By Raymond Schwartz III, 
During every recession, everyone cuts down marketing.
I jack up advertising spending and win the market.
During boom periods CMOs take over and businesses play on offense. They focus on growth.
During recessions, CFOs take over and businesses play on defense. They start to cut costs.
When finance people smell a recession, the first thing they cut is marketing.
Why? Marketing is generally the easiest thing to cut. It makes CFOs feel like they’re making instant impact on profitability.
This chart illustrates how businesses manage ad spend in the face of recessions. In 2009, the global economic pullback was just -0.7%. But Advertising Spend dropped a whopping 10.1%.
Conversely, this Gartner study debunks how some leading businesses accelerated during the recession.
The most “Efficient Growth” companies maintained or increased their marketing spending during the recession. And broke away as winners.
Reason 1. Ads become cheaper during this time.
Facebook and Google Ads are free marketplaces. There are billions of dollars competing for the same finite eyeballs ready to pay $1, $2, $5, or $10 per click. In boom periods people with the most money outcompete other bidders.
During recessions, marketing spends dry up and you get access to millions of eyeballs at a discount.
Dollar for dollar, recessions are the most efficient periods to invest in ads. The key is to use those dollars effectively and adjust the messaging with the times.
2020 – Everyone sees your face on the Zoom call. So market earrings!
2022 – People have less disposable income, but a big minority is still flush with cash. So our advertising makes our entry price points lower, and top price points higher to capture both sides of the market.
Reason 2. Ads become more effective.
When competitors cut marketing, they stop reminding their customers about their existence.
This is exactly when you want to figure out how to do more marketing, not less. Because your share of the voice goes way up.
Say a customer was seeing 30 minutes of cookie ads in total- 10 minutes each from You and 2 other competitors. When your competitors drop their spend by 50%, the customer sees 10 minutes of ads from You and 5 minutes each from 2 businesses.
Not only is that ad spot cheaper, but in the absence of competition, it’s also more memorable.
Before: 10 out of 30 minutes = 33% of the share of voice. After: 10 out of 20 minutes = 50% of the share of voice. Roughly 1.5X the attention for NO EXTRA COST.
Harvard Business Review covered several cases, here’s one:
Implement Sylo to cut acquisition costs by an additional 30%+
- Less Competition. Lower Cost. More Leads.
- Implement Sylo’s Identify.ai to generate 5-7x more leads.
- Upload Sylo’s AudienceAI to target in-market, high intent prospects on Facebook, Insta and TikTok.
- Use Sylo’s EngageAI to convert 200% more leads to calls, meetings and sales on auto-pilot.
