When the economy enters turbulent waters, often marked by inflation, rising interest rates, tariffs, and high consumer debt, executives face difficult choices. Do they reduce costs, and if so, where? For many companies, the instinct is to slash marketing spend.
But history shows that this approach is shortsighted. Brands that cut marketing during downturns often face:
- Lost market share that competitors quickly capture.
- Damaged brand equity that takes years (and significant budget) to rebuild.
- Higher long-term costs, as recovery requires double the initial savings.
In contrast, brands that make strategic, data-driven decisions tend to weather storms better and emerge stronger once markets stabilize.
What role does marketing play in tough times?
Marketing is often underestimated in times of financial pressure. However, decades of Ipsos MMA benchmark data reveal that marketing is one of the most valuable levers during downturns. Key findings include:
- 30–40% of marketing investments are underperforming but with proper measurement, these funds can be reallocated to higher-impact initiatives.
- Brands that maintain consistent brand-building investments are better able to defend pricing power and customer loyalty.
- Companies that cut indiscriminately often create a downward spiral: performance marketing becomes less effective without brand support, forcing reliance on discounts and promotions.
The takeaway? Marketing isn’t just a cost center — it’s a growth driver that protects margins and strengthens resilience.
How can measurement help protect investments?
Unified marketing and commercial measurement helps executives avoid guesswork. Instead of making decisions based on gut instinct, leaders can see exactly which activities drive business outcomes. With the right framework, companies can:
- Quantify incremental sales impact across all channels, not just clicks or impressions.
- Identify inefficient spend and redirect it to programs with higher ROI.
- Scenario-plan for multiple economic outcomes (mild recession, severe downturn, or rapid recovery).
- Balance short-term sales performance with long-term brand equity, ensuring sustainable growth.
This approach allows businesses to cut waste without cutting effectiveness, maintaining strong positioning while competitors stumble.
What’s the framework for thriving in economic turbulence?
Ipsos MMA has developed a proven four-step methodology for navigating volatility:
- Quantify True Business Impact
- Connect marketing spend to actual sales outcomes.
- Understand how factors like pricing, competition, and economic conditions interact with marketing.
- Use benchmark comparisons across industries to avoid short-sighted decisions.
- War-Game Multiple Scenarios
- Model how different economic conditions (tariffs, inflation spikes, interest rate changes) will affect consumer behavior.
- Prepare “ready-to-go” playbooks for each scenario.
- Move quickly and confidently when market conditions shift.
- Identify Efficiency Without Sacrificing Effectiveness
- Eliminate the 30–40% of spend that doesn’t deliver results.
- Maintain minimum thresholds for brand investment to avoid eroding equity.
- Reinvest saved dollars into higher-performing channels or campaigns.
- Validate and Track Business Impact
- Continuously measure and recalibrate strategies.
- Track incremental sales against forecasts.
- Monitor brand equity to prevent long-term erosion.
- Quickly pivot as new data emerges.
What are the risks of cutting brand spend?
On the surface, cutting brand-building activities may seem like a safe way to preserve budgets. In reality, it creates long-term risks:
- Weakened brand equity makes companies more vulnerable to price wars.
- Eroded pricing power forces reliance on discounts and promotions.
- Declining performance ROI because up to 35% of performance marketing’s effectiveness comes from brand support.
In short, brands that cut too deeply often sacrifice future growth for short-term relief and the recovery costs are steep.
What’s the action plan for executives?
To successfully navigate today’s volatility, executives should adopt a structured, measurement-based action plan:
- Audit current measurement capabilities: Are your metrics siloed, or do they provide a unified view of marketing’s true impact?
- Protect minimum brand investment thresholds: Defend brand equity while optimizing other areas.
- Align cross-functional teams: Ensure marketing, finance, and operations work from the same analytical foundation.
- Implement scenario planning: Develop war-room style strategies for tariffs, inflation, and consumer sentiment shifts.
The best-performing companies treat downturns as a chance to streamline investments and strengthen market share, not just cut costs.
What’s the bottom line?
Economic turbulence isn’t just a challenge, it’s an opportunity. Companies that embrace unified measurement consistently outperform those that react with indiscriminate cuts.
The key is to move from:
- Reactive cost-cutting → Strategic optimization
- Guesswork → Data-driven decision-making
- Short-term savings → Long-term resilience and growth
As Ipsos MMA CEO Pat Cummings explains, “During periods of uncertainty, it is important that marketing-driven brands find the right combination of commercial investments to drive sales and grow brand equity. Tools today can change the playing field both in the short and longer term by guiding clients to cost-effective plans that achieve immediate results while building a stronger brand for the future.”
By protecting marketing investments with precision measurement, brands can reduce risk, seize opportunity, and emerge stronger when markets rebound.
Ready to turn uncertainty into opportunity?
Download our latest resource, Navigating Economic Turbulence, to dive deeper into the strategies, benchmarks, and frameworks that help brands protect growth and resilience in volatile times.
