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When a recession comes, don't stop advertising.

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Numerous case studies point out the best strategy marketers can have during a recession is to ... [+] maintain their advertising budget and/or change their ad message to adapt to the current economy, it will provide long-term market growth for their brands.

In recent weeks, there has been some talk about an economic recession. When it comes is still anybody’s guess, but another business slowdown is inevitable. It would be the first since the “great recession” ended more than ten years ago. Often times when a recession happens, businesses, fearful of declining revenue, begin to cut back in various areas, including their ad spending.

In the aftermath of the last recession in 2008, ad spending in the U.S. dropped by 13%. Broken out by medium, newspaper ad spending dropped the most at 27%, radio spending dropped by 22%, followed by magazines with a decline of 18%, out-of-home  by 11%, television  by 5% and online  by 2%.

Nonetheless, there have been a number of studies going back nearly one century that point out the advantages of maintaining or even increasing ad budgets during a weaker economy. Those advertisers that maintained or grew their ad spending increased sales and market share during the recession and afterwards.

As a popular adage says, “ When times are good you should advertise. When times are bad you must advertise. ”

There are several reasons to advertise during a slowdown.

• The “noise level” in a brand’s product category can drop when competitors cut back on their ad spend. It also allows for advertisers to re-position a brand or introduce a new product.
• Brands can project to consumers the image of corporate stability during challenging times.
• The cost of advertising drops during recessions. The lower rates create a “buyer’s market” for brands. Studies have shown that direct mail advertising, which can provide greater short-term sales growth, increases during a recession.
• When marketers cut back on their ad spending, the brand loses its “share of mind” with consumers, with the potential of losing current – and possibly future – sales. An increase in “share of voice” typically leads to in an increase in “share of market.” An increase in market share results, with an increase in profits.

There are a number of examples of brands that benefitted by maintaining their ad budgets during economic downturns.

Dry Cereal: In the 1920’s, Post was the category leader in the ready-to-eat cereal category. During the Great Depression , Post cut back significantly its advertising budget and rival Kellogg’s doubled its advertising spend, investing heavily in radio and introducing a new cereal called Rice Krispies, featuring “Snap,” “Crackle” and “Pop.” Kellogg’s profits grew by 30% and the company became the category leader, a position it has maintained for decades.

Imported Automobiles: The 17-month recession of 1973-75 was triggered by the energy crisis. In late 1973, the U.S. government issued its first miles-per-gallon report in which Toyota Corolla was second to Honda Civic in fuel efficiency. Since Toyota was experiencing strong sales, when the economic downturn hit, the temptation was to drop their ad budget, which they resisted. By adhering to its long-term strategy, Toyota surpassed Volkswagen as the top imported carmaker in the U.S. by 1976.

Quick Service Restaurants: In the 1990-91 recession , Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.

Technology: Amazon sales grew by 28% in 2009 during the “great recession.” The tech company continued to innovate with new products during the slumping economy, most notably with new Kindle products which helped to grow market share. In a first, on Christmas Day 2009, Amazon customers bought more e-books than printed books. As a result, in the minds of consumers, Amazon became an innovative company by introducing a lower cost alternative to cash-strapped consumers.

Another strategy used by marketers is changing the ad message and using short-term price incentives to match the economic climate with consumers who are seeking a good deal. Some advertisers will offer interest-free loans, coupons or special promotions to boost sales and market share. When the economy bounces back, regular pricing can return. For some advertisers that don’t give cost incentives, they can change the ad message to being expensive but worth it. Another creative strategy is pointing out the value the brand provides.

Although the natural inclination for advertisers is to cut back on advertising during a recession, those brands that maintain their ad budget and/or change their messaging can get a long-lasting boost in sales and market share.

Perhaps the best quote about advertising in a recession came from Sam Walton , the founder of Wal-Mart. When asked, “What do you think about a recession?” he responded, “I thought about it and decided not to participate.”

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Using Marketing to Succeed During a Recession

Content Marketing

An economic recession is a natural stage of the US economic cycle. A recession can be especially intimidating to businesses large and small, but it can also provide a unique opportunity for companies to focus on their marketing strategy more than ever before and gain a competitive advantage. 

McGraw-Hill Research conducted a study on 600 companies across 16 industries and to find out how marketing efforts impacted company growth in and after the early 1980s recession. The research revealed that companies who increased or kept their marketing budget the same had more sales growth during and even three years after the recession. By 1985, the companies who focused on aggressive recession marketing grew by 256%, unlike those who slashed or eliminated their advertising budget.  

