Budget cuts. Layoffs. Wait, are we even in a recession?
The economy can be confusing.
How marketers should respond to economic changes can be equally difficult to navigate.
But with the right map, there’s opportunity to be found.
How should marketers respond to a recession?
Each week, we break down another marketing concept so you can skip the hype and get directly to what works.
The Conference Board predicted 2023 would usher in a recession for the US. After all, consumer spending had already started to contract at the end of 2022.
In response, businesses were quick to cut advertising. Ad budgets dropped in 2022 and certainly aren’t expecting a recovery this year.
However, the decision to cut spend can have significant consequences for the long-term health of a business. And while a recession can mean a decrease in consumer spending, people still need and want products and services. Plus, it's especially crucial that businesses remain visible and nurture customer relationships during challenging times.
This is where advertising comes in. Maintain or grow spend to:
- Build brand awareness. Advertising during a recession keeps your brand in front of customers. This increases the likelihood customers will choose you over a competitor when they are ready to make a purchase.
- Increase ROI. Advertising rates may be lower due to decreased competition. This means your budget goes further, and you reach a larger audience for less money.
- Gain market share. Your competitors are cutting back? That’s an opportunity to capture the attention of customers no longer being targeted by alternatives.
- Build customer loyalty. During tough economic times, customers are more likely to stick with brands that they know and trust. Advertising consistently reinforces your brand's message and builds customer loyalty.
Key Takeaway: There’s a lot happening in the economy. But during uncertain times, marketers should step into leadership roles to advocate for the importance of advertising—and its impact on long-term growth.
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