It’s official: We’re in a recession. But a recession is no reason to shutter your marketing and advertising efforts. In fact, if you look at historic recessions, the most successful brands were those that faced down the impossibilities with bold strategies.
Although it’s not clear how long this pandemic-induced recession will last—or what the economy will look like in the future—to be recession-proof and retain your customers, don’t go dark. You must keep marketing and advertising in order to beat the odds.
How Past Recessions Prove That Prioritizing Marketing Works
If you think that expanding your marketing and advertising efforts would be a fool’s errand, you’re not alone in feeling that way. Most businesses have already stopped paid advertising cold turkey and are cutting marketing budgets as you’re reading this (if they hadn’t already). In fact, estimates suggest that ad spend will likely reduce by 30-60 percent throughout 2020 and beyond, and Marketing Week found that 90 percent of marketers are either delaying or reviewing their marketing budgets.
But to understand why this strategy won’t do what you think it will, you have to look at historic recessions in which major corporations put the kibosh on advertising and marketing efforts. Unfortunately, the only thing this strategy did for some major players, including Post and Volkswagen, was give the competition a greater share of voice, which in turn resulted in more brand awareness and sales for the competition—especially when the economy picked back up.
So what is share of voice—and what happens to yours when your brand goes dark in an economic downturn? It’s a measure of the market that your brand has in comparison to your industry competitors based on brand visibility and how much your business owns the conversation.
The greater share of voice you have, the more authority and popularity you have in the market among prospects. Traditionally, share of voice referred to paid advertising in the competitive marketplace, but these days, your share of voice includes all of your digital marketing and advertising, including social media and SEO.
The good news is that when a recession happens and other brands pull most or all of their ad spend, your total share of voice naturally grows. It’s commonly accepted that a company with 10 percent share of voice will probably get 10 percent share of the market, so for example, if your competitors halve their advertising budgets, the 10 percent share of voice that your $1 million budget secured will double to 20 percent. As competitors cut back and shy away from marketing and advertising, you absolutely should not. Now is the time to take the reins and engage the ready and waiting audience.
When in doubt, take the lead from legendary Walmart founder Sam Walton. In 1999, he was asked how he weathered the 1990 recession and, in response, he summed up the perfect approach to recessionary marketing strategy:
“I thought about it and decided not to take part.”
This has been the approach of some of the most well-known brands in the world, including Amazon, Kellogg’s, Pizza Hut, Taco Bell, and Toyota. All of these companies have made the bold move of increasing marketing and advertising budgets during historic recessions and reaped the benefits—not only in share of voice and brand awareness, but also in sales.
Also on that list? Target. You shop there, your mom shops there, your cousins who live overseas only wish they could shop there. During the 2000 recession, Target reduced its operating costs and narrowed its distribution margins, all while increasing its marketing and sales budget by 20 percent. Not only did Target rise from the ashes of a recession practically unscathed, but the company went on to experience a banner decade.
How to Recession-Proof Your Marketing and Advertising Strategies
History lesson aside, you’re probably wondering how to keep marketing and advertising without seeming opportunistic or come across as out of touch and insensitive. Consumer spending accounts for 70 percent of the economy, even in a recession, so the key to outsmarting a recession is changing how you market: shifting budgets into new marketing channels, tweaking messaging, shifting budgets and goals, and never, ever going dark.
Although no two recessions have ever been alike, the one certainty is that consumers reduce their spending and set different priorities for what they buy. Although more than 10 million Americans have filed for unemployment in recent weeks, this doesn’t mean people want to stop hearing from you—they just want you to speak to them differently. Your brand messaging has to shift to be more empathetic, understanding, and compassionate.
Additionally, when creating content around the products and services you offer, consider focusing on your lower-cost offerings or legacy models or solutions that are less expensive to produce or sell. Consumers will be spending on essentials rather than luxury and discretionary purchases, so advertise and market what will sell—not what you want to sell. During the recession, you’ll see car companies marketing economy models, restaurants advertising dollar menu-style eats, and retailers selling lower-cost clothing labels.
Two great examples of recession-proof marketing strategies come from P&G and Campbell Soup Co., both of which are poised to survive this recession no matter how long it lasts.
P&G: Focusing on Lower-Cost Offerings
There were murmurings of a recession long before the COVID-19 pandemic struck, and P&G was poised for a recession already in September 2019. Instead of decreasing its marketing and advertising spend, P&G opted to start focusing on selling older, lower-cost products. The company has rolled out a value-priced tier of Tide laundry detergent in order to hit all segments of the market affected by the recession. Based on its experiences in past recessions, P&G has also gotten out of lines of business that are more vulnerable in recessions, including salon hair care and prestige fragrances.
Campbell Soup Co.: Giving People Inexpensive Eats
Instead of reducing its marketing spend, Campbell Soup Co. has implemented some recession-proof tactics by shifting its marketing and advertising focus to promoting low-cost snacks and foods, including its line of Goldfish crackers and classic soups—both of which tend to sell well during economic downturns.
Let’s Talk About How We Can Help
During difficult economic downturns, brands often seek quick cuts to ensure financial security and sustainability, but marketing and advertising shouldn’t be included in those cuts. When done right, marketing and advertising can be the key to outlasting a recession, growing your business, increasing market share, and bolstering your brand reputation. When you’re ready to see what’s possible, let’s talk.