Analytic Partners Report: Cutting Ad Spend Guarantees Losses in a Recession

NEW YORK, May 28, 2020 /PRNewswire/ -- A brand that reduces its media spend in 2020 by $50 million will, on average, stand to lose $130 million in revenue in 2020 alone, and when factoring in the long-term implications of this reduction, the number increases to well over $300 million.

That's according to Analytic Partners' latest ROI Genome report Future-Proof Your Brand: Marketing Through Crisis and Beyond, which offers guidance for marketing during an economic downturn and its aftermath, including budget and planning considerations. The report navigates these challenges through the lens of three main stages of major market disruption: crisis, stabilization, and revitalization.

Across the broad scale of brand impact, the research shows that during any period of economic difficulty, media cuts carry large financial implications. A potential recession does not mean brands should stop advertising. Some insights outlined in the report include:

Recessions do not mean lower ROIs: 54% of brands saw ROI improvements during the last recession

• Media drives growth even during a recession: Brands that increased media investment realized an approximate 17% growth in incremental sales
• Media helps brand-building even during a recession: 52% of brands that increased marketing investment saw year-to-year ROI growth over a 2-year period
• Removing media guarantees losses in a recession: On average, brands that reduced media investment suffered an approximate 18% loss in incremental sales
   

"The importance of maintaining marketing budget during an economic downturn is clear – and reducing media support is very detrimental for a brand," says Mike Menkes, senior vice president, Analytic Partners. "Now is not the time to panic or cut costs, but rather to take a measured approach, with strategies and tactics that will provide maximum impact in both the short-term and long-term."

The report also provides considerations for brands to weather through a crisis and beyond based on best practices uncovered in ROI Genome data.

"Being an independent, unbiased partner, gives us the unique ability to help our clients navigate these uncertain times with deep insights gathered across industries and regions," says Nancy Smith, President and CEO, Analytic Partners. "What these collected insights tell us is that brands should not panic in times like this. If they keep their eyes on marketing's long-term benefits they will not just survive but also thrive."

For the past 20 years Analytic Partners has worked with top brands from around the world to optimize business performance and measure the impact of marketing investments. The insights in this report are based on the collected knowledge from these analyses, which form the core of the ROI Genome.

Future-Proof Your Brand: Marketing Through Crisis and Beyond is available for download. To learn more and read the report, visit: https://analyticpartners.com/resources/report-marketing-through-crisis-and-beyond/

About Analytic Partners:

Analytic Partners is a world's leading analytics firm that delivers highly-customized analysis, consulting, and software to improve sales, enhance marketing ROI, and support optimized resource allocation decisions in industry-leading companies. With the presence of its Shanghai office, Analytic Partners devotes world-class expertise and reach to localized analysis, delivery and client support.

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