Why recession is the best time to increase brand visibility or launch a product?

I wrote this on the 25th of December 2023. I have been meaning to write this since December 2022. Funnily enough, the only thing that has changed is the probability of brands increasing their visibility if they are advertising. Or the chances of survival of a new product being launched have gone up. This is because I believe we have been in a recession-like economic downturn for a while with high inflation, rising interest rates, and a slowing global economy. But by the end of 2024, we might start coming out of it.

A recession or economic downturn is when consumer trust is at its lowest. Not a lot of brands including your competitors will be spending on brand-building advertising. This is your moment to seize and get ahead.

It is not just existing brands but also new products that benefit. A recent study published in Harvard Business Review (HBR, September-October 2023) suggests that a recession is a good time to launch new products or startups. This sounds so counter-intuitive. One would think, that people have less money to spend, and consumer confidence is low but history has shown that products and companies launched during a recession are more resilient and have higher odds of success.

Below I give insights and my commentary on both brand building and product launches during recessions in two sections.

Section 1: New Product Launches During Recession

The HBR article covers a study that analysed 8,981 product launches in the U.K. in 20 fast-moving consumer goods categories, from 1995 to 2012 along with 1,071 product launches in the U.S. auto industry from 1946 to 2008. Information on the UK launches was gathered from AiMark, a Netherlands-based marketing organisation, and collected data on U.S. launches from sources including Automotive News and the New Encyclopedia of Motor Cars. Finally, they looked at the data from the UK Office for National Statistics and the U.S. Bureau of Economic Analysis to track recessions in each economy as well as publicly available data on each product’s sales, marketing share, and life span. Key insights:

• Even discretionary product launches for non-essential purchases do well.
• A recession might be an ideal time to launch your product no matter what it is.

Products launched during a recession survive longer. UK consumer products launched during a recession survived 14% longer, on average than comparable products launched during non-recessionary periods. Similarly, automobiles launched during recessions in the United States survived 19% longer than cars, introduced during economic expansions.

• Products launched late in a recession fare better than those launched early on.

The reasons for this could be:

• Less noise in the marketplace, making it easier to differentiate products and draw consumers’ attention.
• The cost of running ads is often lower, providing more bang for the buck.

Some brands you will know of that launched during tough recession times include the likes of:

• Microsoft (1975): Founded during the 1973 oil crisis recession.
• Apple (1976): Established in the midst of the mid-1970s recession.
• Airbnb (2008): Conceived during the Great Recession.
• Uber (2009): Also born in the Great Recession.
• Walt Disney Company (1929): Launched just months before the stock market crash.
• Hewlett-Packard (1939): Founded during the Great Depression.
• FedEx (1971): Launched in the early 1970s recession.
• General Electric (1892): Founded during the Panic of 1893.
• Hyatt Hotels (1957): Established during a recession.
• Salesforce (1999): Launched during the dot-com bust.
• PayPal (1998): Founded during the Asian financial crisis.

Section 2: Brand Visibility During Recession

Video Link: https://youtu.be/rG1gfQqyJoU

You want more people to know about your brand. Recession could probably be the best time to do so for many reasons.

• Reduced competition: Many brands would cut back on marketing during economic uncertainty. If resources allow, you should maintain your advertising spend or even increase it. The more consumers see your brand and less of your competitors, there is a higher chance that when your competitor starts to spend again you still will maintain a higher degree of trust with the consumers as they will remember seeing you during the tough times.
• Increased consumer attention: Consumers tend to be more price-sensitive during a recession, making them pay closer attention to brands and their messaging. A well-executed campaign can resonate with their concerns and build trust, leading to greater brand loyalty.
• Opportunity to gain market share: If you are a challenger brand this is your time to cut through the noise. Because frankly there is not that much noise in the market. You can take a piece of the pie if you put yourself out there and build trust with your consumers.

Two examples to look at from the recent past:

Airbnb: Amidst economic decline and a shrinking travel market, Airbnb offered a unique value proposition: affordable, local accommodations that catered to both budget-conscious travelers and homeowners seeking extra income.

Compare the Market: The legendary Meerkat mascot-led advertising campaign was launched in 2009 and has never looked back since. It uses humour in its messaging and transparency and control in its pricing and product.

Some key pointers for your brand to stand out during a recession include:

• Plain talk: something your consumers can understand and relate to. Focus on value and transparency.
• Entertain: People want to be entertained. you could use humour, intrigue, beauty, drama, or any other storytelling technique to engage with your consumers. Just don’t be boring.
• Be Memorable: What is that one thing in your advertising that will be memorable? Music, Mascot, narrative, punch line.

Strategise it, repeat it and own it.