Yeah, you read that right. And no, we haven’t lost our minds.
You, a healthy skeptic: We can see this obvious attempt to salvage revenue from a mile away. Nice try.
Us: That’s what we would have guessed, too, if we were in your shoes. But no.
The world economy is stuttering. Trade wars, geopolitical instability and natural market cycles have combined to take certainty away from international commerce. C-suites and shareholders are predictably twitchy.
When leaders cut costs to weather the storm, marketing is always on the chopping block. But we urge manufacturers to fight the popular impulse to pull back. In today’s uncertainty lies a compelling opportunity.
To see it, you just have to open your eyes a little wider.
Uncertainty breeds reactionary decision making
Macroeconomic indicators started painting a worrying picture last year. The U.S. Treasury Bonds yield curve inverted. Manufacturing indices dipped into negative territory. Decreased freight volumes proved fewer buyers were buying stuff.
As a result, many firms started missing their revenue and profit targets. Some are straight up losing money. When the C-suite searches for costs to cut, nothing is sacred—especially not marketing.
You might be seeing some of these marketing-specific impacts:
- Overall marketing activity or output is reduced
- Strategy shifts to prioritize quick wins over long-term success
- Marketing teams are cut to the bone, with skeleton crews playing defense instead of offense
You, a healthy skeptic: The numbers don’t lie. We wouldn’t do this if we didn’t have to.
Us: But you don’t have to.
The impacts above are evidence that company leaders believe marketing is an expense and not an investment.
But strategic, long-term marketing plans are investments that position firms for stronger, more sustainable growth. It’s a fact, full stop. Changing trade winds do not make it less so.
That’s why we encourage you to think critically about whether the reactionary abandonment of long-term strategy is really a good idea.
Recognizing the opportunity
Many factors inform the recommendations marketing strategists make, and chief among them is how difficult or easy it is to achieve a desired impact.
It’s basic cost-benefit analysis, and while executives respond to today’s economic uncertainty with nervous retrenchment, we see an equal and opposite side effect: A relative rise in the value of your marketing spend.
You, a healthy skeptic: Are you saying we could get more for our money?
Us: Exactly. Like bringing a sack full of Euros to the U.S.
Applied appropriately, your marketing expenditure creates awareness, fosters engagement and builds loyalty among your target buyers, all resulting in a return on that investment.
The problem is that you’re not the only one clamoring for your audience’s finite attention. In crowded and competitive markets, it takes more and more effort and expense to maintain the foothold you’ve earned. The cost of a static good—awareness, engagement and loyalty—rises.
But what if the yield curve inverts, trade wars flare up and markets cycle down? Most decision makers see storm clouds gathering, pack up the picnic and head for shelter.
What if you didn’t? What if you stayed put?
You, a healthy skeptic: Why would we spend big on marketing when no one’s buying? We could light that money on fire and at least we’d be warm.
Us: The side effects of marketing nearsightedness cause more problems than they solve.
Firms seem unable to cope with the shock of negative growth and do their best impressions of hermit crabs when danger comes close.
And I don’t mean to downplay the danger. Changing circumstances often require changes in tactics.
But unless your firm is fiscally overextended or lacking true differentiators, weak markets aren’t the end of the world. They’re normal, healthy phenomena most folks plan for in advance.
And given that your competitors will probably scale back their marketing activity, weak markets are also a lot less saturated with competing messages.
There lies a compelling opportunity within this dynamic for those willing to stick their necks out.
Making the case for sustained marketing investment
You, a healthy skeptic: Something’s getting cut. If not marketing, then what?
Us: Find something that you can show doesn’t result in a return on investment or for which a supposed positive return is impossible to empirically determine.
And if you’re about to make that argument to the higher-ups, you’re going to need data. Start by learning more about measuring marketing success. Then, download and complete our Marketing KPI Worksheet.
You said it yourself earlier, the numbers don’t lie.
What’s next? Answer these 3 questions
- Are you willing to sacrifice hard-won progress for the sake of meeting short-term cost reduction benchmarks that serve no other purpose?
- Do you agree with the premise that weakened economies make marketing expenditures more valuable?
- Can your firm weather near-term slowdowns and remain committed to marketing toward stable, long-term growth?
Our argument, essentially, is this: When business is slow, you can buy awareness, engagement and loyalty among your audience at a discount.
We’re not delusional, just different. If you agree with our argument, you’re different too—and that’s why we should talk.