 “ I have yet to see any study that proves timidity is the route to success. Studies consistently have proven that companies that have the intelligence and guts to maintain or increase their overall marketing and advertising efforts in times of business downturns will get the edge on their timid competitors. ” — J. Wesley Rosberg, Senior VP at Meldrum & Fewsmith

It might seem counterintuitive, but your company can experience tremendous gains by investing more in marketing. As you tactfully reposition your products or services to address current consumer concerns, you turn your company into a useful resource for customers during a difficult time and increase your chances of dominating your industry. 

Recession Marketing Case Studies

Here, we discuss some case studies that illustrate how businesses can build a greater share of the market and even thrive during an economic downturn by:

• Prioritizing their marketing budget;
• Refining their marketing strategy; and
• Increasing brand awareness. 

The Great Depression

Before the Great Depression of the 1920s, Post was the top-selling cereal company in the ready-to-eat breakfast cereal industry. But when the Depression began, Post made major cuts to its marketing budget, which turned out to be a huge mistake. Kellogg saw a major opportunity to rise above Post and achieved this by doubling its advertising budget. 

• Kellogg invested in radio ads to promote their new Rice Krispies cereal
• Profits increased by 30%
• Kellogg overtook Post as the industry leader and has been the leader ever since

The 1970s Energy Crisis

The years 1973 to 1975 were plagued by a year-and-a-half-long energy crisis that increased the price of gasoline and tensions with the Middle East. At the time, Toyota was doing exceptionally well in terms of vehicle sales. But when the recession came, they were tempted to make cuts to their marketing budget.  Instead, they decided to hone in on their long-term marketing plans, which helped them surpass Volkswagen and made Toyota the top imported carmaker a year after the recession ended. 

The Early 1990s Recession

 Pizza Hut and Taco Bell

The weakened economy caused a recession from 1990 to 1991. During this downturn, McDonalds made a costly decision to eliminate its marketing budget. Pizza Hut and Taco Bell saw this as a huge opportunity to promote their food offerings. 

• Pizza Hut innovated and marketed new items, such as the stuffed crust 
• Taco Bell introduced its value menu
• By escaping the shadow of the primary fast food giants, Pizza Hut increased sales by 61% and Taco Bell by 40%
• Conversely, McDonald’s sales dropped 28%

The 2008 Financial Crisis

River Pools and Spas

Large companies aren’t the only ones who benefited from pushing forward with recession marketing. In 2008, River Pools and Spas was a smaller-scale retailer with locations across Virginia. After the market crash that occurred that year, the company thought it was done for. They considered laying off their employees and filing for bankruptcy after losing so much business.  Instead, the company reassessed their offerings and figured out how to tempt customers.

• Their pool installation package was priced at $60,000 at that time
• They created more affordable packages and adapted their work process
• The company stopped focusing on retail and honed in on fiberglass pool construction
• They harnessed the power of the internet and began targeting digital consumers
• These moves saved the business and made them into a nationally-recognized pool builder

Del Monte Foods

Amid the 2008 recession, Del Monte Foods appointed Bill Pearce as the company’s first CMO.

• His goal was to drive the company forward through effective marketing
• He increased the company’s ad spend budget in response to the recession
• He rolled out memorable, consumer-focused campaigns, including the “Fruit Undressed” advertisements
• After a year, the company went from a loss of $10.1 million to a profit of $58.6 million in Q1

“Don’t scale back spending. The old way of dealing with a recession was to slash and burn head count, marketing, and capital investment. But companies that do that are likely to be out of business in five years. Now is not the time for across-the-board cuts.” — Bill Pearce, CMO, Del Monte Foods

Hyundai USA

By 2009, the entire auto industry was hurting and it was uncertain whether it would even be able to break even. Unemployment was through the roof and nobody was buying cars. In response, Hyundai strengthened its marketing by investing in nine commercial slots in the Super Bowl and the Academy Awards and invested in a customer-focused ad campaign. As a result :

• The company’s market share increased from 3.1% to 4.3%
• Their competitors in the auto industry experienced a 22% sales drop while Hyundai increased vehicle sales by 5%
• The company was voted the top marketer of the year by Automotive News

In the 2008 financial crisis, consumers all over the USA were cutting back on shopping, entertainment, and eating out. Groupon, now a market leader, spotted an opportunity to make “nonessentials” more affordable for everyone.

• The company sent out daily email discounts on goods and services across 300 markets in its fledgling years
• It saw a $500 million profit despite the recession

The Bottom Line

Historical trends don’t lie: Marketing drives income, and companies that invest more in their advertising during recession tend to do better in the long term. The US economy needs you, so take a leap of faith and don’t give into fear. You either need to increase or maintain your marketing budget in this uncertain economy. This economic slump will be brief, but your reaction to it will determine whether or not your business is here to stay. 

