How To Protect Your Business From A Recession By Increasing, Not Decreasing, Your Marketing Budget

By: Thomas Buttino

Published: January 20, 2023

Blog, Business Growth Strategy

Why The Best Way To Ensure Your Business Continues Thriving, Even Through A Recession, Is Increasing Your Marketing Budget, Not Slashing It

Ok, I’m sure from the fairly redundant title and sub-title, you noticed that this post is going to be about putting more money, not less into your marketing budget next year and beyond to survive an impending global recession.

Why? Because it’s the most surefire way to help secure your business’ financial future and this post will prove it – mathematically.

Did you know that, ironically, when most businesses are confronted with even the possibility of shrinking revenue and less opportunities in the marketplace, the first thing to typically get crushed is their marketing budget?

We’re already seeing signs of this coming true with the diminished ad spending projections for 2023. They’ve shrunk from an 8.3% growth rate in 2022, to a meager 2.2% in 2023. That’s a serious contraction in expected spending. That’s also only for ads, which is just one component Chief Marketing Officers use with their teams to carry out effective marketing campaigns.

Let’s dive in a little deeper to see why this reduction in spending in marketing is so detrimental to any business, especially yours.

Why Marketing Budgets Are Typically Cut First

“Marketing” in any business can be full of mystery. Even the very definition of “marketing” can vary drastically between members of the management team, and those within the company. So it’s important to have an understanding of the basic elements of marketing, and then we can look at why they’re critical to your success…

#1, What is marketing?

#2, What are the goals set forth for the Marketing department? Is it engagement with customers, creating funny or compelling ads, running a direct response campaign, or a “spray-and-pray” campaign meant to simply build brand awareness? (Author’s note: Please don’t build a “spray-and-pray” campaign. They aren’t measurable, and will waste money and worse, time – the most valuable thing in life.)

#3, Finally, how will you measure the return on investment (ROI) for all the things marketing? What are the benchmarks you can set that allow everyone to see the results?

All of these are vital questions to ask and answer for your organization, so let’s tackle each one right now to lift the veil and show just how powerful marketing is for your business, and why it needs to be the last thing to go from now on.

#1 How Do We Define “Marketing”?

Direct from the American Marketing Association…

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (Approved 2017)

American marketing association

Not bad, but I have my own definition from years of being the Director of Marketing for a successful Fintech company…

Marketing is the art of developing a deep understanding of the people you want to serve, scripting a relatable message that shows them how your solution solves their problem(s), creating compelling offers they will consume, and following the data to constantly improve your efforts.


In other words:

  • Know your audience…
  • Speak in their language…
  • Give them a no-brainer offer so they take action…
  • Monitor, analyze, and optimize the steps above.

That’s it. That’s Marketing. Anything more is useless busy-work.

#2 What Are The Goals Of Marketing?

No matter what business, organization, or type of entity you run, the main goal of EVERY marketing campaign is to get a response from your audience. Full stop.

I hope you just asked, “Thomas, why is a response even more important than something like email opens, new subscribers in our social media, or other measurable items?”

Because those are vanity measurements and translate into exactly $0.00 of more revenue into your bank account.

In contrast…

Someone responding, good or bad, to any marketing campaign = the start of a conversation.

Conversations allow you to personally engage with someone and opens the door to a sale being made. Therefore…

Responses + Conversations = Sales


Someone who responds positively to your campaign is typically queued up to buy from you, so respond to them with an amazing offer, and close the deal.

Someone who responds negatively to your campaign is usually just saying they don’t agree with everything you said…so listen to and overcome their objections, make them an amazing offer, and close the deal. Being able to overcome objections is really the art of selling, but we’ll leave “What is Sales?” for another post.

I’m guessing right now you just said, “That’s stupid. People who respond negatively to our ads hate us and will never buy from us.”

That’s sort of true, some folks just hate anything anyone puts out in the world even if it can help them. In reality though, if you’re targeting the right audience, with the right solution, and the right offer, then even those who initially object can eventually become raving fans of your business. The real question is, do you have what it takes to convert them? Yes, that was me laying down a challenge.

