There’s something almost ritualistic about it. Every time a crisis looms – be it the financial crash, the pandemic, or today’s inflation and geopolitical unrest – one thing happens with near-unsettling precision: the marketing budget gets slashed.
Campaigns are paused. Projects postponed. Creative ideas that might have shaped the future are shelved. All while spreadsheets take over the decision-making – and the message is simple: “cut back.”
But perhaps it’s time to ask whether we’ve misunderstood something fundamental?
A Familiar Pattern – With a Price
Peren Özturan, Associate Professor at the Department of Marketing at CBS, has studied how companies respond during economic downturns. The picture is clear:
“In times of crisis, marketing is often the first casualty. Many companies fall into analysis paralysis and fail to recognise the opportunity to invest in future growth,” she explains.
This is backed by Gartner’s 2024 CMO Spend Survey, which shows that marketing budgets among large companies fell by 15% from 2023 to 2024. Today, marketing accounts for just 7.7% of company revenue on average – a drop of nearly 30% compared to pre-Covid levels. The survey is based on responses from 395 marketing leaders at large organisations based in North America and Western Europe – the very regions where the majority of the world’s marketing agencies are located or primarily operate.
Despite average global economic growth of around 3% annually over the past five years, it has been emerging markets such as India, Vietnam, and Indonesia driving this growth. The advanced economies – including the US, the EU, and Japan – have recorded far more modest growth rates over the same period.
So why is it a mistake to cut marketing?
Because downturns are when the market reshapes itself. As competitors retreat, it’s those who invest in visibility, relationships and long-term relevance who define the landscape once recovery begins. Marketing isn’t just noise – it’s navigation.
The Marketing Industry Is Not What It Was
The past decade has been brutal for marketing agencies – particularly those clinging to legacy models. From the shock of the pandemic to inflation and falling consumer confidence, many have been forced to question their very reason for being.
According to Forbes, the industry now faces a “hypercompetitive reality” where survival demands more than minor tweaks – it calls for wholesale reinvention.
That’s why we’re seeing agencies rebrand themselves as consultancies. Freelancers building personal brands on TikTok and LinkedIn. And a marketplace where AI and automation are both a threat and an opportunity. On the one hand, margins can improve. On the other, competition is intensifying. Marketing is no longer about catchy slogans – it’s strategy. It’s data. It’s business.
So should agencies stand firm – or continually adapt?
Agility: Buzzword or Business Lifeline?
The word “agility” gets thrown around a lot – and can easily sound like consultant-speak dressed in Post-it notes and buzzwords. But when Özturan talks about marketing agility, she means something concrete: the ability to read the market quickly, make decisions quickly, and act quickly.
A study published in the Journal of Marketing describes it as a critical leadership competence in today’s marketing landscape. Not just in theory – but in practice. Because when markets move fast (and they do), it’s not necessarily the biggest companies that survive – but the ones that adapt most effectively.
Forbes echoes this. Small adjustments won’t cut it. Agencies that thrive in the future will be those who narrow their focus, build niche expertise, invest in proprietary AI tools, and develop distinct, trusted brands. Thought leadership, technical depth and specialisation aren’t just “nice to haves” – they’re essential in a landscape shaped by consolidation, competition and constant change.
A New Paradigm on the Horizon
But what lies on the other side? Is there any reason for optimism?
Özturan believes there is:
“I’m optimistic. New business models like the circular economy, the sharing economy, and the creator economy point to a new economic paradigm – one that moves beyond the 20th-century capitalist mindset, but still holds great promise for the marketing industry.”
How long the lean times will last – and who will come out on top – remains to be seen. In the meantime, agencies and marketing professionals might do well to hope that more businesses choose to invest in marketing rather than retreat from it.
