Why Cutting Your Marketing Budgets or Teams During a Recession Will Actually Hurt Your Bottom Line.

Why Cutting Your Marketing Budgets or Teams During a Recession Will Actually Hurt Your Bottom Line.

It seems I can’t open my computer without being bombarded with articles telling me why I should be scared about a looming recession in 2023. Inflation, war affecting global economies, and interest rate hikes are usually the reasons that roll off the tongue of the economists interviewed. As a marketing professional, these articles can be scary because of what talk of ‘recession’ usually means for Marketing Teams- budget & personnel cuts.

Marketers hold their collective breath when times get tough for companies, and belts need to be tightened because we know that the first budgets to hit the chopping block usually belong to the Marketing Department. Worse, when layoffs happen, marketing staff is usually on the list to be downsized and seen as a quick and expendable way to save money. But why? There are many reasons, most of which stem from decision makers that don’t understand the value that marketing brings – some of it tangible but some of it not quantifiable in normal terms. Leadership often views Marketing as a cost center rather than a profit center. Usually, when marketing is asked to prove its value (which we are asked a lot), it is in terms of leads and revenue generated, but the other important roles that marketing takes on, like brand building, awareness, nurturing, customer retention, reputation management and more are not as easily quantifiable despite their big impact on financial outcomes.

Decision-makers sometimes fail to see that marketing is not an expense but an investment in growth. Stop the spending; stop the growth trajectory. When the economy recovers, rebuilding and making up for the lost time becomes tough.

Leaders who view marketing as a necessary investment instead of a short-term savings opportunity and maintain or grow their marketing teams during recessionary periods statistically end up coming out on the other side much better off than their counterparts. So, let’s talk about data.

A research study done by McGraw-Hill1 looked at 600 companies between 1980-1985 and found that companies that maintained their marketing spends during the recession had a 256% higher sales growth than those that stopped advertising. Similarly,  research published in the Journal of Strategic Marketing in 2011 used modified meta-analysis to demonstrate that marketing can be significantly more important during a recession than at any other time. Their data suggests that companies that curtail their marketing expenditure jeopardize future sales and profits and take longer to recover from recessions than those that keep up spending.2

It is appropriate to reevaluate and spend in the places that make the most sense during a recession. It’s critical to understand that a recession changes the dynamic of your consumers, but marketers are used to using data to drive decisions and cut ties quickly with campaigns that aren’t working. Trust your teams to do what they do, and your company will fare better for it.


2. Lisa O’Malley, Vicky Story & Vicky O’Sullivan (2011) Marketing in a recession: retrench or invest?, Journal of Strategic Marketing, 19:3, 285-310, DOI: 10.1080/0965254X.2011.581386  

Marketing as Altruistic Problem Solving for Clients

Marketing as Altruistic Problem Solving for Clients

There’s a phrase I like that summarizes the way I think about advertising in regards to generating sales and solving business problems: The best way to kill a bad business is good advertising. It may seem counterintuitive but it’s true: what we do as advertisers never provides a single silver bullet or cure-all that can fix the problems that may be inherent to a company’s product or services. Advertising is often a major ingredient, but not necessarily the total solution because if effective advertising drives people to your business and the experience is not what they were promised, those leads are very likely to dry up and eventually disappear. 

When looking at a sales funnel, it’s important to take a step back as a business owner and be hyper-focused on filling the holes that are inevitably there, whether they be in the product itself, customer service, the customer experience, website, sales strategy, or anywhere else. Your sales funnel doesn’t have to be perfect, but the more holes you can plug within the funnel the better your results will be.  Advertising’s main purpose is to fill the funnel (yes, it helps the funnel in other ways, but awareness is its primary objective.) When you combine a more “watertight” funnel with a good method of filling it, you always end up with better results. 

Marketing and advertising are critical resources no matter what the business is. But they will only be one part of a reason that a company has success and never the sole reason. Think of it this way: the sales funnel is the engine in a car. Marketing & advertising are just one piece and if one piece is broken, the rest of the engine won’t function properly.

If there are issues within the sales funnel, spending more on advertising won’t solve a client’s problem. In fact, any good advertiser should refuse to increase ad budget if that money could be used to address costly holes in a company’s product, service, or process. Advertisers should be invested in the long game: if the money that would have gone to ad spend can be used instead to increase the client’s overall revenue, the client’s expenses won’t go up and they’ll solve critical problems. Once the problem is solved, additional attention may then be paid to advertising. 

Bottom line: advertising and marketing give you opportunities but it does not create success on their own. What you do for other people is baked into the fabric of your company and when you approach issues from a problem-solving perspective and develop products & services of a certain quality, marketing, and advertising open doors.

As advertising professionals, it’s morally right for us to share ideas and be frank with our clients about the issues that we see within the other components of the sales funnel. I refer to this as kind boldness. Even if those ideas don’t see an immediate profit for the advertising agency, everything works holistically. Sometimes, it’s about problem-solving alone. It’s also more enjoyable and easier to keep clients that you have these organic relationships with because insights and well-executed strategy make clients happy and feel like you are in their corner. 

