Marketing when the going gets weird

Uncertainty, volatility? Bring it on.

“Everyone has a plan until they get punched in the face.” – Mike Tyson

Why that particular quote? Oh, no reason.

Here’s one lesson we’ve learned over the years: When the going gets weird, do not stop advertising, do not cut your marketing budget.

Easy for us to say? Absolutely. That doesn’t make it less true.

Marketing (capital “M”, all four Ps) is not discretionary spending. It is your brand’s primary driver of sales, profitability, pricing power, and market share growth.

Finance — God bless, ‘em — loves to get out their scissors/scalpel/machete and start cutting/slicing/hacking away. Bad things happen when brands cut marketing and advertising.

Sales drop. Pricing power fades. Profit margins erode. Brands cede ground to their competitors. And it takes a long time and a lot more money to claw it all back.

According to the Ehrenberg-Bass institute, when brands stop advertising:

- Sales often decline year-on-year (on average, sales fell 16% after one year, and 25% after two years).
- The rate of decline is fastest for brands that are already declining before the advertising stop.
- Small brands typically suffer greater declines than bigger brands.

But even big brands get in trouble. Here are two real world examples:

In an attempt to become a D2C, digital-first brand, Nike cut their physical availability in retail stores. They gave up shelf space to their competitors. They sort of gave up on product innovation, which is utterly bananas. And they stopped their long-term, long-lasting, emotional brand advertising.

Instead, they focused their entire media spend on short-term, performance, “20% off, buy now” tactics. Which? During the pandemic sort of made sense, if you tilt your head and squint a bit. Everyone was online, so why not?

It worked at first. And then it cost them billions in sales and market cap.

Pandemic or not, marketing is a memory game. Even though Nike had built massive amounts of mental availability through decades of brilliant marketing and brand advertising, people simply forgot about them. Not completely, of course, but enough that small brands like Hoka and On could make serious inroads.

Fortunately, Nike has been able to right the ship before things spiraled completely out of control.

During the pandemic, Coca-Cola freaked out and slashed their marketing budget to nearly nothing. Coke lost billions and ceded a significant amount of market share to Pepsi. They would’ve been much better off had they simply soldiered on.

The pandemic punched Coke in the face, and they froze.

On the other hand, P&G had a plan. During the pandemic, they increased both their marketing budget and brand advertising.

Guess what? They grew.

When the going gets weird, do not cut your marketing budget. Do not stop advertising.

Okay, why?

Marketing is a memory game. Without advertising, your brand starts to lose mental availability. People forget about you. Not all at once — you’ll be running on the fumes of previous campaigns for a while — but it will happen.
Excess Share of Voice. Deep down, everyone knows not to panic. But at least some of your competitors will. They’ll cut their marketing budget. They’ll cut advertising. They won’t be able to help themselves. Good. Let ‘em. Even if spending more on media advertising isn’t in the cards, you automatically gain Excess Share of Voice simply by being more present than your competitors.
Media spend. In theory, as demand for media falls, the price of media should fall as well. It happened during the pandemic. It may happen again.
Price inelasticity. Generally speaking, stronger brands are able to charge higher prices, and a 1% price increase can lead to an 8-10% increase in profits. Obviously you don’t want to price yourself out of the category, but having a strong brand can shield you from price cuts and promotions that end up hurting the bottom line.

We know that uncertainty is never great, volatility is worse, and your challenges are unique to you.

Rather than cut, however, reallocate, get scrappy, diagnose real business challenges, hone your strategy, plan for probabilities by asking a lot of “what if” questions, measure, rinse, repeat.

You can launch new products and services. You can build mental and physical availability. You can grow your brand even when the going gets weird.

If you ever want to talk strategy, media, positioning, brand architecture or anything, please reach out. We have some very smart people at SRH who are more than happy to help.

Sources:

What we know about advertising in recession — WARC
How brands can navigate 2025’s economic volatility — The WARC Podcast
What happens when brands stop advertising? — Ehrenberg-Bass Institute of Marketing Science
P&G and Coke’s pandemic performance prove it: You don’t cut ad spend in a crisis — Mark Ritson, Marketing Week