Why You Shouldn’t Drop Your Marketing Budget in a Recession

Take a lesson from the business history books and make sure your dealership is on the positive side of those studies. You can bet studies will be done in the future about the companies advertising during a recession that made it through this recession and those that didn’t. You must make sure you have a strong script and the right people with the right training working your phones.

Instead, the company reassessed their offerings and figured out how to tempt customers. Previous recessions show that companies that invest in marketing efforts during an economic downturn outperform their competitors, so marketers can be in demand during economic downturns. Understanding that optimizing performance is their key lever to combating competitors and reaching consumers while they’re making purchasing decisions. And in today’s data-driven world, where granular, tailored messaging is possible, it’s possible to optimize ad spend to reach exactly the right consumers in the right ways.

Ricky's passion is to help companies with fine-tuning their MarTech stack to optimally impact revenue growth. Marketing in a recession is an exciting time for marketers who like to be challenged. The good news is that if you have a good marketing strategy, that you will beat the competition. The impact of a recession on marketing can be significant.

• Don’t get me wrong, I always think marketers should know exactly how much their campaigns are contributing to a business.
• You need to start architecting your advertising platforms to be prepared for the recession.
• Virtual events are a cost-effective way to drive a lot of value to your company.
• You should create an atmosphere of growth and set up teams where people can learn from each other.
• However, don’t limit yourself to written case studies on your website.

Advertisers Take Advantage of Travel Bug

The 2020 COVID-19 recession may have only lasted two months, but the impact it had on advertising was devastating. With the recent steady flow of gloomy economic data, many are preparing for the worst, and that could deliver a big blow to the robust advertising recovery following the 2020 downturn. During times of economic contraction, businesses tend to pull back on what is considered discretionary spending. Talk to our team about how Rockerbox can change the way you spend—for the better.

Groupon During the 2007 Recession: Find the Opportunities

Any unnecessary complication, whether a confusing interface or a lengthy checkout process, can drive buyers away. For subscription-based businesses, temporary plan downgrades or pause options can also be very helpful. According to data gathered by Baymard Institute, a lack of enough payment methods is among the leading causes of lost sales. Cart abandonment often comes down to limited or inconvenient payment choices. You can schedule account reviews to offer flexible contract terms or discuss how you can help clients weather the storm. Focus on nurturing those relationships through personalized email campaigns, loyalty rewards and exclusive offers.

That means you may be paying less for more in print, broadcast and digital advertising. By targeting your marketing dollars more precisely, you can preserve valuable resources while still reaching out to new audiences. What’s more, in an economic downturn, your customers are changing, too.

Their campaign, smartly named “Assurance,” offered consumers the chance to buy a car–and return it if they lost their job. When consumers are hit with job losses, pay cuts and a myriad of other economic uncertainties, history shows that they often fall into one of four mindsets. It is therefore crucial to evaluate the impacts of a recession on consumers before refining your message. Studies going back as far as a century show that long-term success is largely impacted by advertising. Expedia invested heavily in marketing throughout the pandemic, outperforming Airbnb, which pulled back its marketing in 2020, resulting in delayed recovery.

Adjust Your Messaging Strategy

A sharp recovery would be a departure from ‘normal’ recessions of the past, so the lessons from past recoveries may need to be reconsidered given this is an unprecedented, disease-driven downturn. Pandemic-based downturns tend to be v-shaped and during the last 100 years most have lasted around a year, according to the Harvard Business Review. With many employees now working from home, there is also likely to be a big impact on goods and services that support the workplace, unless they can pivot to support working from home. As we have seen in China, now is not a good time to be a sub-contractor for a business serving discretionary consumer markets (e.g. automotive). The effect on B2B markets will be complex, with many differing sector-specific patterns.

According to a study by McKinsey, companies that responded to changes in customer behavior during the recession had higher sales growth and profit margins in the years that followed. Another key aspect of recession marketing is to focus on marketing efforts with a measurable return on investment (ROI). According to a study by McKinsey, companies that focused on retaining their most loyal customers during the recession had higher sales growth and profit margins in the years that followed.

As they search, you can harness the power of your Google Business Profile (GBP) to capture premium real estate on Google search results and engage with local customers looking for you. Content Marketing is a great recession marketing strategy because the content you create will be an asset for years. This shift in the buying cycle means that your business can benefit from publishing more educational content to help customers determine how to find the best solutions for their needs. This means that lead time will increase, and customers will take more time to research their options to ensure they spend their money on the best value in marketing. As consumer spending contracts during a recession, consumers tend to take longer to research products and services before spending.

In the US, nearly 17 million people have lost their jobs, and there are approximately 10 times the number of new benefits claimants already than there were during the 2008 recession. People are not just fearful for themselves and their loved ones, but for their livelihoods. Intensity Score shows intensity with which any emotion is felt (from 1-3) and incorporates the proportion feeling neutral, who are assigned a score of zero. Companies should embrace generosity of spirit, humor, humility and spontaneity in their communications and working practices; these are values that will connect with people in the current climate.

An economic recession affects everyone, and consumers are no exception, as their jobs become at risk and inflation increases market prices.

That means you get more exposure, often for a smaller budget and less competition. When many brands go quiet, your message gets amplified. As the economy contracted, McDonald’s trimmed its ad spend and saw a 28% drop in sales, according to a Forbes article. According to McGraw-Hill’s “Laboratory of Advertising Performance,” AI Beta ProgramInsights & ResearchesCase StudiesBlogAntitrustSitemap We help brands maximize reach and improve efficiency so that you can grow market share, outpace competitors, and win the search.

Economic uncertainty has persisted in recent years, fueled by a spike in inflation and the ongoing threats of the COVID-19 pandemic. This article shows why marketing matters in a recession, with case studies of businesses that benefitted from leaning in to advertising. Put another way, people are not changing previous buying attitudes, they are simply prevented from exercising them. The appropriate tone of advertising in this recession may be different from previous ones and may change over time, so we need to keep a close eye on the live guidance provided by continuous market research studies. On the other hand, businesses supporting those that serve essential consumer markets, or the current colossal shift to working from home, are more likely to see smaller or even positive impacts. But these acts also help to keep the brands salient and hopefully create positive emotional associations that will prime or remind future purchasers when markets recover.