It’s National Bureau of Economic Research official, we’re in a recession.
There’s that word. Yeah, that one. The one we fear, the one we’ve read about, the one we hoped not to repeat this close to 2008.
Recession. As of Monday, June 8th we officially entered into that dreaded reality. We’re not experts of economics, or even freakanomics, but we do know a thing or two about marketing and advertising. A recession isn’t the time to pull your marketing budget and allow consumers to forget about your brand. In fact, it’s the opposite.
A recession isn’t the time to pull your marketing budget.
Let’s take a look at what we can do now and learn from the last economic downturn.
In the aftermath of 2008 companies and brands that kept their message front and center were top-of-mind when dollars came back to the market. It doesn’t have to come with an increase in ad spend (although it could or should if able), brands that maintained their budgets as-is increased their market share and overall sales. Read that again, brands that maintained their budgets within a recession saw a clear return on investment both during and after the collapse.
Not too long ago Amazon was still just an online bookseller. It’s often difficult to recall the time before Amazon was the ubiquitous online behemoth it is today. When “do you have Prime?” was a question most heard at higher-end steakhouses rather than in the aisles of brick-and-mortar stores as consumers compared prices with Amazon.
Amazon invested heavily in themselves during the 2008 recession. Increasing first-party products like Kindle and repositioning themselves as the true A to Z retailer. As a result sales grew by nearly 30% and e-book sales eclipsed print sales for the first time. Amazon is the powerhouse it is today because of its innovation, positioning, and advertising of such in the most difficult of times.
Clear results and a direct line to ROI is not something we’re always used to seeing in marketing and advertising. Following ad spend to market dollars or conversions isn’t always a straight line. However, we can’t ignore the clear correlation at play here. By maintaining or increasing your ad spend in a recession you’re remaining top of mind; by remaining top of mind you’re increasing your conversion rate; by increasing your conversion rate you’re increasing your profits.
By maintaining or increasing your ad spend in a recession you’re remaining top of mind; by remaining top of mind you’re increasing your conversion rate; by increasing your conversion rate you’re increasing your profits.
Conversely, by decreasing ad spend you’re losing share of mind in consumers who are looking for stability. While it may be a bit difficult to recall Amazon of old, a brand that has lost almost the entirety of its share of mind is Blackberry. Apple and Samsung among others invested heavily in their advertising and creative while Blackberry chose to be cautious. They assumed their hold on the business consumer was solid. History of course tells us it wasn’t.
During and within the immediate aftermath of the great recession Blackberry saw its sales drop a staggering 39%. Within a year Blackberry went from nearly a quarter of the market share to just 9.1%. The company scrambled post-recession, realizing their mistake, and released products light on innovation to a market that had largely forgotten them entirely. While it wasn’t the death knell that many predicted, Blackberry remains a dinosaur in a category with a notoriously short attention span.
We’re facing a unique recession following a global pandemic; government bailouts, PPP loans, and a fear of a second wave all contribute to an unstable economy. It’s a perfect storm of uncertainty. All of which is exactly why your brand can represent the stability consumers are seeking.
It’s time to move beyond the pandemic messaging, consumers know that you’re here for them.
They know that every company ever is here for them. No more slow, sad piano intros coupled with imagery of happy families together at home. That messaging is only contributing to the noise and will be forgotten. When your message is forgotten so too is your brand.
“I hear you, but we can’t possibly afford to market in these uncertain times?”
Increasing or even maintaining spend during a recession seems counterintuitive, difficult to do or defend. But it’s not. If you focus your attention not only on the immediate here and now but the future of your brand, increasing or maintaining your marketing is a no-brainer.
Don’t trim the necessary budget items in the name of marketing. Focus instead on what you’re not spending money on amidst the downturn. Most conventions and events have or will soon be cancelled for the foreseeable future. With that comes decreased costs of attending or exhibiting at these shows as well as a considerable decrease in travel.
The loss of these budget line-items represent dollars that are free to be reallocated. Marketing and ad placements are cheaper in a recession. Capitalize on this buyer’s market for your brand thereby increasing your awareness. If you’re ready to take advantage of this unique opportunity, your brand will be positioned for success both during and after the recession.