Think of the economy as a networking room. When times are good that room is crowded, loud and noisy. It’s hard to communicate. When the economy goes south, that room goes quiet which offers a marked advantage for businesses that maintain their marketing and PR budgets.
They are talking about a recession again. Who is “they”?
Seventy percent of academic economists surveyed by the Financial Times and 60% of CEOs surveyed by the Conference Board. The former predicts a recession in the “first or second quarter of 2023” while the latter says, in the “next 12 to 18 months.”
It’s worth pointing out the Secretary of the U.S. Treasury, who previously served as Chair of the Federal Reserve has said recently a recession is not imminent.
I hope she’s right, but either way, businesses are budgeting for it now, so marketers and PR need to be thinking about how they make the case for their budget. This is because traditionally, marketing and communications budgets are among the first to get the ax when times get tough.
There are advantages to maintaining a marketing and PR budget in recessionary times. In times like these (2009, 2020) I conjure up my favorite analogy that marketing and PR is like working the room at a networking event.
When the economy is good, that room is really loud. Everyone is talking and there’s a lot of noise and competing messages. You could shout over everyone else and be heard, but that’s outside the social norms. So, you have to be strategic and different. You pick out who you want to talk to, listen carefully to their needs and then engage with well-researched messages.
When the economy goes south the opposite happens. We are all in that same room, but everyone stops talking because the marketing and comms budget got slashed. Businesses that have invested in research and messaging – at that precise moment – have an opportunity to communicate with little competition.
This is about to happen again. And that’s why smart, cost-conscious companies should absolutely, positively not cut the marketing and PR budget right now.
Influence of the Pandemic on Marketing Budgets in a Recesssion
I’d add an addendum here to point out that this is going to be a real test. The last few years have changed perceptions. Multiple surveys show marketing departments, creative teams and PR and communications have all emerged from the pandemic with newfound respect from their peer’s in business.
Why? These disciplines are more valued because they helped business leaders solve problems in a fluid and asymmetric environment. Communicating effectively, to employees, customers and investors has proven paramount.
Even so, I’d still suggest getting ready for those conversations right now.
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