In times of economic uncertainty, many companies make the same mistake: cutting their marketing budgets as if it were a cost-saving measure. However, the data tells a different story. According to the report The Effectiveness Equation by Google, the cost of stopping marketing investment can be much higher than the immediate savings sought.
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The study states that recovering lost market share due to budget cuts requires reinvesting approximately $1.85 for every dollar not spent. In other words, the negative impact is not only real, but disproportionate.
The logic of cutting may seem attractive in the short term, but it ultimately weakens brand presence, reduces recovery capacity in the market, and gives ground to competitors.
What are the consequences of stopping marketing investment?
One of the clearest warnings in Google’s report is that inaction also has a cost. When brands go dark — that is, disappear from the consumer’s radar — they begin to lose what is known as brand equity: the sum of recognition, affinity, and differentiation built over time.
For example, the report documents the case of a footwear brand that cut its advertising investment by 40% during a time of crisis. Meanwhile, its direct competitor maintained spending and launched an aggressive growth campaign. The result: in just six months, the competitor increased its awareness by 15% and purchase intent by 11%.
The message is clear: when one brand steps back, another steps in. And once that happens, getting back into the consumer’s mind can take years.
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How long does it take for a brand to recover after a cut?
Google cites Nielsen data that reinforces the severity of the issue. Brands that stop investing in advertising can lose up to 2% of future revenue for every quarter without advertising presence, and in some cases, may take three to five years to recover that level of revenue.
Moreover, the study reveals that many brands, in an attempt to compensate for the lack of branding investment, try to increase performance marketing spending, but this does not always work. In one specific case, a brand with strong brand presence that pivoted toward performance marketing reduced its total ROI by 44% in just two quarters, by weakening the foundation that made its campaigns effective.
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Why is it important to maintain a balanced investment between brand and performance?
One of the key findings of the report is that the most successful brands don’t choose between building a brand or generating immediate sales. They do both at the same time. Investing in branding campaigns creates recall, trust, and loyalty. Meanwhile, performance campaigns trigger immediate purchase intent.
Both strategies complement each other. In fact, Google shows that the most efficient mix for e-commerce brands is when between 40% and 60% of the budget is allocated to branding.
Eliminating or weakening one of the two dimensions unbalances the strategy and can cause even tactical campaigns to lose effectiveness.
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How do consumers behave during a crisis?
During periods of economic pressure, consumers not only look for low prices, they also value clear messaging, brand empathy, and consistency in communication. These are the moments when brands have the greatest opportunity to connect emotionally and build lasting bonds.
However, to take advantage of that window, they must remain visible. Brands that disappear from the market not only lose sales, they lose meaning.
As the study points out, many brands tend to “turn off” their campaigns just when the consumer most needs reliable references. This represents a double loss: the sale is lost, and so is the opportunity to strengthen the relationship.
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What recommendations does Google make to maintain marketing investment?
The report proposes three key principles to sustain a constant and effective marketing investment:
- Think long term: measure success beyond the quarter and consider brand value as a strategic asset.
- Model the impact of cuts: use marketing mix modeling tools to visualize the potential damage of a budget pause.
- Coordinate with finance: use data to show how marketing impacts sales, profitability, and resilience, to avoid it being seen merely as a variable expense.
The document also emphasizes the importance of maintaining an active media presence, especially when the competition lowers its guard. In such moments, the cost per opportunity tends to be lower and the impact of investment, higher.
Why is it worth maintaining the marketing budget?
The answer is yes. In tough times, investing in marketing is not a luxury, it’s a strategy for protection and growth. Brands that maintain their presence, adapt their messaging, and build relationships during crises are the ones that emerge stronger when the market recovers.
Cutting may seem like a smart decision on a spreadsheet. But when you look at the effects on the consumer’s mind, future revenue, and brand health, the cost of silence may be the highest of all.