Mekenna Epperson

1 thoughts on “ using marketing to succeed during a recession ”.

This makes a lot of sense and I will put it to good use.

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Insights > Advertising

Marketing during a recession: Finding the upside of an economic downturn

5 minute read | September 2022

Brands and advertisers just now settling into a post-COVID marketing rhythm could be facing another major disruption, this time in the form of a global recession. With 60% of economists predicting a Euro-zone recession, and an expected global growth rate of only 2.9% —down from 4.6% at the beginning of the year—an economic slowdown seems inevitable. 

And as consumers adjust their spending to adapt to inflation and higher interest rates, many brands and advertisers are following suit. According to data from Nielsen Ad Intel , the U.S. advertising marketplace shrank by 7% in the second quarter of 2022 versus the same time last year, signaling that many marketers expect, or have already experienced, cuts to their budgets. 

But while dialing back media spend may seem to make sense for short-term budgetary concerns, marketers focused on mitigating the impact of a recession and maximizing the effectiveness of their marketing budgets need to think of—and spend for—the recovery.

Recessions don’t last forever

The good news for marketers dreading a protracted downturn is that many recessions are short lived—historically, 75% of recessions end within a year, and a full 30% only last two quarters. So, any cut in spending will likely only be short-term and result in nominal savings, while putting brands at a disadvantage heading into the bounce-back period that is likely just around the corner. 

Considering most brands are already under-spending—depressing their ROIs by a median of 50% —any additional cutting of media expenses could only serve to reduce ROI further, at a time when brands need to maximize profits most. 

The solution isn’t to slash the budget, but to optimize media mix and invest in channels that are performing well. Finding the right balance ensures that spending is properly allocated for reach, efficiency and frequency. For example, an auto manufacturer recently increased its reach by 26% and its impressions by more than 39% by simply optimizing its media allocation without adjusting its budget. 

And investing in media during a recession can actually end up saving a brand money, as industry pull-back creates a supply-and-demand dynamic that favors ad buyers and lowers media costs. In fact, some brands actually step up their media investments in recessions. In addition to a favorable media costs environment, brands may also find competitors have scaled back on advertising, which creates an opportunity for campaigns to have greater impact.

Growth is possible, even in an economic downturn

Before assuming a slump in sales due to a recession, brands should assess the landscape and closely follow consumer behavior for changes in spending patterns. A shift in spending habits from large indulgences to small indulgences, for example, creates opportunity for growth in certain categories, like lipstick , while contracting others, like dining and hospitality. 

And as consumers become more price-sensitive, brands will need to change their media plans, and messaging, to match. Recession-friendly messaging can help reinforce the value of a brand and help ensure consumer loyalty beyond the recession.

Brands and advertisers that want to make the most of potential category growth during a recession should focus on analyzing consumer behavior to optimize messaging and increase the impact of their ad spend.

Making the (right) cut

Sometimes, budget cuts are inevitable. If you know you have to adjust your spend, make sure you’re cutting the right costs, in the right places, to maximize the effectiveness of your remaining dollars and minimize negative impact to your ROI. 

And while pulling back on media spending may seem like the obvious way to cut costs and hit financial targets, the benefit can be relatively low. A Nielsen study of media plans found that only 25% of channel-level investments were too high to maximize ROI, and within this group, the median overspend amount was 32%. And while reducing spend would improve channel ROI by a modest 4%, brands would also see significantly reduced sales volume due to a drop in ad-driven sales.

It can also be tempting to increase promotions when consumers decrease spending, but this approach comes with its own challenges. Promotions done regularly can condition consumers to only buy when there is a promotion, leading to lower sales on regularly-priced items and margin compression. ROI also tends to be lower for promotions—45% lower than that of media, according to Nielsen marketing mix models —as only a small portion of promotional sales are truly incremental, and promo sales need to be much higher to make up for lost margins.

Instead of relying heavily on promotions, consider which channels can be reduced or cut with minimal impact to ROI. If results in one channel are already lackluster, it may be better to cut it out entirely and reallocate your spend to channels with better metrics and higher ROI potential. 

No matter what media mix and budget allocation you ultimately decide on, remember that any spend is better than no spend at all. According to Nielsen Marketing Mix Models, brands that go off-air can expect to lose 2% of their long-term revenue each quarter and, when they resume media efforts, it will take 3-5 years to recover equity losses resulting from that downtime. And your bottom line isn’t the only thing that will suffer if you cut your media spend—Nielsen data shows that marketing accounts for 10%-35% of a brand’s equity.

