There’s a consensus that pulling back on marketing budgets in recessionary times does more harm than good for brands, but how exactly should marketers navigate uncertainty? Philippa Snare, SVP EMEA at The Trade Desk shares some tips on how marketing can gear up in a climate of high inflation and spiralling living costs.
The spiralling cost of living has squeezed consumer spending to levels not seen for decades. While marketing budgets are often the first to be re-evaluated when the economy contracts, now is not the time to batten down the hatches as economic headwinds strengthen.
Studies from previous recessions have shown when marketing budgets dropped by 13.5%, brands who maintained their spend achieved 3.5 times more brand visibility than those who did not.
Brands should learn from the past and avoid knee-jerk decisions to stay strong, secure and salient as marketers and business leaders go back to the drawing board. And this goes beyond budgetary commitments.
Here’s three key tips to marketers as they gear up to tackle these challenges head on.
1) Reap the rewards with a glass half full approach
Businesses are quick to change course when a recession hits. Whilst there is rationale behind such decisions, the saying “fortune favours the bold” holds firm. As demonstrated in the 2008 recession, 60% of the brands that hit pause on advertising activity saw both brand use and brand image decrease by a quarter, according to research from Kantar (formerly Millward Brown).
Consumers spending less does not mean their advertising consumption declines. But we have seen time again that when the going gets tough, the pressure is on marketers to prove ROI.
The most strategic marketers will see this as an opportunity. As ad spend shifts so does competition, and with that the chance to gain a larger share of voice becomes more pronounced than ever. Not only will budgets stretch further when purchasing advertising space, but with less noise comes more chances of drawing attention to brands.
Seeing a glass half full will only bring a boost to brand recognition.
2) Data-driven strategies will get the most out of budgets
As marketers are forced to rethink their strategies, a data-driven approach is the only way to ensure marketing communications are optimised to be as effective and measurable as they can be.
Marketers need to recognise where the opportunities lie for them, and optimise the whole omnichannel experience for their strategy – whether this be opting for Connected TV in the wake of rising linear TV prices, or adopting digital out-of-home and targeted digital advertising. Understanding how best to fine tune each channel and target their messaging through them is essential.
And then they need to get this right – sending out the wrong message in a storm will inevitably throw a business off course. Take the public mood as a factor for example. The last thing consumers want to do is to engage a brand who appears out of touch. Businesses need to know if the public mood will turn against ‘business as usual’ advertising, or if customers are seeking the best deals from their brands.
So investing in data-driven analytical tools is more important than ever if marketers are to keep their ears to the ground and optimise an effective strategy.
3) Maintaining spend translates to long term growth
If one thing is becoming clear, it’s that the looming recession will be a marathon, not a sprint. So business leaders and marketers need to hold firm when assessing budgets, to keep a long-term view of the benefits that recession marketing will bring.
Recognising the opportunities that lie ahead for businesses to strengthen their brands, spending wisely and standing firm in the face of the oncoming storm will not only help determine whether businesses survive the cost of living crisis, but will ultimately forge brand image and strength.
Throwing caution into the wind, stretching budgets further than ever and leaning on data-driven strategies are all things marketers need to do now as they plan for the storm ahead.
SVP EMEA, The Trade Desk