MARKETING becomes ever more crucial in an economic downturn, so why do so many businesses cut their marketing spend to the bone as soon as the economy takes a serious dip? The answer can be found in a single word: fear.
The fear that layoffs will be the inevitable result if marketing budgets are not drastically reduced.
The fear that there is not enough money to sustain decent marketing spends.
Fear that marketing will make no difference because "customers and clients just don't spend in a recession".
Such fear can be understood, but that does not make it any more logical; all the evidence points to the fact that when a company reduces its marketing outlay in a recession its chances of surviving plummet.
Yet why should this be so? Mainly because dollar for dollar, marketing in a downturn provides a much greater return on investment.
Europe's largest budget airline Ryanair provides the template for how approach marketing when the proverbial hits the fan.
In the months following 9/11, Ryanair achieved a position of market dominance. After the Twin Tower terrorist strike, the entire airline industry predicted that people would shy away from flying.
Yet while many airlines brought marketing spend to an abrupt halt following the 2001 attacks, Ryanair understood that by reducing marketing spend, a company risks being forgotten by its consumers and to cut it completely is to gamble with anonymity.
So unlike its competitors, Ryanair set out to marketing itself aggressively, and took active steps to lure people back on to its aircraft. Ryanair's startling growth during this period shows that a brave marketing strategy can see a company through difficult periods.
The airline industry has taken this lesson on board. Research by airline industry publication Airline Business reveals that airlines now recognize that marketing should not be slashed when things get difficult.
Around 45 per cent said they plan to spend "about the same", 30 per cent said their marketing budget for 2009 would be "higher than last year", while a further 10 per cent said their marketing budget for 2009 would be "significantly higher." Only 15 per cent plan to "spend less".
'We are planning to spend up to 20 per cent more on marketing this year," says Birkir Holm Gudnason, who is chief executive of Icelandair. Iceland's economy, remember, suffered more than most in the wake of the Credit Crunch.
"We've seen that as soon as we cease our promotions the number of bookings falls. But if we're visible, the volume of tourists coming to Iceland rises."
In its white paper on recession marketing, called 'Keep calm and carry on Marketing', the UK's Chartered Institute of Marketing warns businesses that if they are not in the game, they run the very real risk of giving their competitors an important edge.
The fear that layoffs will be the inevitable result if marketing budgets are not drastically reduced.
The fear that there is not enough money to sustain decent marketing spends.
Fear that marketing will make no difference because "customers and clients just don't spend in a recession".
Such fear can be understood, but that does not make it any more logical; all the evidence points to the fact that when a company reduces its marketing outlay in a recession its chances of surviving plummet.
Yet why should this be so? Mainly because dollar for dollar, marketing in a downturn provides a much greater return on investment.
Europe's largest budget airline Ryanair provides the template for how approach marketing when the proverbial hits the fan.
In the months following 9/11, Ryanair achieved a position of market dominance. After the Twin Tower terrorist strike, the entire airline industry predicted that people would shy away from flying.
Yet while many airlines brought marketing spend to an abrupt halt following the 2001 attacks, Ryanair understood that by reducing marketing spend, a company risks being forgotten by its consumers and to cut it completely is to gamble with anonymity.
So unlike its competitors, Ryanair set out to marketing itself aggressively, and took active steps to lure people back on to its aircraft. Ryanair's startling growth during this period shows that a brave marketing strategy can see a company through difficult periods.
The airline industry has taken this lesson on board. Research by airline industry publication Airline Business reveals that airlines now recognize that marketing should not be slashed when things get difficult.
Around 45 per cent said they plan to spend "about the same", 30 per cent said their marketing budget for 2009 would be "higher than last year", while a further 10 per cent said their marketing budget for 2009 would be "significantly higher." Only 15 per cent plan to "spend less".
'We are planning to spend up to 20 per cent more on marketing this year," says Birkir Holm Gudnason, who is chief executive of Icelandair. Iceland's economy, remember, suffered more than most in the wake of the Credit Crunch.
"We've seen that as soon as we cease our promotions the number of bookings falls. But if we're visible, the volume of tourists coming to Iceland rises."
In its white paper on recession marketing, called 'Keep calm and carry on Marketing', the UK's Chartered Institute of Marketing warns businesses that if they are not in the game, they run the very real risk of giving their competitors an important edge.
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