COVID-19 Recession: How PR & Marketing Can SurviveCOVID-19 is delivering a body blow to PR and marketing agencies and departments. The near shut-down of the travel and conference industries, the stock market collapse, and closures of hotels, bars, restaurants and other business has hit the economy hard.

As clients slash PR and marketing budgets, reports of layoffs and pay cuts at marketing and PR agencies are circulating. Some agencies fear they won’t survive the expected recession. In-house staff fear lay-offs or furloughs.

Many PR and marketing veterans who survived previous recessions urge businesses not to panic and to maintain their PR and marketing budgets. Those that maintain or increase PR and marketing spending now will seize market share while others pull back – and win in the long run.

Knee Jerk Reactions

“I’m seeing some alarming accounts from marketing and SEO friends of clients pulling their contracts and shutting down marketing operations until further notice,” writes content marketer Miranda Miller at, in Search Engine Journal. “This knee-jerk reaction is setting your business up for a long-term, uphill struggle to recover.”

Businesses with $1 to $5 million in sales per year should spend 7-8% of gross revenue on advertising and marketing, according to the U.S. Small Business Administration, Miller says. It’s critical for businesses to maintain that bare minimum throughout the coronavirus crisis. Whether you’re working with an agency or handling marketing in-house, now is the time to address key SEO and marketing tasks, Miller stresses.

Double Down Now for Future Gains

Even if numbers of new COVID-19 infections soon drop, businesses will struggle to recover for more than a year, predicts Neil Patel, co-founder of NP Digital and Subscribers. Organic traffic and conversions are down for most industries, down substantially for some, according to data from Patel”s Ubersuggest SEO tool.

Despite the economic difficulties and slashed marketing budgets, those who invest in marketing now can seize market share.

“The best time to double down is when others are not,” Patel says. “You may not see the biggest return right away, but in the long term, you will.”

“Now is the time to be proactive and convince your clients that your services are even more important now than before,” agree Art Stevens, managing partner, and Rich Jachetti, senior partner at The Stevens Group, in O’Dwyer’s. However, be prepared to present affordable budgets. PR firms will need to scrutinize their budgets carefully and take cost-cutting measures to survive. Rather than laying off staff, PR agencies can ask senior managers for salary reductions over the next several months.

Cut the Fees. Keep the Client?

The situation is much like the 2008 recession when businesses cut marketing budgets by 30% or more, says Darren Woolley, founder and global chief executive of TrinityP3 in the Drum. Wooley suggests that marketers prioritize work required in order to continue investing in the essential brand and business growth areas and cut activity that provides no direct returns.

In the last recession, marketing agencies gladly provided clients a discount on fees – sometimes as much as 30% — to keep their work. Better to take the cut than to lose the client, they figured. Plus, clients in return would allow valued agencies to recover income when good times returned, they thought. They didn’t expect that procurement would accept the 30% reduction as the new benchmark. It’s not clear, Wooley says, if agencies will again accept such a reduction. Many may now agree it makes good business sense.

Bottom Line: Communications agencies and in-house PR and marketing departments will need to reduce budgets to survive in an economy sickened by the COVID-19 virus. However, businesses that maintain healthy PR and marketing spending will win market share over the long term, predict people who experienced similar tough times in the past.

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