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5 Top Recession Marketing Examples for Advertising in Tough Times

It’s hard to justify advertising during a recession — especially as consumers struggle financially, brands rework their budgets, and future stability remains uncertain.

Still, studies show that advertising during a recession pays off. That means brands shouldn’t necessarily pull back on their campaigns right now. But they should take the opportunity to rework their strategies.

Easier said than done, of course. Marketing during a recession requires striking a careful balance between promoting your brand and building awareness while also remaining sensitive to a shifting market and changing customer needs.

It may be tough, but it’s not impossible. To provide inspiration and guidance, we’ll unpack some of the top recession marketing examples from brands across industries.

Let’s take a look.

1. LendingTree: Lend-a-Hand Alliance Cohort

Online lending marketplace LendingTree launched the  LendaHand Alliance Cohort  in 2021 to support emerging nonprofits in its city of Charlotte, NC. This year, the company is continuing to make good on its grants.

The three-year program supports 10 community-embedded nonprofits with a $3.75 million investment, business expertise, and social capital to help them continue making a difference.

As April Whitlock, Head of Corporate Citizenship at LendingTree said, “We are ready to disrupt the corporate giving model the exact same way we disrupted the mortgage experience: by empowering the little guy.”

Key takeaways:

• Invest in your community.  Don’t just slap together a pretty Facebook post and call it a day. Make a real financial investment in a cause that matters to your brand and customers.
• Think long-term.  Recessions can have economic repercussions for years to come. Launch programs that make an impact beyond just the fiscal quarter or year.

Check out another successful campaign from LendingTree .

2. Boxed: The Value of Boxed

U.S. customers are  flocking to wholesale  and buying in bulk to prepare for further price inflation and economic recession.  Boxed , an online wholesale retailer, is stepping in to help with its new campaign, “The Value of Boxed.”

The brand’s ads highlight the value of buying in bulk, especially when it comes to purchasing necessities like groceries and household essentials. They even take jabs at spendthrift companies with zingers like, “So, this is what happens when you focus on your customers instead of flying into space.”

Boxed also launched paid ads with special discount codes, helping customers save even more with their purchases.

• Focus on delivering value.  Recession marketing isn’t about flaunting shiny new products and features. It’s about highlighting the practical value and solutions your brand can provide.
• Launch special offers and deals.  Help customers save money with timely and relevant promotions.

See how Boxed increased sales with another successful case study .

3. Bosch: Sustainable Cities

Bosch Global , an engineering and technology company, is putting the spotlight on sustainable cities that use cutting-edge equipment to lower energy usage, reduce costs, and combat climate change.

Most recently, the brand did a deep dive into how  Ontario, California worked with Bosch subsidiary Climatec  to install 13,000 new LED streetlights and launch new programs for sustainable urban development.

By revamping its energy infrastructure with new equipment, Ontario is expected to save more than $75 million going forward.

• Educate audiences.  Position your brand to as a trusted authority in your field.
• Tell real stories.  Share how your work impacts real people and their communities.

Check out another case study from Bosch Home Appliances .

4. The Motley Fool: Investing During a Recession

The Motley Fool  is a multimedia financial services company that publishes investing insights, research, and advice. Naturally, the business has been guiding audiences through this period of economic instability with high-quality content.

A video about the best safety stock in a rough market, for example, helps investors continue expanding their portfolios:

Meanwhile this Instagram video breaks down three recession-proof real estate investments during a period of economic distress:

• Be a thought leader.  Divulge industry insights and expertise to build credibility.
• Use video to dive deeper into important topics.  Unpack complex concepts with easily digestible content.

See another successful case study from The Motley Fool .

5. Adidas: #RunForTheOceans

Adidas launched its #RunForTheOceans campaign to clean up plastic waste from beaches and islands around the world. That is, during a time of economic downturn, the retailer tied its products to bigger issues and social missions like sustainability.

The campaign called on people across 189 countries to lace up and join the movement: 10 minutes of running = 1 plastic bottle cleaned up by nonprofit Parley for the Oceans.

The event resulted in over 6 million participants, more than 771 million minutes ran, and 500,000 pounds of plastic waste cleaned up.

• Do social good.  Push your mission instead of your products, creating community around a common cause.
• Partner with nonprofit organizations.  You don’t have to do this alone. Team up with organizations that specialize in fundraising and running social initiatives.

