Looking for Marketing Strategies that Make Sense Now? We Can Help.

Businesses struggle with their spending strategy during an economic downturn, especially for marketing. Many companies slash their marketing budgets, thinking that the best way to last through a recession. In fact, the best way to make a business last through a recession is… to keep spending money on marketing.

Amid the recession following the 2008 financial crash, Reckitt Benckiser, a UK-based consumer goods company, launched an advertising campaign to persuade its customers to buy more expensive brands despite the hit to the economy.

By increasing their marketing spend, they were able to increase profits at a time when everyone else’s profits were going down.

During a recession, the advertising market is less crowded. That’s an opportunity for you to continue to build brand awareness without too much noise competing for attention. Brand awareness is when your customers recognize your company or product and form a certain association just from its name, and it’s pretty important. So important that the Institution of Practitioners in Advertising (IPA) recommends 60% of all your advertising should be to build brand awareness.

The rest should be “activation” marketing, or ads targeted at making consumers take immediate action (buy now, click here, learn more, sign up, etc.). It’s all right to decrease spending (a little bit) on activation marketing since demand is low, but spending on boosting brand awareness should stay the same or even go up.

In a healthy economy, the IPA recommends a 60:40 ratio between brand awareness advertising and activation advertising.

Take a look at what happened to companies that invested in marketing during the 2008 recession, versus companies that didn’t.

Note that although these companies experienced growth year-over-year, it took a while to build momentum. That’s because brand awareness advertising during a recession isn’t necessarily about turning an immediate profit. The rewards of marketing during a recession are greatest during the “recovery” period (when the economy starts to rebound). Marketing in the midst of a recession helps you capitalize on recovery.

Though profits may be delayed, the good news is that advertising costs are usually a little lower during a recession. So, you can achieve long-term growth for a bargain.

Digital marketing: cheap and effective, like discounted wine

The best place to invest during a recession is digital marketing. You can analyze data more easily and see the return on your investment more clearly. It’s also much more flexible and adaptable; it’s easier to pivot and take your strategy in a new direction whenever there’s a market development.

With digital marketing, small investments can pay off in big ways (see above discounted wine analogy). We see this clearly with video in particular, one of the most cost-effective marketing techniques. Videos are typically inexpensive to produce with a big return. Take Dollar Shave Club (DSC) as an example. You may know them as the irreverent razor company that popularized the shaving subscription model and curses a lot.

DSC launched in 2012, in the middle of a recession, but their launch video put them on the map. The whole thing is narrated by the CEO and uses a minimal number of shots edited together to present their value proposition in a blunt and energetic way. Although it was inexpensive to produce, it led to a surge in subscriptions for their new service, and instant brand awareness. Born in the wake of a recession, DSC continued to grow, and in 2016 Unilever bought them for $1 billion. That’s billion with a “B.”

Micro-influencers are another cost-effective way to generate brand awareness. They are typically less expensive than celebrity influencers (not all of us can afford millions of dollars per post to get one of the Kardashians to talk us up) and have between 1,000 and 100,000 followers. But the real value of micro-influencers is that because they have fewer followers, they usually have a closer relationship with them. They engage more and are more trusted sources of information and product recommendations.

What can you do now?

The economic dip caused by COVID-19 and quarantine measures was unique. There were unusual opportunities for brands to capitalize on house-bound consumers and increased use of TV, social media, podcasts, and online news channels. But the lessons we’ve learned from this and past recessions can still be applied to the future.

Partner with an experienced creative agency

Don’t go it alone. Copy & Art is a full-service creative agency that has helped guide clients marketing efforts through all kinds of economic environments.

Set up a meeting with us. We can discuss effective marketing initiatives that make sense for your business, based on your overall objectives.