Why You Shouldn't Cut Your Marketing Spend

Last night while driving I heard the following advertisement on the radio (it isn’t exactly verbatim, but you will get the gist…)

We would like to announce a change to tonights advertisement schedule. Due to the Global Financial Crisis, the intended advertiser has decided to cut their marketing budget, and therefore abandon this ad space. This ad space will now be occupied by their competitor

Or something like that. The point was, of course, to advertise radio ad space and to emphasise to marketers the importance of keeping your marketing spend up during a recession or financial crisis.

During a financial crisis, consumers, like companies, want to rationalise their spend. They want to cut back on consumption, or change brands to save money. The big revenue pie will shrink during these times, meaning everyone gets a smaller piece.

What makes this worse for businesses is if they also decide that this is the time to cut their marketing spend. In this case, not only has the pie decreased, but their proportion has decreased also, meaning that they are hit even harder than their competitors. Then, when the good times do come again, it is uncertain whether people will return to their old spending habits, or if by that time they will have become won over, and accustomed to their new brand.

This is even more pertinent for SEO spend. The reason being, that SEO is a long term strategy, it benefits early adopters. The cuts you make now, will influence your rankings many months from now. By cutting your spend today you are not only delaying your high rankings, but it isn’t like you can just switch it on later as soon as the economy has recovered. Once you increase your marketing spend in the future, THEN it will be months before the effects take place.

Meanwhile, your competitors may continue their SEO campaign, entrenching them at the top of the rankings, gaining market share, and making it difficult for you to knock them off the top spot in the future.

Despite this, many marketers will decide, or will be forced to, cut their marketing spend at this time. Since online marketing, and SEO in particular, is such a new area of marketing for Australian companies, it may feel the chop more than most (despite it being one of the most measurable of all advertising mediums).

This can work to the advantage of savvy marketers. By investing in SEO now, while others are cutting back, it could be easier for your site to make it to the top of the rankings, and increase your online market share.  This will hold you in good stead for the future, as high ranking sites, with sustainable SEO campaigns, are difficult to remove from the top spots.

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