How to Deal with Marketing Budget Cuts and Still Get Growth

Originally published in Chronicles of Change, July 2023.

Every CMO has faced it: the email from Finance, the awkward call with the CFO, the spreadsheet that says you need to do the same — or more — with 20% less. Marketing budget cuts are a recurring reality, not an exception. The question isn’t whether they’ll happen, but how you respond when they do.

The Reflex vs. The Response

The instinctive reaction to budget cuts is to slice proportionally across all programmes. It feels fair. It’s also the worst possible strategy. Proportional cuts preserve the status quo in miniature, keeping underperforming programmes alive while starving your winners.

Instead, budget pressure should be treated as a strategic forcing function — an opportunity to ruthlessly prioritise what actually drives growth and cut what merely feels productive.

A Framework for Strategic Cuts

1. Audit for Impact, Not Activity

Map every programme and channel to its actual revenue contribution. Not leads generated (a vanity metric in most B2B contexts), but pipeline influenced and revenue closed. You’ll likely find that 60-70% of your budget drives 80-90% of measurable impact.

2. Identify Your Growth Engines

Typically, two or three channels or programmes disproportionately drive results. These are sacred. Protect them, or even increase investment. Growth during austerity comes from concentration, not diversification.

3. Rethink the Agency Model

Agency spend is often the largest discretionary line item. This isn’t about firing your agencies — it’s about restructuring engagements. Move from retainer-based relationships to project-based ones. Bring high-frequency execution in-house. Use agencies for strategic thinking and specialist capability, not for work your team could do with the right tools.

4. Invest in Measurement Infrastructure

Counterintuitive during cuts, but essential. If you can’t measure it, you’ll cut the wrong things. Even modest investment in attribution modelling and pipeline analytics pays for itself by directing scarce resources to proven channels.

5. Embrace the 70/20/10 Model

Allocate 70% of your reduced budget to proven performers, 20% to promising experiments, and 10% to genuine innovation. This maintains your growth engine while preserving the experimentation that prevents strategic stagnation.

The Human Element

Budget cuts affect people, not just programmes. Be transparent with your team about constraints and priorities. The worst thing a leader can do is pretend everything is fine while quietly hollowing out resources. Your team already knows. Give them the context to make smart trade-offs themselves.

The Growth Paradox

Here’s the counterintuitive truth: some of the best marketing work happens under constraint. Unlimited budgets breed lazy thinking. Constraints force creativity, prioritisation, and focus. The CMOs who thrive through austerity are those who treat budget cuts not as a setback but as a strategic reset.

The question isn’t “how do we survive with less?” It’s “what would we do differently if we were starting from scratch with this budget?” Often, the answer is: something much better than what we were doing before.