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Advertising budget, cut or spend?

When should you spend money on marketing efforts? This is probably one question that business owners struggle with. When budgets are cut, often one of the first places to cut spending is in the marketing department.

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Budget decisions:

First you likely cut some of the ads that go out. Starting off with the biggest spend or the spend that has produced the lowest return on investment (ROI). - This is of course, granted that you are tracking this. Most companies will likely reduce the money they spend on social media or billboards, sponsorships or donations as the primary course of action.

These are all reasonable suggestions. Consider this, when you have to cut your household budget do you start with food?

The goal of marketing and advertising is to drive awareness, leads, build branding, convert customers, create loyalty and strategically target potential customers. If you cut the budget in marketing, advertising and communications, how will your business achieve these goals?

Ok so your sales team will take over, they will ramp up cold calls, dial for dollars calling customers and jump on every potential that gets in contact. Is that the best use of your sales team? If you are not creating awareness, brand loyalty and advertising, they are only dealing one on one, not multiple (billboard, social media, ads) on one.

Customer perception:

I mentioned brand loyalty, customer loyalty and awareness. Marketing creates the 'top of mind' presence for your customers, making you easy to remember when your services are required, easy to remember as a referral and continues the confidence of your customers. Imagine if you were use to seeing your favourite brand in multiple locations, then suddenly they are gone, they have removed all of their ads, what would your first thought be?

Tim Hortons is a staple in Canada, we count on them for their 'Roll Up The Rim' contest and their much loved hockey commercials, each summer we see their camping or road trip ads... though we may not think of them all of the time, they have become a staple and we may notice if they were gone. Tim Hortons believes in the brand recognition and customer loyalty that is built continuously, they don't stop because sales slumped, more often than not, they are likely to ramp up their visual presence when sales slump.

Social Media:

I have people ask me all the time, does social media really work? It works when its used correctly. Many times people may not say 'I found you on facebook' but when they are looking for someone, your company is one they may have found in search, checked your reviews or they may asked for a reference from some of their contacts and your company has come up. Think this only happens for small companies? People within corporations get tasked to find certain things, ie: HR is asked to find a new service provider, that HR Manager may ask contacts online before beginning the daunting task of hunting through various ads. If anything, this is where I would suggest moving budget, perhaps reducing your yellow pages ad or hockey program ad and spending a little more, or preserving your social media budget.

I hear all the time, 'Oh you pop up on my feed' 'You were recommended by a ..... on facebook' 'I always like your instagram' these are recall, reference and tools, doing the work for you. But I will warn, social media takes time to grow but once you have it rolling it can be a great tool for communicating, soliciting and reading your audience.

marketing okotoks

Shift, not cut

Ok so you do have to cut some of your marketing budget, there is always areas to 'trim the fat'. Your buddy's kids hockey team pamphlet, that may be a good start. Maybe instead of a whole page, you consider a half page.

Buy in bulk when you can, if you are promoting monthly, ask for a deal, renegotiate and don't be afraid to ask for discounts.

Check those automatic placements - if you are always placing an ad in certain areas but never getting a return (ie: a lesser known publication or one with fallen readership) it may be a good time to re-evaluate. The radio has been a softening venue in small towns, the yellow pages is dying off, so of your clients use Google for searches and not the yellow pages, it could be time to take that auto-renew off (Yellow pages are still good in areas with poor wifi so you could always just target those areas).

Gifts are generally more lavish for all customers when times are good, but most marketers will suggest when times are tough, segregate your clients into A B C D clients and based on their spend or potential from them, you organize gift giving based on that methodology rather than all or nothing.

Look at spending your money saved on lower ROI areas into areas that have greater recall.


Many businesses cut their marketing budget when sales slump, thats the opposite tactic. There are a lot of great strategies to employ that may mean instead of cutting drastically, you re-evaluate your spending and re-allocate where it makes sense.

When money is flowing freely, the mindset is that you don't need to advertise, when really, some of that surplus should be spent on additional advertising to help level out the slower periods and help gain marketshare rather than sitting back and just enjoying the ride. It can take time to build up awareness, brand recognition and customer loyalty, when times are good, it is, in fact the best time to keep that strength.

While we may be tempted to cut a chunk of the marketing and advertising spend during tough times, there are stronger strategies to make it through.

Julie Boake

awedity creative

marketing - branding - design - online

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