Check out how Adidas increased brand awareness with another successful video campaign .

How to Freshen Your Recession Marketing Campaigns

Now may feel like the time to take a step back from advertising. But brands that can successfully navigate recession marketing and pivot their strategies are more likely to come out on top. Use these examples and key takeaways to guide you, and check out Taboola’s recession marketing best practices for helpful tips on building engaging ad creative through economic uncertainty.

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How much should you spend on marketing during a recession? Here’s what the research says

As COVID-19 sweeps the world, our economy is quickly going down the toilet (along with stockpiles of toilet paper). Unfortunately, we are likely already in a recession . For marketers, recessions have historically been scary times. Often, marketing seems like the easiest thing to cut. But is that wise? 

As a marketer, if I wrote a blog post telling you to increase marketing during a recession, I’d look a little self-serving (to say the least). So instead, I decided to look at what the research tells us about marketing during recessions.

What I found is overwhelming evidence that it pays to maintain — and in some cases increase — marketing expenditures during an economic downturn . As Peter Fader of the Wharton School said, “As companies slash advertising in a downturn, they leave empty space in consumers’ minds for aggressive marketers to make strong inroads.”

McGraw-Hill Research 

Perhaps the most-cited research study on marketing during recessions comes from a McGraw-Hill Research study of 600 companies from 1980 to 1985. The study found that the businesses that chose to maintain or raise their marketing expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. And, companies that marketed aggressively during the recession had 256% higher sales than those that did not continue to market.

Harvard Business Review

Harvard Business Review also analyzed the 1980s recession, as well as the 1990 slowdown (1990 to 1991), and the 2000 bust (2000 to 2002). In December 2008, the company embarked on a year-long project, studying 4,700 public companies across three periods: the three years before a recession, the three after and the recession periods themselves.

Of the sample, only 9% flourished after a slowdown, outperforming rivals by at least 10% in sales and profits growth. The study found that these high performers mastered “the delicate balance between cutting costs to survive today and investing to grow tomorrow.” This combination of defensive and offensive moves included a focus on greater operational efficiency along with investing “relatively comprehensively” in the future by spending on marketing, research and development, and new assets. 

According to the study, “These companies also judiciously increased spending on R&D and marketing, which may produce only modest benefits during the recession, but adds substantially to sales and profits afterward.”

Another study by Harvard Business Review , “ The Use of Advertising During Depression ,” was published in 1927 and tracked the advertising investment and annual revenues of 250 companies through the depression and into the growth period following it. The study found that companies that increased their ad budgets during the recession grew sales much faster than those that did not, both during the recession and after it.

Image source: Vaile, Roland S., “The Use of Advertising During Depression,” Harvard Business Review, 5 April, 1927. 

Bain & Company

A more recent study by Bain & Company of nearly 3,900 companies worldwide during the last recession found that winners diverged from losers, with winners growing at a 17% compound annual growth rate during the downturn, compared to 0% among the losers. 

Among other tactics, the winners played offense by reinvesting selectively for commercial growth — including maintaining marketing while competitors cut back. As an example, the report cites Samsung, which maintained marketing investment and focused on rebranding itself as an innovative company during the Great Recession. At the beginning of the downturn Samsung ranked No. 21 in brand value among Interbrand’s global list, and in May 2019 (the date of the report) the company ranked No. 6. 

Journal of Advertising Research

In a 2009 review of more than 40 empirical studies on the impact of marketing during and after a recession, researchers looked at studies from across the world covering every significant recession since 1920. The scholars found that:

“…most firms tend to cut back on advertising during a recession. This behaviour reduces noise and increases the effectiveness of advertising of any single firm that advertises. Thus, the firm that increases advertising in this environment can enjoy higher sales and market share. When the economy expands, all firms tend to increase advertising. At that point, no single firm gains much by that increase. The gains of the firms that maintained or increased advertising during a recession, however, persist. This theory is also the most reasonable explanation for all the empirical effects of GDP on advertising and of advertising on sales, market share and profitability. It is also a simple, but strong, refutation of the theory for cutting back on advertising during a recession.”

McKinsey & Company 

In its 2002 study, “ Learning to love recessions ,” McKinsey studied nearly 1,000 U.S. companies over an 18-year period (1982 to 1999), including the U.S. recession of 1990 to 1991. The study found that while most companies tightened their belts, the winners traded “lower short-term profitability for long-term gain, refocused rather than cut spending.”

Specifically, the successful companies spent significantly more on selling, general and administrative (SG&A) costs (which include marketing) than those that lost market share. In fact, the study found that successful companies spent more money (as a percentage of sales) on marketing during the recession and less during periods of growth. 

