If your phone has gone quiet, buying more ads is the wrong move

I have watched four recessions from inside marketing departments, and the reflex is always the same. Revenue softens, the phone goes quiet, and somebody says we need to spend more on advertising. Sometimes that is right. This year, for most businesses, it is wrong — and the numbers say so more clearly than they usually do.

What the budgets actually show

Marketing budgets are at 9.0% of company revenue, the lowest share since 2021, and growing at 1.7% a year, the weakest rate since 2021. That part is expected in a tight economy.

The part that should stop you is where the smaller budget is going. Paid media now takes 31.4% of marketing spend — a five-year high, up from 25.1% in 2021.

So the average business is putting a larger share of a smaller budget into rented attention, while a quarter of the whole budget goes nowhere at all. That is not a spending problem. It is an allocation problem being solved with a credit card.

Why more ads is the wrong reflex this year specifically

Not because advertising stopped working. Because you have less control over it than you did a year ago, and it costs more to reach the same person.

In September, Google began automatically migrating broad-match and automatically-created-asset campaigns to AI Max, and removed campaign-level language targeting from Search and Performance Max. Microsoft made its own AI Max generally available and switched it on by default for new campaigns. Meta moved competitive and audience insights behind a paid subscription.

Every one of those changes moves a dial out of your hands and into the platform's.

Meanwhile 39% of marketing leaders cut agency budgets, and acquisition spend now runs 26% ahead of retention — businesses buying new customers harder while spending less on keeping the ones they have. In a tight year that is precisely backwards.

The one channel you cannot outbid

Here is the asymmetry, and it is the most interesting thing in marketing right now.

When a customer asks an AI assistant for a business like yours, the names it gives are not for sale. ChatGPT carries advertising now, but the ads sit in a labelled box below the answer — the recommendation itself is assembled from evidence. Consistent facts. Independent sources agreeing about you. Structure a machine can read.

Which means a two-person firm and a company with a seven-figure media budget compete on the same terms. The large one cannot buy the position. I cannot think of another channel in marketing where that is true, and it will not stay true forever.

If your budget is under pressure, this is the channel that rewards you for being careful rather than for being rich.

What to do if money is tight

In order, and the first several cost nothing but attention.

Find out whether you are invisible before you spend anything. Ask ChatGPT and Gemini the question your customers ask. If you are not named, more advertising will not fix that — you will be paying to appear beside an answer that recommends a competitor.

Make your details identical everywhere. Name, address, phone, category. Not similar. Identical. This is the least glamorous work in marketing and it outperforms most of what sits above it on the invoice.

Complete your Google Business Profile. Every field. For a local business it is worth more than a month of ad spend and it costs nothing.

Ask five happy customers for a review. Not a campaign. Five emails.

Then audit what you are already paying for. If only 56% of purchased software is used industry-wide, some of yours is not being used either. Cancelling one unused subscription funds a quarter of the work above.

When to hire someone, and when not to

I will be direct about my own position here, because a consultant telling you to spend money in a hard year should have to say where the line is.

Do not hire anyone if you have not done the five things above. You will be paying someone to do work you could have finished in a weekend, and a good consultant will tell you so and lose the engagement.

Do not hire anyone if your problem is that customers arrive and do not buy. That is a pricing, product or sales problem wearing a marketing costume, and no amount of visibility fixes it. Visibility brings more people to the same result.

Consider hiring someone when you have done the basics, you are still not being named, and you cannot work out why. That is usually an evidence problem across sources you do not control, it takes judgement to diagnose, and it is genuinely hard to see from inside your own business.

And hire someone if the cost of staying invisible for another year is larger than the fee. For most businesses in a slow market, it is — but you should be able to say roughly how much larger before you sign anything.

Common questions

Should I increase advertising spend when business is slow?
Usually not first. Marketing budgets are at 9.0% of revenue, the lowest share since 2021, while paid media has risen to 31.4% of spend, a five-year high — so businesses are putting a larger share of a smaller budget into rented attention. Around 26% of marketing budgets are wasted on unused software and mistargeted spend. Check whether AI assistants and search name your business at all before buying more advertising, because paying to appear beside an answer that recommends a competitor is expensive.

What marketing work costs nothing when budgets are tight?
Five things. Check whether AI assistants name your business when asked your category question. Make your name, address, phone and category identical everywhere they appear. Complete every field of your Google Business Profile. Ask five satisfied customers for a review. Then audit existing software subscriptions, since only about 56% of purchased marketing technology is ever used industry-wide.

When should a struggling business hire a marketing consultant?
After the free foundational work is done, not before. Do not hire anyone if the basics are undone, or if the problem is that customers arrive and do not buy — that is a pricing, product or sales problem that visibility cannot fix. Consider hiring when the basics are complete, you are still not being named by AI assistants or search, and you cannot determine why. That is usually an evidence problem across sources you do not control.

The thing about a slow year

Every downturn I have worked through has rewarded the same behaviour, and it is never the dramatic one. The businesses that come out ahead are not the ones that spent hardest or cut deepest. They are the ones that used a quiet period to fix the unglamorous things — the details that were wrong, the systems nobody had checked, the questions customers ask that nobody had answered properly.

That work is cheap, it compounds, and it is almost impossible to do when business is booming and everyone is busy. A slow quarter is the only time you get to do it.

Four decades in, that is the only pattern I would bet on.