Business is Already Booming! No Need for Marketing, Right?

One of the first things that businesses cut back on when they begin to see success is their marketing. Many business owners experiencing boosts in their sales take this measure thinking that it's a fairly safe way to reduce spending as they have sufficiently built up enough public trust, recognition, and customer loyalty to continue on without it. The reality of the situation, however, is not quite so simple. A well-known research report was released in 2018 by the Ehrenberg-Bass Institute for Marketing Science in Australia stating that when brands ceased their advertising for a year or more, the sales data showed a continuous downward decline. Another finding of the study was that small brands in particular were very susceptible to the consequences of ceasing advertising whereas larger, established brands would see less drastic changes over a longer period of time. Since the publishing of the report, the conversation around not just advertising but other components of marketing has yielded varied conclusions. So what’s a business owner to do?

Advertising is a major part of marketing and in modern times digital advertising has reigned supreme. A 2021 Forbes article written by marketer Dr. Augustine Fou discussed the results that brands of various sizes saw when they ceased digital marketing. Some of the brands in question included goliath companies P&G and eBay while the other half of the article discussed unnamed smaller businesses. Regardless of their size, the results were the same when they stopped spending on digital advertising - nothing. Nothing happened at all, except in the case of some small businesses that actually saw an increase in sales. The Forbes contributor still maintained however that digital advertising works but very often its effectiveness only extends to increasing superficial traffic, that is, traffic that indicates that potential customers have only briefly taken an interest in the business and it has not resulted in any sale or investment.

Besides advertising, other forms of marketing include but are not limited to: content marketing and social media marketing, successful forms of modern marketing which we’ve previously discussed; email marketing; search engine marketing; and more traditional types like telemarketing, public relations marketing, and referral marketing. Many studies and analyses by financial professionals assert that there is effectiveness in digital marketing outside of advertising which is evidenced by their continued employment by major establishments. Certain forms of traditional marketing have also retained their usage by companies. So what are business owners to take away from the studies, analyses, and examples set by major brands?

One overall conclusion that can be drawn from all the scrutiny of the effectiveness of marketing is that brands need to diversify their marketing strategies but not stop outright. Advertising, even in the digital space, may have mixed results during different periods of time for different sized businesses but other forms of modern digital marketing have proven effective at reaping consistent results, and even some forms of traditional marketing. The complete cessation of a business's presence in the public via marketing however is ill-advised. In 2019, Forbes and other business news outlets that year and in the years that would follow reported that the businesses that did not cut back on marketing during economic crises such as recessions, came out better for it than the businesses that made the decision to reduce or stop marketing. Various articles and studies have also emphasised the importance of raising and maintaining brand awareness for continued success. The famous business magnate Henry Ford once said that “Stopping advertising to save money is like stopping your watch to save time.”, and while the effectiveness of advertising in modern times is up for debate, the sentiment that cautions against ceasing to raise public awareness about your brand remains valid.