At Ethic Advertising Agency, we believe that what we do is a vital, important service. We make trust and relationships the center of our approach to our partnership. We like to serve as an extension of our clients’ teams because when we are collaborating, we’re matching the DNA of the organization and that drives better results.  This often means, talking about solutions we don’t provide, and guiding companies to make what we believe is the best business decision even if it means they don’t use our services..yet…

This approach is inherent to our company’s identity. Often, we will take the time to do initial conversations without a fee because, while there isn’t always a financial benefit, there is a lot of value in helping and creating relationships. This is part of our culture and our own marketing strategy. We view our work not just as profitable but also as purposeful. It turns out, there are a lot of opportunities out there when you don’t expect anything in return.

When you put yourself out there as a giving thought leader, you make yourself a magnet and the more magnetized you are, the more opportunities you may have. The agency and its team have to open themselves up to those possibilities because it strengthens the business. This only works if you truly expect nothing in return and treat those situations as a pure gift, because the potential clients are giving you their time, and time is the most precious thing that we have. 

The time that you invest in these relationships may not be immediately profitable, but people are very willing to revisit your organization when they finally do have the budget and structure for advertising or if they can refer you to someone they know looking for the services that you provide. When you have that giving mentality and can provide the work and results to back up your altruistic attitude, success will come in one form or another. 

About Jeff Swartz

Jeff Swartz
Jeff Swartz

Jeff Swartz is the CEO and founder of Ethic Advertising Agency in Pittsburgh, Pennsylvania. Ethic is a hyper-targeted digital advertising and creative agency that specializes in video, animation, graphic design, and audio production. Digitally, Ethic also specializes in hyper-targeted programmatic (display, OTT, video pre-roll, digital audio), search engine marketing/pay per click, paid social media advertising, Google Grants, and native. 

Ethic’s mission is to be a catalyst for happy, profitable partnerships through advertising and creative solutions. They also bring a holistic strategic approach to the table and still recommend and buy traditional advertising mediums when appropriate. It’s all about doing the right thing for their clients.

Follow Ethic on LinkedIn here.

Content Marketing as Teaching Instead of Selling at Root and Branch

Content Marketing as Teaching Instead of Selling at Root and Branch

AMA Pittsburgh’s Guest Author series asks a simple question: how do you or your organization use marketing to create success with your business?

October’s Featured Author:

Zack Duncan
Root & Branch Group

Hi there! I’m Zack Duncan. As the owner and sole full-time employee of a small digital marketing company, I have no excuse not to market my business.

But I’ve generally been terrible at it for the majority of the 5 years that I’ve had Root and Branch Group.

It’s only been over the past year or so that I’ve actually gotten serious about our marketing. There always seemed to be more pressing priorities with client work, and it was hard to carve out the time. Plus, it didn’t sound really fun to me.

So, what changed?

My mindset changed.

I don’t like “selling” but I do enjoy teaching. I’ve been an instructor at Pitt for several years, and it’s been an amazing gift to get to teach students who are interested in learning. I’ve borrowed that same approach to marketing for Root and Branch. So now, instead of thinking about marketing as pitching consulting and training services for things like SEO, Google Analytics, and digital strategy, I create instructional content and share it online.

What were the results?

As you can see in the screenshot below from Google Analytics, traffic to the Root and Branch website from organic search (SEO) began to increase in late 2020 after I started getting serious about training content.

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In August of 2021 compared to 2020, organic search traffic is up over 1,000% from about 7 – 8 visits a day to over 100 visits a day. These visitors are almost all finding Root and Branch because they are looking for a specific marketing problem that I’ve created (SEO-optimized) content to help answer. Some of these people will be fine figuring it out on their own after reading the article, but some others will want to connect for a paid training or consulting arrangement to learn more.

What do I do specifically for this content marketing?

I create blog content on the Root and Branch website once or twice a month. Each blog provides answers to questions my audience is looking to address and links to other related content. How do I know what people are looking for? That’s part of the SEO “keyword research” process and there are tools available like Moz, Ahrefs, Google Trends, and more to help. So, if I identity “how much does Local SEO cost in 2021?” as a high opportunity keyword, I’ll create content that answers the question. The same thing goes for more exploratory topics like the similarities and differences between the legacy version of Google Analytics (Universal Analytics) compared to the new Google Analytics 4

Once a month I will also review the performance of preexisting content and see if there are new search trends that I can borrow to refresh the content. Google Search Console is the perfect tool for this job. Refreshing older content makes it more useful to readers and also improves the value (and the rank!) in the eyes of Google.

Depending on the topic, I might also create a short instructional video to explain a concept like on-page SEO optimization or to provide a walkthrough of how to set up a platform like Google Analytics. As the second biggest search engine in the world, this YouTube content will also be found by people looking to get their questions answered.

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It’s been slower to grow on YouTube, but the channel is up to ~900 or so views per month and 25 – 30 hours of watch time.

Mostly, it’s just been fun and I’m looking forward to seeing where it might go.

About Zack

Zack is the Digital Marketing Executive in Residence at the University of Pittsburgh and the President of Root and Branch Group. He provides SEO and analytics coaching for companies and directly manages monthly retainer clients in paid search, SEO, and analytics.

He’s a big fan of the local Pittsburgh beer scene and would be equally happy to talk about Dancing Gnome vs. Grist House as he would be to chat about on-page SEO vs. National SEO. You can connect with him on LinkedIn here

And if you’re interested in digital marketing tips and perspectives, you can follow Root and Branch on Linked In or subscribe to the Root and Branch YouTube channel.

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