You may be wondering if it’s important to still spend money on marketing during an economic downturn or recession. With prices increasing across the board in all industries, marketing budgets tend to be the first to be slashed. However, you know what they say… You have to spend money to make money.
While we’re not currently in a recession, economists and financial experts have indicated we may be heading in that direction. It’s important to continue to spend money on marketing during an economic downturn for several reasons. For example, you’ll want to continue to increase brand awareness, hire and retain a talented workforce, stay ahead of your competitors and focus on long-term growth.
Recessions don’t last forever. Historically, 75% of recessions end within a year and 30% only last two quarters. Instead of slashing budgets, consider optimizing your current strategies and where you’re allocating money. Is that billboard worth the spend? Are your Facebook ads actually generating a return on investment? How is the cost-per-click trending for your Google Search campaigns?
Audit your media mix, and dedicate marketing dollars toward what’s working for your business.
Marketing for brand awareness during an economic recession
During a recession, consumers are more cautious with their spending and may be more selective about where they spend their money. By investing in marketing, businesses can maintain their visibility and stay top of mind with consumers, which can increase the chances of being considered when a purchasing decision is made.
Building brand awareness and maintaining brand loyalty can help minimize business risk. This also helps you project a state of stability to your customers. A creative marketing campaign can help differentiate your brand, therefore making it more appealing to potential customers.
Attracting and retaining talented employees is a critical aspect of growing any business or brand. Marketing that you offer competitive salaries, benefits, and other perks sometimes requires a financial investment, but in the long run, it can lead to profitability.
A New Leaf recently partnered with Resolute to run a workforce recruitment campaign. Anxious to staff their new location, they saw great results! The company saw a 182% increase in applications and a 180% increase in new hires during the campaign.
On the flip side, a recession can be even more challenging for businesses if they have layoffs or other cost-saving cuts. Building brand awareness can help reduce reputation damage by focusing on the brand’s positive attributes and values.
Gain a competitive advantage
While some businesses may cut back on their marketing budgets during a recession, those that continue to invest in marketing can gain a competitive advantage. With less noise in the marketplace, it may be easier for businesses to stand out and reach their target audience.
Even if your marketing budget remains the same, your competitors may decrease their spending. Meaning, you could be getting more bang for your buck due to less competition for ad space.
Take a close look at your campaigns. Most importantly, keep an eye on your cost-per-click, cost per impressions and click-through-rate percentages. These numbers will help you determine if your ads are performing well or if they need some adjustments.
Marketing for long-term growth
While it may be tempting to cut back on marketing expenses during tough times, businesses that do so may sacrifice long-term growth. Marketing can help to build brand awareness, generate leads, and drive sales, which can all contribute to the long-term success of a business.
While it’s true that reducing marketing spend during a recession may help your bottom line, this is a short-term strategy that may hurt your business in the long run. Even though customers may not be able to make certain purchases during a recession, they will remember the brands that stood out and remained consistent.
Once the economy improves, which we know it will eventually, these customers are more likely to return to those brands they remember and trust.
Adapting to the market during a recession
During a recession, consumer behaviors and preferences may change. By investing in marketing, businesses can gather data and insights on these marketing trends and adjust their strategies accordingly, ensuring they remain relevant and meet the needs of their customers. When it doubt, audit it out.
In short, investing in marketing during an economic recession can help businesses maintain their visibility, gain a competitive advantage, drive long-term growth and adapt to changes in the market. Continued marketing outreach and strategy development can help you thrive, not just survive, and outlast an economic recession or downturn.