For many businesses, 2025 looks to be an expensive year, and many brands will be assessing how they can cut costs to allow for growth. When rising costs and a loss of consumer confidence threaten, many businesses choose to cut their marketing and PR in hopes of saving money. However, research shows that such disinvestment can have long-term costs when it comes to brand awareness, customer loyalty and market share, and so it is important to continue investing into your Marketing and PR in 2025.

You don’t have to search far to find a gloomy prediction for the business landscape in 2025. Changes introduced by Rachel Reeves in her first budget – notably increases to employers’ National Insurance Contributions and the National Living Wage – will mean significant cost increases for many, on top of the rising inflation emerging at the back end of 2024. When you add Day One employment rights into the mix as well as the prospect of Donald Trump making tariffs a top priority as soon as he re-enters the White House, you have a recipe for a very challenging time for businesses from SMEs to corporates, from manufacturing to tech.

But, however bleak the forecasts, alongside the inevitable business casualties, there will be those that emerge stronger on the other side. These are typically businesses that best adapt to the changing circumstances. For brands that want to be on the winning side of this economic evolution, there are lessons to be taken from previous downturns such as investing into your marketing and PR in 2025.

Successful businesses invest in progressive marketing and PR strategies

Analysis https://hbr.org/2010/03/roaring-out-of-recession by Gulait, Nohria and Wohlgezogen published in the Harvard Business Review https://hbr.org/ concluded that businesses that emerge in the strongest positions out of downturns are those that adopt a progressive strategy, as opposed to prevention strategies (defensive moves focused on cutting costs and risks) or promotion-focused strategies (a bullish approach, investing in offensive moves to get ahead of the competition, but without analysing costs and addressing operational issues that could provide a competitive advantage in the long term).

The authors describe companies that adopt a combination of defensive and offensive moves as ‘pragmatic companies’, but they reserve the title ‘progressive’ for firms that achieve an optimal balance between the two.

They conclude:

“The CEOs of pragmatic companies recognise that cost cutting is necessary to survive a recession, that investment is equally essential to spur growth and that they must manage both at the same time if their companies are to emerge as post-recession leaders.”

The brands that are most likely to emerge as leaders when the economy picks up are those that adopt progressive strategies:

“These companies’ defensive moves are selective. They cut costs mainly by improving operational efficiencies rather than by slashing numbers of employees relative to peers. However, their offensive moves are comprehensive. They develop new business opportunities by making significantly greater investments than their rivals do in R&D and marketing, and they invest in assets such as plants or machinery.”

The trend is backed by strong economic indicators. According to Statistica, short-form video ad spending is projected to grow at a rate of 7.82%, reaching £4.91 billion by 2028. Demonstrating its significance for brand visibility moving into 2025.

For the communications industry, this represents a paradigm shift. Traditional formats and longer forms of storytelling are taking a backseat to more concise, visually dynamic, and instantly accessible content. To remain relevant, companies must adopt marketing and PR strategies that prioritise creativity, immediacy, and adaptability within the short-form video landscape.

This evolution also challenges businesses to find innovative ways to stand out in a crowded market while maintaining authenticity and resonating with their target audience.

The importance of tailoring recession marketing strategies to customers’ needs

In another article published in The Harvard Business Review, How To Market in a Downturn https://hbr.org/2009/04/how-to-market-in-a-downturn-2?referral=03759&cm_vc=rr_item_page.bottom, the authors Quelch and Jocz emphasise the importance of understanding the psychology of your customers to create marketing strategies that will resonate most strongly with them. They identify four customer profiles:

Slam on the brakes: The most vulnerable and hardest hit financially. In the current situation this may include many in the gig economy or those asked to take unpaid leave by their employer as they fight for survival.

Pained but patient: Resilient and optimistic about the long term, but less confident about short-term recovery or their ability to maintain their standard of living. Typically, this is the largest group of consumers, some of whom may migrate into ‘slam on the brakes’ if the situation continues.

Comfortably well-off: Typically, they feel secure about their ability to ride out the economic downturn, but may cut some discretionary spend.

Live for today: Normally young and urban, they carry on as normal and remain unconcerned about savings, however they often respond to economic uncertainty by extending their timetables for making major purchases.

Identifying the psychology of your customers can help brands devise marketing strategies that correspond with their concerns. For example, if your company has a high number of ‘slam on the brakes’ or ‘pained but patient’ customers, short-term, price-cutting strategies or offering smaller, more affordable purchasing options might help persuade them to continue to buy your product rather than look for a competitor who appears to offer better value.

Customers’ psychological profiling needs to be paired with whether your goods or services are essential, treats, postponables or expendables, as the different customer types are going to have different responses to where distinct categories of spending fit in their current situation and what messages will persuade them to include particular goods or services within their immediate budgets.

But Quelch and Jocz conclude that:

“On average, increases in marketing spending during a recession have boosted financial performance throughout the year following the recession.”

Understanding the emotional profile of your business’s target customers and their responses to different types of purchasing are important first steps. However, successful marketing strategies are going to need to be creative and authentic to keep your consumers engaged.

Finding opportunities for growth in 2025

No matter how difficult a situation is, there are always new opportunities to be seized. Marketing, sales and business development teams should be brainstorming how target clients might be reacting to the economic challenges, how they might have to adapt their work or home life, and how to position your brand as part of their solution.

These are undoubtedly tough times for businesses of all shapes and sizes – and in all sectors. Developing the right marketing strategies to capitalise on new opportunities that resonate with customers’ concerns is going to require strategic, creative thinking. But the evidence shows that when the going gets tough, the tough get marketing – and if you do it well, you can emerge the other side leaner, more competitive and with a bigger market share. so it is worth investing into your Marketing and PR in 2025.

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Based in Tunbridge Wells, Kent, Sharp Minds Communications offers brand development, digital marketing, offline marketing, and public relations to businesses across Kent, Sussex, Surrey, and Greater London.