Times of crisis and uncertainty often brings budgets front and centre, both professionally and personally. When businesses are fearful of their revenue declining, the first reaction is often to pause or cut back in various areas such as marketing or ad spend.

Short-term decisions to go dark on marketing can also put long-term revenue at risk as when promotion stops, awareness and potential sales can be lost. A study by the Institute of Practitioners found that when businesses reduced their marketing by 50% for a portion of time during a recession, it took them almost three years to recover the brand equity they forfeited to competitors. A great example of this is the 1990 – 1991 recession where Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.

When it comes to cutting expenses, marketing and advertising always seem to be at the top of the ‘non-essential’ list. According to a study by LinkedIn, 72% of marketers cite budget reductions as a top reason for pulling back digital marketing investments. Instead of immediately cutting marketing spend, businesses should view communications as an investment rather than an expense.

Here are a few suggestions on how you can manage your marketing budget during this pandemic and create a plan to ensure your business is ahead of the curve in the case of another economic slowdown.


How Do I Create Plan B?

Ideally, you’d build this plan before you need it as it’s useful to have options to start with that you made when you were in a more rational mindset.

Start by thinking about how you can make Plan A work with Plan B’s money as your situation or budget changes. This might include prioritising specific promotions, channels and holidays while allocating time to re-evaluate consumer behaviour and pivot the remainder of your strategy accordingly.

You can even use this time to look for opportunities and new ways to innovate which could be done by reviewing your products, services and operational activities. Check out how Melbourne business, Freshchoy, shifted their central offering to adapt to new markets during COVID-19, even going on to hire new staff despite soaring unemployment rates.

What About Our Situation Right Now?

If you need to live out your Plan B now, look at rewriting parts of your marketing strategy to accommodate for the world we’re now in. Look at the data you have available to do fewer things with the right amount of money, rather than stretching your budget to try do the same things with less money, which can also make it difficult to measure success and performance.

It’s important to remember that your targets and goals will also need to be adjusted.


I Still Need To Make Cuts, Where Do I Start?

We get it, sometimes budget cutting can’t be avoided and that’s okay!

Let goals and business objectives guide your decisions, using the Plan B you created as a foundation for what’s important. This original plan will help you remain strategic rather than reactive. For example, if your supply chain has been disrupted due to COVID-19 you may want to temporarily reduce ad spend to better match what you’re capable of producing.

Think about what decisions you can make that will give you the best result by conducting a channel analysis and prioritising spend on your most profitable channels. Don’t make cuts to places that impact your goals or where numbers are big, simply because they’re big.

During the late 1920’s, Kellogg’s and Post dominated the packaged cereal market. However, when the depression hit no one knew what would happen to consumer demand. Post predictably reined in expenses and cut back advertising while Kellogg’s doubled its ad budget, moved into radio advertising, and produced the new Rice Krispies. By 1933, Kellogg’s profits had risen almost 30% and they now continue to produce the much-loved Australian cereals we grew up with.

Another way to efficiently allocate work could be to choose free tools that help you automate responsibilities and do more with less. Automation technology can help you remove time and cost- wasting processes. You can find tools for every part of business from budgeting to analytics, check out our blog on Five Marketing Tools We Love to help you get started.


Remember that in a situation such as COVID-19, your competitors are in the same boat as you, so this presents an opportunity to capture additional market share as customers consider new options and brands.

If you would like to find new ways to adapt to the new normal or alter your marketing strategies to ensure you stay ahead of the curve, we’re offering free strategy health checks to all businesses. This no-obligation health check will include:

  • A review by one of our experienced consultants.
  • One page of recommendations to alter your marketing strategy to reflect the current environment and market.

Let’s do this together! Enquire by getting in touch with us at info@thinkcommunications.com.au