#3: How To Measure Your Marketing’s ROI

At the end of the day the easiest way to monitor the effectiveness of your marketing campaigns is to track the response rates, and how many of those responses converted into sales. Then, compare the amount of money spent to the revenue generated.

I heard Michael Cooch, a successful entrepreneur and founder of LVRG Ventures give a great talk about how to simplify measuring ROI where he broke it down into a simple 1:3 ratio – $1 into a campaign, $3 out.

(Technically, Mike was talking about Gross Revenue compared to Lifetime Value, but I don’t want to go too deep down the biz term rabbit hole on this post.)

Why is a 1:3 ratio necessary? Again, brilliantly put by Michael, that’s where the profit lives.

Without profits we’re not running a business, it’s a hobby.

  • A 1:1 ratio is just breaking even. (Include the time wasted to make no money here and you’re in the “red”.)
  • A 1:2 ratio only delivers new money for reinvesting into the campaign/business. (Again, include the time-spend and you’re in the “black” at best.)
  • A 1:3 ratio (the Golden Ratio) means money leftover even after reinvesting, a.k.a. profit! (Winner, winner, chicken dinner.)

Get your business to generate a 1:3 ratio and all your money problems are solved. (HA! Just kidding, but at least know you’re running a successful business. Congratulations!)

To back track just a little, I wanted to mention one last thing on tracking responses”

It’s important to measure both the number of positive and negative responses each campaign generates. If it’s leaning too much in either direction you can do better.

Yes, even if your campaign received an overwhelmingly positive response rate, there is probably another 30-40% of your audience who were not irked enough to respond, which means no conversation happened, and you didn’t even get the chance to sell them. This means you can spin up another campaign targeted at the 30-40% you missed and get those mildly dissatisfied individuals to “raise their hands” if you know what I mean.

How Your Marketing Ties Into Thriving In A Recession

Ok, so now we know that marketing is the art of knowing your audience, speaking with them on their level, and delivering amazing offers…

When your marketing campaigns get people to respond, it sets the stage for a conversation and a sale…

Sales are how we grow our business. Whether it’s a new sale, upsell, down-sell, cross-sell, referral, or renewal, it’s more money in your bank account. Pretty nice, right?

Now, because I said we were going to prove this hypothesis mathematically, here it is laid out in equation form…

Marketing = Responses + Conversations

Responses + Conversations = Sales

Marketing = Responses + Conversations = Sales

thomas buttino

Since the only way to get responses and conversations is marketing, then it becomes clear how vital this task is to ensuring your company’s survival, especially during a economic downturn.

Taken in reverse, if Sales are dependent on responses and conversations, then again, Marketing is your key to winning no matter what the economic climate is. It’s just simple math, baby!

While a recession hasn’t been officially declared as of the date this article was published, there does appear to be one coming soon. Moreover, there will undoubtedly be one in the future no matter when it occurs after you’ve read this, and there will be multiple downturns in your business’ lifetime.

So what can you do? Well, get with your marketing team to see where you stand in regards to your Golden 1:3 ratio, then see how you can improve on it to carry you through the next few years and beyond.

Don’t be like your uninformed competition either. They’re already pulling back on their marketing budget and could be struggling or out of business in the next couple years.

Take your business in the other direction and continue pushing through the good times and the bad. It’s why you got into your business in the first place, right?

If so, send me your thoughts in the comments below. If you think what I laid out here is total garbage, change my mind in the comments below. I can take it.

Talk soon,
Thomas Buttino – Advocate For Ethical Entrepreneurs & Clever Marketing Campaigns Worldwide

Bonus: Want to kick your Customer Acquisition efforts into high gear, without spending more time or money? Click the button below now to get our free blueprint to implementing a Customer Success Program that’ll deliver exponential growth for your business this year…Do it. Click the button now…

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Thomas Buttino

From a very young age, Thomas has spent his time putting all he's learned about business, psychology, and leadership into effect to try and have an impact on the world.

Now, he's launched The Automated Executive Program to help other business owners gain useful, actionable insights into the world of digital marketing. Join Thomas on this journey of personal and professional development.

Discover a new, more automated way forward so you, too, can begin enjoying more of the most precious thing in life - TIME.

Thomas Buttino

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