In tough economic times, businesses often look to cut marketing budgets, seeing them as flexible costs. However, stopping or significantly reducing paid media can lead to long-term consequences that outweigh the short-term savings.

The Risk of Going Dark

Pausing marketing can damage brand recall and consumer engagement. Brands that go silent risk losing trust and loyalty, as shown in the Edelman Trust Barometer. This credibility survey found reduced consumer engagement when companies cut back. In today’s uncertain economy, regular brand interaction is crucial for maintaining customer relationships.

The Importance of Brand Recall

Halting advertising leads to a decline in brand recall, making it harder to regain consumer attention later. Studies show that maintaining visibility—especially in digital channels like podcasts and influencer marketing—has a significant impact on consumer decisions.

Advertising as an Investment

Cutting ad budgets during economic downturns can lead to bigger losses in sales. For every dollar saved, brands often lose three times that amount in revenue, according to TiVo Research. Consistent advertising keeps campaigns optimized and prevents competitors from seizing market share.

Case Study: Coca-Cola vs. Pepsi

During the 2020 pandemic, Coca-Cola reduced its ad budget by 35%, leading to an 11% drop in net revenue. Meanwhile, PepsiCo maintained its spending and saw a 5% growth, gaining a competitive advantage.

This example highlights the key error of reducing ad spend during a crisis, which enabled PepsiCo to gain a competitive edge and increase its market share at Coca-Cola’s expense.

The Better Approach: Reduce, Don’t Stop

Instead of pausing ads, consider reducing spending to maintain brand presence. This keeps your brand visible, helps campaigns stay optimized, and allows for a quicker recovery when economic conditions improve.

Staying visible in tough times is essential for staying competitive and capturing future market opportunities.