Management Review, American Management Association

A survey of American Management Association (AMA) member firms found that companies that increased their marketing budgets during the 1990 to 1991 recession gained market share and retained the growth as conditions improved in 1992. Firms that increased their marketing budgets and added staff were twice as likely to pick up market share. 

The authors of the study opined that at the time — nearly 20 years ago — marketing played a more critical role than it did during previous recessions. The study said that “while marketing’s role was once more informational than brand identity building, and considering that never more than today has the clutter factor been so great, relationships between customers and brands are critical.”

Arguably, marketing’s importance to the health and profitability of organizations has grown significantly more since the early 1990s, as the advent of the internet has transformed how companies build relationships with customers. 

American Business Media

This last study did not review companies’ marketing expenditures and subsequent financial performance. Instead, the study, commissioned in 2001 by the trade association American Business Media , looked at how business-to-business (B2B) executives spend time with trade media during a down economy and how it affects purchase decisions. 

The survey of 505 executives at U.S. companies with at least $5 million in sales found that:

• 86% of executives said that when they see advertising by a company in a recession, it keeps that company top of mind when making purchasing decisions and makes them feel more positive about that company’s commitment to its products and services.
• 99% of executives said that it’s important to keep abreast of new products and services for their industries during a recession
• 97% said it’s important to continue to invest to remain competitive

We are just at the beginning of the COVID-19 crisis. While marketing may seem trivial at times like these, as the research shows, as Mark Ritson in MarketingWeek put it, “There are few things more proven in the world of marketing than the power of advertising in a recession.”

If you have questions about where your marketing dollars are best spent during these times, contact me at [email protected] or 904-374-5733.

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Michelle Calcote King is an award-winning marketer with nearly 20 years of expertise in all things marketing, content, media and public relations. Specializing in highly complex industries, she leverages superior writing skills, media savvy and a love of all things digital to move her clients' businesses forward.

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Ritson’s recession playbook: 9 steps marketers should take to survive the dark times ahead

From retaining a long-term view and the importance of excess share of voice to making strategic changes to positioning and saying no to failure, our columnist spells out how brands can navigate recession.

With the tasteless timing of a drunk hitting on a widow at her husband’s funeral, marketers are in Cannes this week as the big grey clouds of recession barrel overhead.

While our economy constricts and inflation escalates, our best and brightest are on the French Riviera listening to Paris Hilton and Gary V explain what the NFT revolution means for brands.

Further down Le Croisette, middle aged men in faded black T-shirts angrily proclaim, “we put up with too much shit from people that don’t love creativity” while strikes, budget cuts and supply shortages take their toll.

A recession is a peculiar thing. No economist can ever accurately predict when one will arrive, how big it will be, or how long it will last. But once it begins everything is affected in an entirely predictable way. The only silver lining for marketers is that while we have no clue when the recessionary curtain will drop across our businesses, we know from experience how we should handle things once we are plunged into darkness. Provided you accept that we aren’t living in a paradigmatically different era of marketing in which history means nothing, there is a decent playbook that spells out the correct approach for the tricky months ahead.

R is for retaining the long

There is an idiot move at the top of the agenda of all those who do not understand history. They see marketing as a cost. Advertising as a luxury. And brand building as the ultimate vanity. Ergo, when times get tough it’s obvious that the first thing to go is the esoteric brand budget and not performance marketing with the proven and immediate ROI.

It turns out that is exactly the wrong move. In case studies going back a century the story is always the same. The companies that maintained ad spend, or even increased it, during a recession saw little advantage during the hard months of the squeeze. But the minute the green shoots of growth appeared, their growth was spectacularly superior versus competitors that cut back during the recession. You maintain the long of it because its impact is delayed but substantial and it will kick in exactly when you need it as the recession ends.

E is for excess share of voice (ESOV)

The reason the long of it not only works through a recession but works harder for your brand during a recession is ESOV. You have to ignore all the blowhards on marketing twitter that critique ESOV for this reason or that. It is the closest we have to a scientific law of advertising and it says an equilibrium exists between a brand’s share of voice and its share of market.

If a company increases its relative share of voice above it share of market, the equilibrium will eventually restore itself and market share will also grow.

Fuck failure, it’s really not welcome. It’s certainly not essential to success. And it’s especially unpopular when recession makes it a potentially fatal experience not a teachable moment.

