How to Recession Proof Your Ad Spend

Although marketing remains a pivotal practice that determines a brand’s success, many leaders feel like they have to reduce the size of their marketing teams to create a leaner organization. That’s why marketing leaders need to adapt—and avoid making hasty decisions.

Marketing leaders need clarity about available resources as they prepare 2023 budgets. But it can be difficult to confidently plan in advance, especially given the ups and downs of the last two years. The pandemic (and politics) will continue to impact businesses across the globe, but fortunately, there are many proven strategies for optimizing marketing budgets during uncertain times. Here are 4 of them:

Grow by expanding with current customers

Many companies put a hold on engaging with new suppliers during economic downturns. During these periods, a good way to meet budget goals is to find creative ways to expand your business with current customers.

The land-and-expand strategy is especially important when engaging new suppliers is difficult. Expansion revenue can be as much as 50% of new sales, and these opportunities often come at a much lower cost.

Deploy flexible goals

Admittedly, scenario planning is not effortless. But it should be something you fully embrace this year during budget season. Creating three to five scenarios of how things will go in 2023 will help you be better prepared for what’s to come.?

While you can still plan a year ahead, ensure the goals you’re making are scalable and ready to be moved up, or down, no matter what 2023 throws at you.

Identify untapped audiences

If you worry your existing audiences may undergo behavior shifts due to recession trends and shifts in 2023, stay ahead of potential performance issues by broadening your customer base.

Remember: Investors are often wary of increasing ad spend during a recession. However, mounting evidence indicates that recessions are among the best times to increase investment in marketing.

How? Well…

1. Noise reduction: Some marketers will cut their spending down to keep their jobs, which frees up space for those who don’t stop advertising.
2. Cost savings: When demand decreases for the aforementioned reasons, so do advertising costs.
3. Less brand loyalty: When brands stop advertising and staying top of mind, their customers forget about them, leaving the door open for competition.

Diversifying your segmentation and budgets will help your brand continue to succeed.

Fine-tune campaigns

Take a hard look at your performance metrics and devote energy to fixing the lowest performers. If you decide to make strategic changes, reallocate, rather than cut, budgets.

Your first instinct may be to examine your digital advertising campaign audiences and ad creative. When those appear to be working well, here are some other elements to review:

• Email and text message database audiences—which are also a good place to identify underserved segments
• Audiences segments with high CTRs, but low CvRs
• Landing pages with low conversion rates

Once you identify gaps, experiment and optimize to gain insight and work out the kinks before the recession hits. It doesn’t have to take years or months—AI and machine learning make it more possible than ever to obtain results without sacrificing performance.

Some of the most recognizable brands today found success because they seized opportunities. For example,

In the 1990-91 recession , Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.

Amazon sales grew by 28% in 2009 during the “great recession.” The tech company continued to innovate with new products during the slumping economy, most notably with new Kindle products which helped to grow market share.

What wins have you experienced over the last two years, despite uncertainties? We’d love to hear about them in the comments!

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