Marketing to a budget or on a budget?

In these times of economic gloom sound marketing advice, based on research, is to maintain the marketing activity while the financial management tendency, based on prudence, is to cut marketing expenditure. 

Research by Harvard Business School has shown that it is essential to maintain marketing spending, even more so in a recession and to emphasise core values. “It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain customers need the reassurance of known brands.”

In the last blog I talked about the importance of a Marketing Plan and closely linked to the plan is the Marketing Budget. As with the marketing plan - a statement of intent, a manifesto and plan of action - time should be spent on carefully building the accompanying marketing budget. Companies without a budget seem to be more easily tempted to buy special advertising offers and buy into all kinds of special deals than companies who have planned ahead and purchased at more advantageous series rates for marketing services that are core to the plan. Not only are the bargains not always appropriate but it is amazing how quickly the costs mount up and without apparent benefit. 

I have frequently referred to the engineering philosophy behind technical marketing. Take the case of purchasing a new machine or piece of equipment. It is regarded as an investment that will be justified on the benefits it will bring - lower costs, improved productivity, better quality. We look at marketing as an investment, an investment that should deliver valid returns. Just because there is often a significant creative element does not devalue the investment benefit. Equally there should be benchmarks and goals set that are measurable.

Another more subtle way of cutting the marketing budget is to cut quality. Where marketing is not valued by a company, then purchasing marketing services cheaply can be tempting. The problem with this interpretation of budget is that the downgrade in quality that usually accompanies becomes apparent to customers. They start to perceive the company as a 'budget' brand and lower their expectation of both the quality and value of that company's product accordingly. Interestingly people buying marketing services at a budget price might think otherwise in their day to day lives. They would probably opt for experience rather than trainees or amateurs and recognise that experience may appear more expensive but is actually the safe option. The same people that wouldn't let a student do their hair or fix their teeth will happily let a relative or man they met in a pub have a bash at their web site, design a brochure or photograph products. Although professional marketing advice might come at a higher hourly rate it can prove a wise investment in doing things right and helping the company build credibility.