In a recession this happens differently. Many, perhaps most, of your competitors will cut back on their advertising spend. Especially the brand building stuff. If your category cuts half its ad spend and you maintain your ad spend, for example, you get a massive boost in your ESOV simply because everyone else is investing relatively less. And if multiple industries cut back their spending, as they usually do in a recession, the cost of media often drops ensuring your relatively big ad spend is now stretching to even more media value.

Summarising a century of data, the reason brands should maintain their brand building budgets in a recession is not because of the recession itself, nor the behaviours of consumers. It’s because your competitors lose their nerve and are vulnerable because of it. If you can keep your head and your brand budget while those around you are reducing theirs, you will earn the post-recessionary benefits.

C is for consider maintaining the shorter spend too

This one is a little less definitive because it will depend on your category and the impact the recession will have on it.

If you market a consumer staple then it should be performance spend as usual. But if you work in an area which will be hit by recessionary head winds – luxury retail, restaurants, etc – then it may make sense to cut back on your shorter-term marketing spend while the recession impacts your target customers. Note, this is the reverse of traditional corporate logic which maintains short marketing spend at the expense of longer-term branding. If you really are going to cut anything, and you may want to maintain it all, it’s the performance stuff that should be reined in.

E is for the elusive balance

The greatest single analysis of the recession is Nitin Nohria’s assessment of the global financial crisis and the 9% of companies that came out of that recession in better shape than when they went in.

The secret? Smart companies learn where to cut and where to maintain their spend as the recession blows in. Firms that cut back dramatically on everything performed the worst in Nohria’s analysis. It was companies that deployed a mix of defensive moves to reduce costs while offensively investing in growth strategies that were most likely to not only survive but thrive in the recessionary and post-recessionary months ahead.

“These companies,” Nohria concluded, “reduce costs selectively by focusing more on operational efficiency than their rivals do, even as they invest relatively comprehensively in the future by spending on marketing, R&D, and new assets.”

Ignore the dumb debate from those suggesting you can spend your way out of a recession or the equally dumb counter that companies simply cannot afford to maintain their ad budgets because of cash flow. There is a more nuanced approach that can allow companies to cut the operational fat while building the branding heft. Balance is the key.

S is for strategic changes to targeting

It’s an over-simplification to suggest a recession simply shuts down some categories because they are too frivolous for the serious economic times at hand. I remember working in the champagne industry during the global financial crisis and watching, with growing admiration, as several big prosecco brands saw economic constriction as a brilliant opportunity to make a move on customers and consumers that – until then – had been firmly and exclusively located in champagne territory.

It’s a similar story for the supermarket private labels that wait for the winter of recession to arrive before entering the baskets of the middle-class shoppers. And when the spring and summer of recovery arrive and their presence, value and quality have been proven they remain a regular purchase.

‘Fiercely competitive’: Why supermarkets are committing to low prices despite inflation

There are usually tiers within most established markets. As recession hits don’t mourn the loss of some of your traditional customers trading down and away from you. Look up to the premium customers who may well be in the elevator heading down to replace them. If you, ahem, run an online training programme then you are likely to lose some of the people who would otherwise have invested in themselves during better economic times. But there are suddenly 500 multi-nationals that cannot justify flying their teams to a five-star hotel for a four-day training course with three course meals.  A dozen big companies saving 90% of their training budget on a superior solution will more than fill the gap. And they will probably stick around.

S is also for strategic changes to positioning

Hand in hand with a readjustment in targeting comes a review of product positioning. Your product or service might be the same, and the competitors just as they were before, but your customer has changed. They are now risk averse, keen to save, uncertain of the near future, tentative. These changes mean opportunity for those companies nimble enough to recognise and respond accordingly to market moves.

Ryan Reynolds, as usual, is already all over this approach. Get past the drop-dead handsomeness and Monty Python absurdist humour and Reynolds efforts with Maximum Effort and MNTN are in the vanguard of modern advertising. No surprise then that Reynolds is already positioning his Mint Mobile brand to recession hit consumers and against apparently recession ignorant competitors. His target consumer might remain the same but his message to those customers is very different. Mint gets it. Your phone company doesn’t. We are here for you.

I is for increasing prices

Recessions and inflation are usually seen as polar opposites of each other. The former slows the economy while the latter speeds things up and sends prices sky rocketing. We appear to be heading for a particularly strange period in which both forces will be at play at the same time. Sometimes called “stagflation”, it signals a more serious and enduring period of consumer pain.

It also means a particular pressure on prices. With inflation rampant it is hugely important that companies do not sit back and allow their stagnant prices to make them ever more unprofitable. Remember that when it comes to pricing the way you present a price is significantly more important than the manner in which you set that price, or the actual level of the price itself.

