How Brands Can Survive and Thrive in a Recession

    How-Brands-Can-Survive-and-Thrive-in-a-Recession
    How-Brands-Can-Survive-and-Thrive-in-a-Recession

    For the marketing industry, the winners of a potential economic downturn will be those who play the long game and make data-driven decisions.

    As a recession approaches, many C-suite executives and marketers may turn to a familiar playbook – slashing marketing budgets and laying off employees to safeguard margins.

    That makes sense since, should a recession occur, both public and private enterprises will face more scrutiny. CFOs aim to maintain profits while minimizing acquisition costs. Reducing marketing spending may seem like the most sensible line of action. What if, though, they dared to act in the opposite way?

    A company can raise its visibility – as competitors cut back on communication – by launching a new product or increasing marketing spending during a downturn.

    It is true that, depending on the business executives, they may need to reduce their spending significantly. That’s okay, though, because there are still possibilities to invest in organic marketing channels, positioning brands for success when the inevitable recovery happens.

    Here are four steps that marketers and companies may take to boost marketing and promote growth:

    Focus on the Data at Hand 

    During a recession, businesses frequently cut back on marketing expenditures. However, data shows that such an approach is often ineffective.

    According to the 2020 ROI Genome report Future-Proof Your Brand: Marketing Through Crisis and Beyond” by Analytic Partners, brands that increase media investment during a recession experience a 17% growth in incremental sales, whereas businesses that reduce spending experience an average loss of 18% in incremental sales. Additionally, marketing can stretch every dollar further if media demand decreases during a recession. During the Great Recession, 54% of brands saw ROI improvements.

    Also Read: Tips to Improve B2B eCommerce Order Management

    Marketing leaders who wish to increase spending in a downturn may look like mavericks. However, marketing history would seem to support their position. Marketers can argue for increasing expenditure by pointing to evidence that decreasing advertising during a recession is not related to any rise in profitability and that increases in market share are larger as advertising grows during a recession.

    Meet the Audience Where They Are 

    Marketing budgets are always constrained, and during any economic downturn, firms must communicate with consumers even more precisely.

    The first steps in creating an effective marketing strategy are finding out where the customers are, which strategies are capturing their attention, what is top of mind, and how to interact with them while being sensitive to their issues. Brands must bring thoughtful optimism and empathy for challenges with inflation and other economic struggles.

    To capture the trust and attention of their audience, brands must step up their use of the necessary tools and messages. For instance, brands should purchase a moving ad spot on Connected TV if their audience is shifting their attention to that space. Brands shouldn’t give up on their long-term brand marketing efforts if they see organic audience growth because of their latest batch of branded content.

    To increase conversions, brands must choose a well-balanced mix that combines performance channels with brand storytelling.

    Also Read: Dispelling Four Common Fallacies About Digital Marketing

    Capitalize on the Less Crowded Space and Lower Costs 

    Because many competitors will lower their advertising budgets, advertising during a recession is more economical. Ad properties and space prices fall as demand declines, enabling marketers to reach their target audience more affordably. Brands can more readily stand out and grab market share when there are fewer competitors on the market.

    Brands should take advantage of the downturn to test channels with high demand, like CTV, launch digital campaigns, and drive traffic to their website to increase conversions.

    Focus on Long-Term Strategies

    Because organic strategies take over a year to drive returns and build audiences, they are excellent investments during a recession. Marketers who give up on those initiatives will be left behind when the economy starts to improve. Businesses that maintain investments will benefit from higher returns as the economy recovers.

    By using audience research, marketers can make organic investments that are targeted. They must be aware of what their audience is searching for, along with the keywords that will enable them to reach them organically and personalize content to their needs. As their audience grows, they will profit when their customers are prepared to spend.

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