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  • Frank Gussoni

To Cut or Not to Cut? Which Budget Is the Question!

Updated: Jul 26, 2023

Times have been very tough for many industries this past year, due to the Coronavirus pandemic and many businesses are feeling the need to make budget cuts moving forward. Companies are now taking inventory of their expenditures and have started to re-allocate their budgets in order to “ride this thing out” and do their best to survive and grow.

Survival obviously is key but so many companies immediately get out their machete and one of the first budget cuts is made to their advertising and marketing budgets. But, before any company begins to hack these budgets like a lumberjack, it’s important that they analyze all budgets and slice and dice according to overall business health and relevance and many do not.

Many companies now take the posture that a penny saved is equal to making three more. While this is true for wasteful budgetary items more than ever, it’s not the time to go into hiding and hope that all ends well. As the owner of a media agency, I guarantee there are many ways to save money, without cutting your budgets to do so. For starters, analyze your departments efficiencies and overhead.

Unfortunately, many C-suites start by cutting ties with their agencies and marketing departments without weighing the “ripple effect”, or they move all media efforts internally, believing they’ll save money on commissions. But if they are working with a talented agency, eliminating them may cost their company in the long run. I know you’re thinking, “of course you would say that you own an agency!” But there are valid reasons, and they aren’t all self-serving. In fact, they typically are more beneficial to the client than the agency. Remember a real partnership means everyone is in it together. So, let me give you just a few of the many examples.

#1: They bring their A – Game negotiating skills.

Agencies, like mine, work with thousands of account executives at hundreds of media outlets in just about every area of advertising. With the relationships we’ve developed, comes the ability to talk their language, read into their offers and understand how to pit one against the other, when necessary for the best opportunities. Not only are we able to “play their game”, but we know how much time is needed to play it well. Proper negotiations can take days or even weeks of emails and phone calls back and forth, five, six, seven times or more, until the benefit of the media being offered realistically outweighs our clients’ expenditures. Maybe even more important is strong relationships are cultivated and sometimes an honest conversation between an AE and an agency can convince the media outlet to do “better” to continue the relationship during tough times. Most internal marketing departments don’t have the relationships, time, or insights to ensure they get the best value, and they don’t have the personal connections. They’re salary employees and there isn’t much extra in it for them, whether they overpay or not, unless their boss knows the difference, which typically they don’t. Putting your trust in a solid aggressive agency to do this work, will save you more than their commission costs.

#2: They watch your buys like a hawk.

So many folks think once the buy is made their work is done. Wrong! You’re about 35% completed. Making a media buy and getting a campaign running is only the beginning. Many media outlets will offer added value, or premium and discounted combined rates to get the business. Once the deal is made is another story. Many AE’s offer the sun and moon to get the business but don’t deliver because they know no one is going to be following every detail of the buy.

Being partnered with a great agency, they’ll have your back and know never to take their eye off the details because that’s where the differences typically lie. So, if the goal is to cut spending on your agency to save money by relying on an internal team to manage your campaigns, I’ll bet that many times the client isn’t receiving everything promised and loses more than they saved. And, as an FYI, many media outlets count on it!

Whether in bad times or good I completely understand the need to reduce costs and find areas to save money but starting by axing your ad and marketing budgets and dropping your agency may either lose you sales and profits or cost you more money.

These are only a few points to consider. Like the saying goes, “I’ve got a million of them”. Feeling bored? Drop me a line and let’s talk about how we can save you money and not sacrifice your true sales lead generator… advertising.



President & Founder of A3 media.

We’re Type A. We transform media from an expense into a smart investment.

Frank’s Take provides uncommon sense media buying advice for regional and mid-market businesses.

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President & Founder of A3 media. We’re Type A. We transform media from an expense into a smart investment.

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