The first item to be cut in a budget meeting is usually the most expensive one

When drawing up the 2027 budgets, the finance department’s first instinct is always the same: look at the promotion and advertising line items – where can we make cuts? As these expenses do not appear to be essential, unlike machinery purchases or staff costs, they are easily lumped into the ‘deferrable’ category. Yet marketing communications, apart from appearing as an expense on the balance sheet, is an investment in next year’s sales figures. And cutting this investment during periods of uncertainty could prove to be one of the most costly cost-cutting decisions you make.

Let’s look at the figures first. Studies examining periods of economic downturn – including those published in the Harvard Business Review – point to a similar pattern: firms that maintain or increase their communications budgets during a crisis grow significantly faster than their competitors during the recovery phase.

This is why the story of how Kellogg’s outperformed Post by increasing its advertising investment during the Great Depression is considered a marketing classic. Whilst Post cut back, Kellogg’s chose to remain visible and secured category leadership. The mechanism is not complicated. When everyone else falls silent, the share of the market for the sole brand that speaks out grows. The same message is conveyed at a lower media cost and with less noise. In marketing, this is known as ‘share of voice’ and is directly linked to market share in the long term. If your share of voice is not leading your market share, growth becomes difficult; cutting back, however, quietly hands this share over to someone else.

Silence Is Also a Message

The most dangerous aspect of budget cuts is that their impact is not immediately apparent. When a well-established machinery manufacturer in the sector cuts its promotional budget by half in 2027, nothing happens in the first quarter. Existing customers continue to place orders, previous deals are finalised, and reports look healthy. The damage accumulates at the top of the sales funnel—among potential customers you haven’t yet met. The price of not building visibility today is paid twelve months later when turnover targets are missed. At that point, the problem is no longer a budget line item, but a matter of memory. Brand awareness is not an asset that can be established once and then shelved; it is a mental space that must be constantly nurtured. If you stop nurturing it, someone else will fill that space, and reclaiming it will always be more expensive than establishing it in the first place.

In an environment of uncertainty, buyer behaviour also changes. Investment decisions are delayed, the number of comparisons increases, and everyone seeks to avoid the risk of choosing the wrong supplier. At this stage, the decision often goes not to the firm offering the best deal, but to the one that appears to carry the least risk. What reduces the perception of risk is continuity and consistency. A brand that communicates regularly conveys this message as much as its product does: ‘I am here, I am still going strong, and I will be here tomorrow.’ Consider two feed producers grappling with raw material price fluctuations. One ceases all communication entirely, whilst the other continues to convey the message of quality and continuity, even on a limited budget. When the market recovers, which company will the buyer call? In purchasing decisions, trust often takes precedence over technical superiority, and trust is earned by those who remain visible in the field.

Of course, ‘increasing’ does not mean spending more blindly. The companies that succeed during a crisis are those that spend more strategically, not simply more. Simplifying the message and clarifying the target audience, closing low-return channels and redirecting resources to areas that generate the most conversions, and measuring exactly what every penny is being spent on form the basis of this approach. A company that can increase its budget does so, whilst one that cannot at least maintains its presence by using its existing budget more efficiently. Remaining completely silent, however, cannot be justified on the grounds of efficiency.

That is why the question that must be put on the table at the 2027 budget meetings should not be ‘Where can we cut back?’, but ‘Which area can we capitalise on whilst our competitors are pulling back?’ Crises push brands that neglect their communications into the background, whilst those that remain visible become the pioneers of the recovery period. The marketing budget determines not today’s but tomorrow’s sales, and who secures those sales is closely linked to who continues to be heard during this difficult period.