Now that the stock market has taken a rather ugly turn, all of the talk has gone from “deficit, deficit” to “recession, recession”
When the 2008 recession came crashing down, marketing was one of the first things corporations cut. And they cut marketing very steeply, far more steeply than almost any other part of their operations. At that time I did a research study with Jupiter Research, in which we found an astonishing 89% of marketing executives said that their efforts were under greater C-level scrutiny than ever before.
No doubt it seemed self-serving at the time but all of the marketing executives, agencies and consultants screamed, “don’t stop marketing” and “don’t cut the budget so much”.
Here’s the big question — where they right? Does cutting marketing during a downturn really hurt your long-term prospects? Or were they wrong?
That’s an important question today, now that it looks like we are again on the cusp of a recession, if not already in one.
The evidence is pretty strong that the marketers were right. People who invested in their brands generally out-performed those who cut marketing the most. And the companies with the strongest brands were the ones who were not hit as hard by the stock-market plunge of 2008/09.
Here’s a chart put together in early 2010 by the very smart people of BrandZ. They looked at both consumer companies and b2b companies, using survey data that reached back before the recession, to identify the strongest brands and the weakest brands. Then they matched stock market performance. Nobody was immune to the downturn (except, perhaps, the astonishing McDonald’s whose brand revitalization in 2004 continues to pay dividends today).
Will we remember the recent past? Or are we going to find ourselves in another uncontrolled experiment of slashing marketing and watching companies falter because of it?
BrandZ Analysis: Brands in times of Recession