Dive Brief:

• More than half (60%) of brands that increased media investment during the last recession saw ROI improvements, according to the latest ROI Genome Intelligence Report by marketing intelligence provider Analytic Partners. 
• While brands that increased paid advertising saw a 17% rise in incremental sales, those that cut spending risked losing 15% of business to competitors that boosted their spending. The report also found that brand messaging outperforms performance messaging 80% of the time.
• The latest report from Analytic Partners suggests that the conventional wisdom around cutting paid ad spend and marketing headcount at the first sign of a recession actually undermines margins and efficiency.

Dive Insight:

The latest ROI Genome Intelligence Report from Analytic Partners, "How to Maintain Advertising Effectiveness in Challenging Times," provides some data points for marketers looking to pushback against calls for cuts to media spend as rising inflation has stoked fears of a coming recession. 

The report's central holding is that increased media and marketing investment during the last recession caused ROI improvements and increases to incremental sales. In addition, those brands that increased marketing spend saw ROI growth in back-to-back years. This runs counter to the idea that the marketing department should be the first to see cuts during macroeconomic hardship.

"The best way to get through a possible recession and prosper on the other side of it is to think long term by investing in your brand and your relationships with customers," said Mike Menkes, senior vice president at Analytic Partners, in a press release. "Short-term thinking might make some shareholders happy at the next earnings report, but it undermines growth and therefore margins and true shareholder value over both the short and long term."

Beyond just investment, the report contains several findings about specific channels and strategies. When balancing brand and performance marketing, the report suggests the former outperforms the latter over the long-term, despite short-term boosts provided by product- or promotion-focused advertising. Similarly, two-thirds of the quality of a video impression is driven by creative, not executional elements like targeting, placement and timing.

Analytic Partner's ROI Genome analyzes hundreds of billions of dollars in marketing spend and millions of marketing and measurement metrics over a global footprint that covers more than 50 countries. The company has often stressed that marketers should avoid short-term thinking like cutting spend during recessionary periods, like when the coronavirus pandemic first battered the economy in 2020.