you’re all about, because there will always be someone else to purchase from.
The competitive opportunities of continuing to spend money on brand and media despite financial uncertainty are abundant. Brands who choose to push through financial insecurity are able to take the competitive edge because:
- If your competitor cuts ad spend and you don't, your audience will see your brand
- If you're consistently pushing out TikToks and Reels, engaging with content from others, etc., you're continuing to build relationships with your audience and you stay relevant.
Unfortunately, in an over saturated DTC landscape, no one cares that your product might be better than someone else's. Your customers care about how you improve their lives, how you make them feel, what your values are. You have to prevent doubt in a consumer's mind and continue to invite them into your narrative. Investing in brand and content is how you do this well and consistently.
Regardless of the concern or the challenge that's top of mind for your marketing team, a cohesive, outward facing brand, is in our opinion, the bare minimum, and the first step to ensuring diminished challenges and long-term success.
At the end of the day, a business can't succeed without investments of time, energy, and cash and it's up to the decision makers to distribute those resources accordingly. If you choose to cut spending on advertising and content development costs, then that will require more time and energy devoted to managing less skilled, but more affordable creators, figuring out how to get brand awareness organically, or extending the workload of an already stretched team. Remember, you can't have wagyu on a McDonald's budget - and actually, the reality of that is okay!
Creative assets are more valuable today than ever before,
and while cutting budgets brings temporary relief, the results of cutting these costs will be much more detrimental to a business in the long run than overcoming the insecurity of spending the money today. We often see brands justifying creators, agency partners, and freelancers away, nickel and dime-ing over the value of the assets, or treating the creative professionals as expendable when they should be invaluable.
There are always was to get creative with budgets and your partners in times of financial uncertainty as long as everyone feels valued! Creative partners want to feel respected and in sync with you and your needs, so it's just important to communicate openly, do the best with what you can as a brand, and be truly realistic about what does and doesn't move the needle for your bottom line.