With all of the fearmongering about a recession, companies are making knee-jerk decisions to amputate their vital marketing efforts in order to conserve and redirect cash flow. However, history has taught us that this isn’t the wisest course of action for brands, and that it can result in higher market share recovery costs than the cost to continually maintain efforts. The deleterious impact is something marketers should avoid.
Increasing or maintaining ad spend during a recession and afterwards resulted in higher sales and market share.1 In fact, 60% of brands increasing media investment in the last recession saw an even greater ROI, and brands that specifically invested in paid advertising enjoyed a 17% increase in incremental sales.2 A point that may be even more important for brands to understand is that 15% of their business is typically lost to competitors when marketing spend is cut.2
Economic downturns cull the crowds and allow consistent marketers to take advantage of boosted visibility and a higher ROI.2 In other words, when other brands go dark, it’s your turn to shine and win over new customers. Losing that continuous flow of long-tail brand advertising ROI means that your renewed (and more costly) efforts will only bring back some of the ROI that’s associated with short-term advertising initially; like an SEO campaign, the long-term ROI won’t show returns for at least half a year.
Research has shown that the right strategy and innovation can spell the difference in success or failure during economic downturn.3 So, rather than stunting your strategies, our team of marketing strategists at BrandMuscle recommend shifting gears to focus on marketing lower-cost products, to target tactically at a device level to spend budget conservatively, and to time campaigns to flight when tax return checks are flowing so customers are buying. Meta published additional techniques to help brands grow in spite of economic downturn, including: account structure simplification, creative diversification, API conversion verification, ROI validation, and partnering with content creators.4
Looking for case studies to convince your brand not to cut marketing spend? Here are a few examples to make your case:
Ready to adjust your marketing strategy for the economic downturn? BrandMuscle is here to help. Contact us to learn more.
Senior Vice President of Strategic Marketing
As the SVP of Strategic Marketing at BrandMuscle, Erin Strong develops data-driven integrated marketing strategies that enable brands and affiliates to elevate their local marketing performance. Erin has over 20 years of progressive leadership experience and has gained extensive strategic development skills through her positions as a social and digital media strategist and customer research analyst. Erin is passionate about developing omnichannel strategies, strategic enhancements, and media optimizations that drive results.
Senior Manager of Marketing Strategy
Nicole Lamendola is the Senior Manager of Marketing Strategy at BrandMuscle, where she manages projects, sales operations, vendors, sponsorships, and consumer marketing. She also administers BrandMuscle’s State of Local Marketing Report. With over 10 years of marketing experience, Nicole is well-versed in developing effective branding and launch strategies and optimizing operations.