Comments on: When Do You Cut Your Marketing Budget?

By: Autoseller Network

Autoseller Network — Sat, 06 Jun 2009 08:21:40 +0000

Whatever a marketing organization does with its budget during an economic meltdown, it must spend on optimizing its operation even in the worst of times.

By: Fred

Fred — Fri, 10 Apr 2009 03:29:45 +0000

Ah yes, If it were only that simple.

There are TWO different ways to look at this question. Naturally, companies that sell advertising and marketing always come up with the same conclusion. If the economic times are tough, then one should NOT cut advertising expenses. And if economic times are good, guest what? One should still STILL not cut advertising expenses. In other words, no matter how bad or good the economy, just keep buying advertising. Well, maybe yes and maybe no.

I understand the logic of no cutting advertising in tough times. But the flip side of this also has merit in certain situations. And Advertising companies are NEVER going to admit this.

For example, if the supply of customers has dramatically DECREASED for your entire industry, and you don’t cut your adversiting expense to some extent, then your advertising cost PER SALE may go through the ceiling, meaning that you now have to sell even MORE of your product in a tough market than you did in a good market just to break even. And if you can’t, then your NOI goes down even LOWER. Put your numbers on an Excel Worksheet and you may see what I mean.

Again this is more true in some industries than others. But it can be a statistical fact that advertising companies either don’t realize or for obvious reasons simply prefer not to mention.

By: RICHARD IDAHOR

RICHARD IDAHOR — Wed, 15 Oct 2008 19:57:32 +0000

I would recommend a cut in the marketing budget when your competitors are doing little or no marketing activities.You have to be really careful about creating awareness for the category you are playing in while your competitors sit back harness the benefits of the awareness you are creating while riding on your back.
If you are poineer in the category watch it or else your brand name can be commoditised.

By: Chris Brown

Chris Brown — Tue, 14 Oct 2008 11:41:17 +0000

Ellen:
I think that Word of Mouth is the backbone of a referral program and should not be discounted as a powerful marketing technique.

Thanks for adding to the conversation!
Chris

By: Ellen Weber

Ellen Weber — Thu, 09 Oct 2008 23:16:14 +0000

Chris, thanks for the interesting question, and an opportunity to weigh in:-).

We do sales and marketing a bit differently here in that we use word of mouth only to market. However, I like to think that marketing is more about the way a product can genuinely prosper a client – and that incentive should not change in tough times. In fact, the clients should even be more at the center then, since they too are likely feeling the tighter purse strings:-) Great post Chris!