In the the ever-changing landscape of business, the question of whether to cut or sustain brand-marketing budgets during economic downturns has been a longstanding dilemma for Chief Marketing Officers (CMOs) and Chief Financial Officers (CFOs).

Boston Consulting Group (BCG) delved into this issue, revealing compelling insights that challenge the conventional wisdom of slashing marketing expenditures. As we explore these findings, we’ll emphasise the importance of a strategic and nuanced approach to brand marketing.

The Pitfalls of Budget Cuts:
BCG’s research unequivocally demonstrates that reducing investments in brand marketing during uncertain times can have detrimental consequences but so many businesses ignore the fact. Fear takes hold and therefore cost-cutting measures seem to provide short-term relief, but the reality is they lead to long-term challenges, including increased costs to regain any lost market share due to your cut backs. The data reveals a clear correlation between decreased brand spending and a decline in total shareholder return, underperforming growth rates, and a loss of market share.

The takeaway is clear: brand marketing is not an expendable expense but a crucial investment in a company’s resilience and long-term success.


A Strategic Shift in Perspective:
Frost Creative recognises the need for a strategic shift in perspective during economic uncertainties. Instead of viewing budget cuts as the default response, CMOs and CFOs should perceive challenging times as opportunities to refine their brand strategies. By understanding the nuances of consumer behavior and leveraging modern marketing tools, companies of any size can position themselves for success even in challenging economic climates.

Precision Branding:
A Holistic Approach: BCG advocates for a precision branding approach, and at Frost Creative, we wholeheartedly support this strategy. Precision branding involves a holistic integration of consumer insights, marketing technology, cost-effective creative solutions, and analytics. All of which Frost can deliver. It’s not about maintaining the status quo but rather about redefining how brand-marketing budgets are spent.

Precision Targeting: Identifying and prioritising target consumers based on their needs and market dynamics is crucial. Frost Creative emphasises the importance of a demand-space approach to consumer segmentation, enabling companies to focus their investments where they matter the most. By considering lifetime values and assessing competitive positions, brands can make informed decisions on where to allocate their resources.

Identifying and prioritising target consumers based on their needs

Precision Activation: Connecting with consumers at the right place and time with tailored messages is paramount. We emphasise the significance of precision activation, ensuring that messages resonate with specific consumer segments. Digital channels, with their reach and precision, become invaluable tools for effective activation strategies. We demonstrate how precision targetting saved Colas Rail £millions on recruitment fees during in our recruitment campaign.
We adopted a highly targeted paid social campaign that engaged people with specific skills, of a specific age, specific education and locations to list a few.

Precision Measurement: Assessing brand impact across demand spaces allows companies to optimise their strategies for growth. Frost Creative suggests a blend of long-term brand-health metrics and short-term key performance indicators (KPIs) like First-Fast Response (FFR) to gauge consumer associations quickly. This combination enables agile decision-making and efficient resource allocation.

In navigating uncertain economic times, rather than succumbing to the temptation of budget cuts, our approach would be to deploy strategic precision. By embracing precision branding, companies can not only weather economic storms but also emerge stronger, with enhanced market share, customer relationships, and overall brand resilience. As CMOs and CFOs evaluate marketing budgets, collaboration and a forward-looking mindset will be pivotal in steering companies toward sustained success.