I'm going to throw something out there. I believe there's a correction coming, and it's probably coming in the first half of next year.

I could be wrong, but there are too many things I’m seeing in the market that suggest otherwise.

Here's why. For the last two years I've worked with a business that sells a high discretionary product. In a really hard market, their sales held steady: flat, or a couple of percent up year on year. Six weeks ago they dropped 25 to 27%. Yes, it's a seasonal period. But after two years of holding the line, a drop like that is significant. I haven't seen anything like it, and I don't think it's just cost of living...

It isn't only one business. Look at the numbers.

• Rates keep going up. The Reserve Bank has lifted rates four times this year, to 4.60%, the highest since late 2011. Deloitte expects another rise in November.
• Consumers are rattled. Westpac's consumer sentiment fell to 80.4 in October. Among people surveyed after the September rate rise it was 67.2, a level Westpac says it has only seen in the depths of the early 1990s recession.
• Business is nervous too. NAB's business confidence sits at -13, in the bottom 5% of readings in the survey's history, and hiring is at its lowest in five years.
• Unemployment is rising. It hit 4.7% in September, the highest in about five years, and Deloitte has it peaking at 4.9%.
• Marketing jobs are going. In my own industry, I'm watching marketing roles disappear and not get replaced, and fractional CMOs (part-time marketing heads) brought in instead. Businesses cut people well before anyone says "downturn" out loud.
• Costs are being passed on. Fuel is up massively. StarTrack's fuel surcharge went from 15.5% to 22.7% in April, and every business moving product across Australia has to pass that on.

The economists are more polite about it. Deloitte says the risks "could... push Australia into recession in 2027", and that households will keep living through "recession-like conditions" either way. HSBC puts the odds of a technical recession at around 30%.

Call it a correction, a slowdown or a recession. Economists will argue about the word. I'm more interested in what you do about it.

So before you sign off next year's budget, here's the question I want you sitting with: when everyone else goes quiet, will you?

This is my take

Now the awkward bit. Yes, I'm a media agency telling you not to cut your media. I know how that sounds. So let me give you the reasons, not the pitch.

Earlier this month WARC reported that the world's biggest advertisers now spend 5.5% of revenue on ads, down from 6.1% in 2019. That headline will get used as permission to cut. Here in Australia I'm seeing the opposite. Brand spend is coming back, and not through the big guys. It's the smaller brands, the ones who've spent mostly on performance, who are working out what brand can do for them.

This is what I'm thinking

When the downturn comes, a lot of brands will pull back, and they'll pull back hard. That's the window. If you stay consistent while others go quiet, you pick up share of voice and share of market. In Peter Field's analysis of the 2008-09 recession, brands spending well above their share of market grew share about 4.5% a year, against about 1% for brands that weren't, and had five times as many big business results.

It isn't one study either. Across about 1,000 businesses in the PIMS database, brands that increased spend through a downturn gained 1.6 share points in the first two years of recovery. Brands that cut gained 0.7. Analytic Partners looked at more than 750 brands in the last recession: the ones that increased paid advertising saw a 17% lift in incremental sales, and the ones that cut risked losing 15% of their business to competitors who kept going.

My favourite is the oldest. In the Great Depression, Post cut its advertising. Kellogg doubled its, moved into radio and pushed a new cereal called Rice Krispies. By 1933 Kellogg's profits were up almost 30%, and it has led the category ever since.

And it gets cheaper to be heard. When advertisers pull out, media rates soften and inventory frees up. The brands that hold their budget get more for the same money. The media owners know it too, and the good ones will reward the advertisers who stick with them.

Where I'd push back

On the idea that "double down" has to mean spending more. It doesn't. Share of voice is relative. If your competitors cut by a third and you hold steady, you've gained share of voice without spending another dollar.

We've seen this before. During COVID, a Victorian white goods retailer I know well, a very good brand, didn't even have an e-commerce platform. They pivoted, invested heavily in TV, radio and digital, and came out of it with some of their biggest years ever. Part of that was people having money to spend. Part of it was simply telling people they were open while everyone else went quiet.

And, to be fair, a lot of this research comes from my side of the industry, and strong businesses can afford to keep spending in the first place. So I'm not saying spend blindly. Hold your share of voice, spend where it works hardest, and make every dollar earn its place.

This is what you should be thinking about

• Is it you or the market? If your sales have dipped in the last two months, find out what your competitors are doing before you touch the budget.
• What's your share of voice against your share of market? And what happens to it if you hold steady while your competitors cut?
• Have you asked your media owners what holding your budget buys you in 2027? Now is the time to have that conversation, not after everyone else has pulled out.

The takeaway...

Stay consistent, stay top of mind, and keep your ear to the ground.