When uncertainty hits, companies start slashing costs. And which department usually ends up first on the chopping block? You guessed it: marketing.
In many boardrooms, marketing is still seen as a “nice-to-have”: a discretionary spend, non-essential, and a filler that can be cut without any real consequence.
But here’s the truth: the best product doesn’t always win. The best-marketed one does.
Sure, while cutting marketing might boost your profit margins or appease shareholders in the short term, it comes at a cost: your brand’s ability to stay visible, build relevance, and connect with the customers who matter most.
In this blog, I’ll be discussing why marketing budgets are often the first to go, the real (and lasting) damage that can follow, what high-performing brands do instead, and why cutting marketing isn’t saving money – it’s stunting future growth
Let’s dive in.
Why Marketing Budgets Are the First to Go
When growth slows, marketing is often the first budget to get the axe. Why? Because it is still perceived as nonessential. Unlike operations or product development (functions seen as mission-critical), marketing is often treated as a “nice to have.” After all, what is the point of promotion if there is no product to promote?
But here is the catch: having a great product only gets you halfway there. Marketing is what puts your product in front of the right people, at the right time, in the right way. Without it, even the best product risks fading into obscurity.
The problem is, marketing rarely gets the credit it deserves. In a noisy world flooded with content and campaigns, it is hard to measure tangible results. And when ROI is not immediate or easily quantified, marketing becomes an easy target during tough budget conversations.
Worse still, when budgets shrink, leadership often assumes the marketing team can “just do more with less.” But less budget usually means fewer channels, reduced quality, and less reach, making it even harder to stand out. Over time, this erosion chips away at long-term brand equity and visibility.
Unfortunately, this is not theory; it’s happening right now. In early 2025, nearly a quarter (24.2 percent) of UK businesses reduced their marketing budgets, marking the first overall decline in four years. In North America, boards demanded an average 8 percent cut in marketing spend compared to the previous year, with some brands seeing reductions of up to 20 percent.
The Consequences of Slashing Your Marketing Budget
Cutting back on marketing spend might deliver a temporary boost to your bottom line, but that short-term relief often comes at the cost of long-term growth and brand equity. Time and again, the data shows that when brands deprioritise marketing by pulling back on budgets, neglecting narrative control, or losing strategic alignment, the fallout is both deep and lasting.
Companies that scale back brand marketing typically lose around 0.8 percentage points in market share. Regaining that ground isn’t easy: for every dollar saved in ad spend, it takes an average of $1.85 to claw it back. Now that’s bad business.
Between 2018 and 2021, businesses that cut brand investment saw total shareholder returns fall by an average of six percentage points compared to those that maintained or increased marketing spend. And with weaker brand visibility comes weaker conversion: companies in the lowest quartile for brand spending saw awareness-to-purchase rates trail six percentage points behind their top-performing competitors.
Perhaps the most sobering figure of all: 80% of companies that slashed their marketing during a downturn failed to return to pre-recession growth in both sales and profits within the following three years.
And this isn’t just theory. High-profile cautionary tales show what happens when even the most established brands misstep.
Take Bud Light. In 2023, the brand partnered with transgender influencer Dylan Mulvaney in an effort to modernise its image and reach a broader audience. However, the campaign deviated sharply from Bud Light’s traditional brand positioning, leading to backlash from some segments of its customer base. Sales dropped by over 21%, customer loyalty declined, and parent company Anheuser-Busch InBev lost nearly $16 billion in market value. The lesson wasn’t about promoting the wrong message, but its sudden shift in tone caught consumers off guard and on edge.
Or consider Pepsi’s now-infamous Kendall Jenner ad. Meant to convey a message of unity, it ended up backfiring by appearing to trivialise the Black Lives Matter movement. Though the campaign was pulled within 24 hours, Pepsi faced intense backlash, showing how tone-deaf marketing can erode trust overnight.
What You Should be Doing Instead
While you can’t control every detail of how your brand is perceived, you can shape the narrative by showing up consistently, telling meaningful stories, and aligning your brand with values that resonate. That doesn’t mean mindlessly jumping into the next trend or rebranding for attention. In fact, the brands that rise above the noise do so by staying grounded in authenticity, cultural relevance, and emotional truth.
Just look at Dove, which redefined beauty standards through its Real Beauty campaign, fostering deeper loyalty and reshaping perceptions through a message that felt honest and inclusive.
Or Coca-Cola, which has spent decades anchoring its brand in a single emotion: togetherness. Whether it’s a holiday campaign or a cross-cultural collaboration, the brand shows up with consistency, and that consistency creates connections.
These aren’t flukes. They’re the result of deliberate, long-term investment in brand storytelling.
The return?
Stronger customer bonds. Greater resilience. Real commercial payoff, even in tough times.
Conclusion
In summary, when economic pressure mounts, marketing often ends up on the chopping block. But the reality is this: the best product doesn’t always win; the best-marketed one does.
While trimming your marketing budget might offer short-term relief, it risks long-term damage that’s far harder (and more expensive) to undo.
The brands that endure aren’t the ones that retreat during tough times. They’re the ones who double down on their story, stay visible, and keep building trust, even when the market gets shaky.
If you’re looking to shape a marketing strategy that ticks all these boxes, book a discovery call today and let’s craft messaging that sets you up for success.
