The fastest way for an Australian business to lose market share in 2026 isn’t a recession. It’s the decision to cut marketing because one might be coming. The evidence runs forty years deep, the case studies are unambiguous, and most of your competitors are about to ignore both. That’s the opportunity.
If you’ve been part of a budget conversation in the last few weeks, the pressure is familiar. Consumer confidence has fallen to a record low. Fuel prices have jumped since the Iran war started. The RBA has lifted the cash rate twice this year, with markets pricing in more. Spending is softening. Boards are nervous. The instinct is to pull back, and marketing is usually first in line.
This post is about why that’s almost always the wrong call, and what to do instead.
Short answer: no. But the room feels like it.
GDP grew 2.6% over the year to December, and unemployment is still low at 4.3%. Economists put the chance of recession at around 20%. Australians, when surveyed, put it at over 60%.
The Americans have a word for that gap, vibecession. Australia’s in one right now. For marketing decisions, the distinction matters less than you’d think. The mistakes businesses make in a vibecession look identical to the ones they make in a real recession.
This isn’t a feel-good claim. It’s the most boringly well-evidenced finding in marketing.
The IPA, the UK’s Institute of Practitioners in Advertising, has tracked campaign effectiveness for decades. Their analysis of the 2008–2009 recession sits behind most of what’s now treated as accepted wisdom about marketing during economic uncertainty. Three findings stand out:
Peter Field, who led the IPA analysis, put it bluntly: brand advertising isn’t about profiting in recession. It’s about capitalising on recovery.
This is where most Australian SMBs get the calculus wrong. The instinct in a downturn is to cut anything that doesn’t generate a sale this week. Brand spend is the easiest thing to defend cutting, it isn’t measurable in the same way performance is, doesn’t show up as a lead next Tuesday, and doesn’t have an obvious ROAS attached. So it goes first.
The trouble is that brand spend is what makes performance spend work in the first place. When you cut the top of the funnel, the bottom dries up six to nine months later, and most boards never connect the two.
Most of the data on share of voice comes from large brands with seven-figure media budgets, and that’s a fair objection. If your monthly marketing spend is $5,000, the IPA case studies probably feel like they’re describing a different planet.
The principle still holds. It just looks different at a smaller scale.
Share of voice for a Melbourne plumber isn’t measured against Coles. It’s measured against the four other plumbers bidding on “blocked drain” in the same suburb cluster. If two of them pull spend in the next six months, your share of voice grows even if your budget stays flat. Same mechanic, smaller arena.
The brand-vs-performance split looks different, too. A trade business doing $30k/month in revenue probably can’t justify a 60/40 split in favour of brand; most of the work is bottom-funnel for a reason. But the same business cutting their Google Ads budget by 30% in a soft month, then watching the phone go quiet six weeks later, is running the exact same play that’s failing the bigger brands. The scale is different. The mistake is identical.
The good news for smaller businesses: agility. A national brand can’t reshape its offer or message inside a week. An SMB can. Customer conversations move faster, decisions get made in one meeting instead of six, and tests run inside a quarter rather than a year. That’s a real advantage in a downturn, if it gets used.
This is the part that doesn’t get talked about enough.
When a meaningful chunk of your category cuts ad spend, the cost of being seen drops. Auction prices on Google, Meta and YouTube soften. Programmatic CPMs come down. Share of voice, the slice of category advertising your business owns, gets cheaper to acquire. The same dollar buys more reach.
That’s a structural opportunity, and it disappears the moment the downturn lifts.
In practice
A Melbourne-based professional services client cut their Google Ads budget by 40% in early 2025 when leadership panicked about a downturn that didn’t fully arrive. They held the lower budget for nine months. In the same period, two of their three main competitors held steady spending, and one increased it.
The cost-per-lead numbers looked fine while the cuts were in place, fewer leads, lower spend, ratio stable. The damage showed up later. By the time leadership wanted to scale spend back up, branded search volume had dropped meaningfully, and direct traffic had thinned. They were paying more to reach the same audience because their share of voice had shrunk, and competitors had grown theirs in the gap.
That’s the pattern. The cuts feel responsible in the moment. The cost surfaces six to twelve months later, in numbers nobody connects back to the original call.
The IPA’s optimal split for most categories is 60% brand, 40% performance, which marketers refer to as the 60/40 rule. Most Australian SMBs sit closer to 20:80 in practice. Some are at 10:90. That’s already below the danger threshold before any downturn is factored in.
Here’s the comparison most leadership teams run in their heads, and what typically happens:
|
Approach |
What people assume |
What typically happens |
|
Cut brand, hold performance |
Same leads, lower total spend |
Performance costs creep up over 3–6 months as branded search drops |
|
Cut performance, hold brand |
Risky for short-term revenue |
Defensible if the pipeline is healthy and the business can ride a softer lead flow |
|
Cut both proportionally |
Conservative, balanced |
Worst of both worlds, share of voice collapses, performance loses its base |
|
Hold both, shift mix toward the brand |
Counterintuitive in a downturn |
Strongest position in recovery, if cash flow allows it |
The right answer depends on margin, runway, and how exposed your category is to discretionary spending. But the wrong answer, the one most often defaulted to, is the proportional cut. It’s the option that sounds prudent in a board meeting and erodes market share quietly for the rest of the year.
Strip out the noise, and the levers that move outcomes are short:
What matters less than people think: shifting to a new platform, rebuilding the website, launching a content programme that won’t compound for nine months. The downturn will likely be over before any of it pays back. Treat marketing as an investment with a known payback window, not an expense to be optimised away.
Most of the damage in an Australian downturn comes from a small set of repeat mistakes.
The first is cutting brand spend ahead of anything else. It’s the easiest cut to defend in a board meeting and the most expensive over twelve months. The second is switching all spend to bottom-funnel performance, which works when demand is healthy, but in a downturn just inflates auction prices against a smaller pool of in-market buyers. The third is going dark on the brand entirely. The IPA data is unambiguous on this one: brands that disappear from view recover share more slowly when conditions improve, and some never fully recover it.
There are two subtler ones that matter just as much.
Treating uncertainty as a temporary pause rather than a behaviour change is one. Customer priorities shift in a downturn, what they value, what they trust, and what makes them hesitate. The messaging that worked in 2024 might not be the right pitch for the same audience in late 2026. The other is not asking customers what they need. How can we help? It is a serious commercial question, and most competitors won’t bother asking it.
If marketing budget conversations are coming up in the next month or two, the move isn’t to cut. It’s to audit properly and reallocate.
A useful sequence:
The Australian businesses that look strongest in late 2027 won’t be the ones that cut hardest in 2026. They’ll be the ones who held their nerve, got specific about what to cut, and used the gap their competitors created.
If you’d like to look at how this applies to your business, where the genuine waste sits, where the share-of-voice opportunity is, and what to hold steady through 2026, speak with our Melbourne team. We work with Australian SMBs on exactly this kind of audit and reallocation.
