In short: in a recession the advertising budget is almost always the first to be cut, and the data marks it as one of the most expensive choices. Brands that reduce media spend lose an average of 15-18% in incremental sales and hand share to rivals who stay active (Analytic Partners, 2022). Those who hold or raise investment defend their position and recover faster (IPA, Field, 2008-2009). The mechanism is excess share of voice, meaning spending above your market share: it correlates with growth, and in a recession it costs less because competitors go quiet (Binet & Field).
Why does everyone cut advertising in a recession?
Advertising is the easiest line to cut. It does not stop production, it triggers no immediate layoffs, it disappears from a quarterly P&L without a sound. For a finance director under pressure it is an almost painless signature, and that is exactly where the trouble starts, because the effect is invisible in the quarter you cut but gets paid back slowly over the following years, when the lost share has to be won back.
The intuitive logic, we sell less so we spend less on marketing, swaps cause for effect. Sales fall because demand falls, not because advertising stopped working. If anything, in a market where half the competitors go silent, the same voice carries much further. We say this from direct experience, with no study to hide behind: in most of the cases we have worked on, cutting ad spend in a crisis was a reaction of accounting panic dressed up as prudence.
What actually happens to brands that cut ads in a recession?
The most cited reference is the analysis by Analytic Partners, built on more than twenty years of measurement, over 750 brands and 45 countries (Analytic Partners, 2022). The figures are explicit. Brands that reduce media investment in a recession lose an average of 15-18% in incremental sales and cede share to those who raise it; those who raise it record a +17% in incremental sales and improve their return on investment in 60% of cases.
There is a detail we rarely mention. In an audit for an Italian furniture maker that had zeroed almost all its media spend in 2020, market share returned to pre-crisis levels only toward the end of 2023, three years late, with a direct competitor having moved ahead on the retail shelf in the meantime. The savings from that year were real. The cost, spread across the three that followed, was much higher.
What is excess share of voice (ESOV)?
Excess share of voice (ESOV) is the difference between a brand's share of advertising voice and its share of market. The analysis of the IPA archive by Peter Field, across about 880 Effectiveness Awards cases and roughly fifty tied to the 2008-2009 recession, points to ESOV as the single most predictive factor of share growth, in boom and in slump alike (IPA, Field).
The idea is not recent. The relationship between share of voice and share of market circulated in media departments as a rule of thumb long before it had an official name, and it gets rediscovered at every crisis, as if each recession needed to relearn the same lesson from scratch. The digression is worth it because it explains a piece of industry psychology: when times are good nobody questions the budget, when they worsen it is cut first, so the lesson never really settles.
In a recession the mechanics turn in favour of whoever stays. When competitors cut, the cost of reaching an audience drops and the share of voice of anyone who keeps investing rises at the same budget. The window to buy share at a discount opens precisely when everyone else shuts off the tap.
Source: Analytic Partners (2022); IPA, Peter Field.
Defending investment without ignoring cash
Protecting the budget does not mean spending blindly. It means holding share of voice as efficiently as possible, and in a crisis efficiency counts double. Four concrete moves for those who want neither to waste nor to vanish.
- Protect the brand component instead of shifting everything to direct response: brand building defends future share, and the reference split stays close to the one described in the 60/40 rule (Binet & Field).
- Use falling media costs to negotiate space and raise real share of voice, not just to avoid the cut.
- Track share of voice and mental availability, because looking only at the quarter's sales will always argue for cutting.
- Keep a continuous presence even on a reduced budget, rather than alternating big campaigns with long silences.
The same principle sits under all four. Demand falls for everyone, but brand memory falls only for those who stop feeding it, and correct attribution serves precisely to move the euro where it works without lowering the brand's overall voice.
Does it hold for B2B and for smaller firms?
Yes, often with more force. In B2B most buyers are not ready to purchase at any given moment, so cutting communication in a crisis means leaving memory just as competitors build recall for the recovery. The LinkedIn B2B Institute reaches the same point: whoever stays visible in a recession gains lasting ground.
For a small firm the real constraint is cash. The principle still holds, the problem is funding it. Rationing beats switching off, because a continuous and recognisable presence even with modest means leaves more of a trace than a few campaigns separated by months of absence. It should be said, though, that without liquidity nothing gets defended, and in that case survival comes before share of voice.
FAQ
Is it really worth increasing advertising during a recession?
If cash allows, yes. Analytic Partners data (2022) show +17% in incremental sales for those who raise spend and a ROI improvement in 60% of cases, because media cost less and competitors ease off. If cash is tight, the minimum goal is to avoid a fall in share of voice.
How much do you lose by cutting the ad budget in a crisis?
An average of 15-18% in incremental sales according to Analytic Partners (2022), with a long-term revenue loss several times larger than the immediate saving. The share handed to competitors is slow and costly to win back.
What is excess share of voice (ESOV)?
It is the gap between a brand's share of advertising voice and its share of market. A positive ESOV, spending above your share, correlates with share growth; the IPA analysis by Peter Field names it the most predictive factor, in expansion and in recession.
In a recession, should I move everything to performance?
Performance delivers measurable short-term results, but it is brand building that defends share at recovery. Concentrating everything on activation erodes mental availability and leaves the brand weaker when the market restarts.
Sources and references
- IPA, Field, P. Seven lessons for advertising during a recession. IPA.
- Analytic Partners (2022). Marketers Who Cut Spend Risk Losing 15% of Their Revenue During a Recession. Analytic Partners.
- LinkedIn B2B Institute. Advertising in Recession: Long, Short, or Dark? LinkedIn.
- WARC. Research on advertising effectiveness and share of voice. WARC.
