1) The document discusses how reducing marketing budgets during an economic downturn does not make sense. It notes that Singapore is entering an economic downturn, with GDP growth slowing. 2) It argues that cutting the marketing budget will result in lost sales that are difficult to regain, and may require even higher spending to make up for. The relationship between marketing spend and sales is proportional. 3) Instead of cutting budgets, the document recommends fine-tuning marketing strategies and focusing on revenue-generating activities. It also suggests hiring a full-service agency to handle marketing tasks more efficiently than trying to do it all in-house during difficult times.

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MARKETING
PARADOX
WHITE PAPER

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Marketing in an Economic
Downtown
Why reducing marketing budgets during an economic
downturn does not make sense.
Robert Cristobal | BAM! Content Strategist April 4, 2015
BAM! Marketing Downturn Paradox
www.bam.works

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Abstract
Singapore is entering an economic downturn.
“2015 GDP growth is still the lowest since 2009’s -0.6% performance.
The 4Q2015 GDP figure brought the full year growth to 2.1% which is close to the official growth
forecast of “close to 2 percent” but is nevertheless a moderation from the 2.9% growth registered
in 2014.”
Singapore Business Review
http://sbr.com.sg/economy/exclusive/what-expect-in-2016-singapore-economy-hits-slowest-growth-
2009#sthash.DHAx9s7n.dpuf
“The 2015 outperformer remained services which accelerated from 3.2% growth in 2014 to 3.6% last
year, followed by construction at 1.1% (2014: 3.0%), whereas the 4.8% drop in manufacturing was
the worst since 2001 (-11.6%).
Selina Ling, OCBC Treasury Research
Report of the ECONOMIC COMMITTEE
THE SINGAPORE ECONOMY: NEW DIRECTIONS
https://www.mti.gov.sg/ResearchRoom/Documents/app.mti.gov.sg/data/pages/885/doc/econ.pdf
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Introduction
Global economy stories and economic data point to one uncomfortable truth - we are heading for
a huge downturn. Between the sovereign debt crisis in Europe and The Bubble bursting in China,
these are just the right ingredients of a perfect storm to send the economy over the edge. These
observations might be less obvious to the middle class and for us here in Singapore, unemployment
the drop in the retail industry is enough for us to get our piece of the “scare.”
“Minister for Trade and Industry S. Iswaran pointed out that manufacturing firms need to shift from
adding value to creating value. This means that Singapore companies need to do more than just
make components for bigger firms. They need to innovate and invent new products that they can put
their name on.” - MoneySmart.sg
Retail & manufacturing are just two of the industries that will face a tougher 2016. If history is any
indication, their first action will be to cut their spending drastically to survive.
But does it make sense to cut your marketing budget and then expect an increase in sales? Or even
status quo?
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Background/
Problem Statement
Let’s say your marketing team has a marketing budget of $1 for every $100 sales target. And to meet
that target, your marketing strategy has to be consistent, even the budget should, for the most part,
stay the same. Cut $1 from your marketing budget and you will be forced to do drastic, unplanned,
and disorganized measures to catch up on the loss of $100 sales. We’re only talking a dollar of
marketing budget here.
Scale that up to your actual marketing budget and you begin to see the bigger loss. How much
marketing budget do you have for a year? $100,000? That aims to get $10M in sales? Cut your
budget in half ($50,000) and you realise there is little room for the imagination to find that $5M sales
that you just lost by slashing your marketing budget. In the end, you must spend more.
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Solution
Are we looking at a marketing stalemate here?
What are your options as a business owner? Should you just pack your bags and use whatever is
remaining in your purse to jet off to that dream vacation of yours?
Or should you reposition your strategy?
The companies who have an internal marketing team with them would just need a shift in the mind
set. It’s a matter of fine-tuning your strategies and re-focusing your efforts on activities that generate
revenues. You might consider retaining a third party consultant to guide you in the process if you feel
that your Marketing Director is capable of making that mind-set shift without cutting the budget. That
will provide them with that much-needed support in these tough times. There is no room to play the
blame game here.
If you are a smaller company who depends on third party providers, your whole marketing strategy
might be difficult to manage if you are making the shift.
Let us look at the scope of work you need to cover
Internal
- The first thing you need to settle are your goals; economic downturns make goals farther and
bigger when it used to be just around the corner and measurable. You need to sit down with all the
stakeholders and make sure they are all in the same boat. Should you have a shift in the strategy,
you need everyone on your team to understand what this will take and that you can do this without
cutting your budget; thus, you don’t end up spending more.
Branding
- Once you have a game plan, it will require you to go back and forth to your branding provider.
Your collaterals need to be scaled down, you need to design for usability for more channels, and
if you are used to writing one blog post a month, you might need to write more for your inbound
marketing. Doing so would require the branding provider to create more collaterals for you, and to
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check that your messaging is in line with your original branding message.
Content
- If you are used to paying for each piece and type of content you use on your marketing, then
you would need to change your strategy. The conversation should be how much more content can
you create with the same budget? Is this even possible? Yes, with the right brains on the team,
this is definitely within reach. Again, your usual route would be to pay for each content that you are
creating. Instead, why not pay for a strategy of creating more content rather than a per-content
transaction?
Digital Marketing
- Yes, the one thing that should rule your marketing efforts. Do you create fewer display ads? Do
you create fewer lead-generation activities? How do you make sure that you are on top of all these
tasks while juggling whatever is left of your company to run? Will you have time to look over the
shoulder of your marketing vendor to check their work?
Events
- Your customers need to experience your products in a tangible and creative way. Should you
let go of your regular product launches, activation, and customer engagement activities? Probably
because you don’t have much choice. This will be tedious for you with respect to logistics.
That is a lot work you need to cover. And in a downturn, this might be a huge feat for you to
accomplish especially with a tightening of your budget.

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Conclusion
Or ... your better option is to hire a team of experts who can provide these and more for you.
Obviously doing so would require separate teams (more money you need to spend). The good news
is there is a full-on team that can do all these tasks for you. A team of experts that can provide
consultancy to guide you and have the competence to execute a complete strategy through their
combined portfolio.
Tough times are ahead definitely, but it’s a matter of responding in the right way that will help
you make the best of it. It may require you to make unpopular decisions, but the outcome will be
positive. The next step? The shift of mind set has to start with you.
BAM! Marketing Downturn Paradox
www.bam.works
61 bukit batok crescent #04-01A singapore 658078
contact : chris dawson, +65 8282 3935
www.bam.works