Why you should not cut your advertising and marketing budget in times of crisis

Every recession is a difficult time for companies. In Germany, the coronavirus crisis could even lead to a 6.5% drop in gross domestic product. This in turn leads to a reduction in spending, which often means that marketing and advertising budgets are the first to suffer. But this is a mistake. MiQ provides five arguments as to why now is the time to continue promoting your brand:

1. It's a simple equation: if your competitors put on the brakes when it comes to marketing and advertising, this increases your chances of making your own company heard. Especially as brand awareness among consumers drops by 39 percent after just six months of inactivity. So seize the opportunity and fill the gap with your own content.
2. With the help of programmatic, social and search advertising, you have long been able to address your users individually and divide them into groups. Reluctant shoppers are most likely to jump at the chance to save money, while particularly affluent customers can also be reached with advertising for a new car. The corona-induced recession is the first of its kind in which we can take countermeasures with such user data. And this allows us to optimize advertising budgets so that we always reach the right target group.
3. Economic crises, recessions and pandemics create one thing in particular for many people: a feeling of uncertainty. By maintaining your brand presence in these times, you counteract this feeling. You show that you are still here, that you are carrying on and that the world is by no means standing still. What's more, depending on the focus of your campaigns, you can even create a more positive mood among people.
4. During the first lockdown, most people spent more time at home in front of the TV, computer or smartphone. As a result, it was also easier to reach them with online advertising. Although social life is now gradually returning to normal, this factor should not be underestimated. After all, major events and festivities are still largely canceled.
5. Last but not least, a look at the past proves that advertising in times of crisis really does pay off. Pizza Hut and Taco Bell were able to increase their sales by 61 and 40 percent respectively during the recession in the early 1990s. Both companies continued to advertise, while competitor McDonald's acted more defensively. And after the financial crisis, Amazon saw a 28 percent increase in sales in 2009 after advertising its new Kindle products.

"Our data shows that many advertisers are cutting media spend across all channels during an economic downturn," says Rebecca Rosborough, CMO at MiQ. "However, the data also shows that increasing marketing spend during these cycles can pay dividends. Namely in the form of increasing market share and sales. The conclusion is clear: if you are in a position to continue spending money on advertising, now is the best time to do so."