Marketers should be at the forefront of managing their company’s pricing efforts. Aim for fewer price increases, but signal the ones that are coming by explicitly explaining why and what the price increase will consist of. And don’t be tempted to euphemistically refer to price “reviews” or “alterations”. You are increasing prices, play it straight. Call it what it is. Explain why it is happening. Be clear on when the change will happen.

An ethnography of pricing: How and why marketers should put up prices

Linked to the challenge of price increases, don’t be tempted to run price promotions. Yes, I know Ryan Reynolds just reduced his price by half but that’s not the same as a promotion. Mint has made the decision to permanently reduce its prices to attract a new target customer. That’s a legitimate long-term strategy. As the government’s new cost of living tsar – ex Just Eat CEO David Buttress – made clear last week, there is an opportunity for British companies to cut their marketing spend and pass the savings on to the consumer with permanently lowered prices.

But more salient here is the literature on price promotions during a recession. There are a multitude of reasons why you would not discount your product in the best of times – commodification, profitability, bullwhip effects, price wars and so on. But in a recession there is an added reason why price promotions make no strategic sense.

By dropping prices temporarily, you can certainly attract some (lower margin) sales but the research is clear that when you then lift your prices back to their pre-promotional level the recessionary consumer takes offence. Either commit to permanent Ryan Reynolds-style recession prices or maintain your profits with occasional, explained price increases.

O is for orientation change

You may not have noticed it, but we’ve been living through a relatively engorged, lazy period in marketing history. Take the concept of profitability for example. It’s become an optional extra for most big businesses to generate anything like a decent marginal return over the last decade. The brands that we have lionised are very often devoid of profit and any criticism or concern at its absence. Uber has never made a profit and has no clear plan to ever make one. Caspar has led the DTC “revolution” and singularly failed to generate anything other than a loss. The giant streaming wars that now dominate TV are a bloodbath of cost over profit. And none of it seemed to matter.

Until now. The recessionary tide is finally drifting out and those companies without the ancient, essential ability to make more than they spend will find a new reality ahead. Investors are going to start using the P word again and I am not talking about purpose. It will no longer be fashionable to dismiss the need to make money with such easy disdain.

Linked to that orientation change is the ultimate marketing indulgence – brand purpose. Just as millionaires tend to focus on their purpose while working-class people dwell on rent and groceries, the arrival of recession will see a significant retrenchment in purpose wank across the marketing space.

Before some marketing bozo misquotes me as saying “recession means no more purpose” let us try and retain a level of nuance around the purpose debate. For some companies purpose is an ideal recession busting strategy that will help them survive and then prosper. But for the much broader array of brands that were playing around with purpose because it was cool and no-one was honest enough to question whether a toothpaste really needed a vision of the future, the arrival of recession will usher in a harsh reality check.

“The industry in general has just gone too far into the good,” Marc Pritchard the chief brand officer at P&G said last week in Paris. “And potentially not paying enough attention to growth.” It’s a crucial observation from the most important marketer on the planet who has attempted his own fair share of purpose wank over the years. In the middle of the largesse of the pre-Covid period P&G announced it wanted to become “a force for good and a force for growth”.

Now, with recession on the way it has recently reshuffled its corporate imperative deck. The sequence now leads with growth prioritised over good. “The order matters,” Prichard told an audience at the VivaTech conference in Paris last week. “Because first and foremost we’re in business. Our job is to innovate on our products. Our growth drives economic good. Growth drives jobs. And it decides the partners you work with, the retailers you work with. And then it enables you to do more good for society and the planet.”

Pritchard has a proven record for calling the wind just before it starts blowing. He was right about programmatic, about brand building and about Covid. And he is right about purpose. It has a role to play for some brands, some of the time. But the recession will blow a harsh wind of reality across so many of the companies that saw purpose as a panacea for every marketing ill.

N is for no more failure

And let’s add failure to the newly unfashionable concepts we won’t entertain during the recession. I am tired of everyone in marketing pushing failure as an essential pre-cursor to success. It can be. But it does not have to be. And in recessionary times, it’s really rather important that it’s not. Because you aren’t getting the pre-recessionary opportunities to fail, learn, boast about it on the conference circuit and then rework things for another go. You fail and you lose. And the lesson is you have lost and it’s over.

It’s not an imperative to fail and learn. Far from it. Blessed are those that manage to learn from the market, from occasional accidents and from success and somehow manage to avoid losing years and millions in order to become wise. As the recession arrives join me in an exorcism of sorts. Fuck failure, it’s really not welcome. It’s certainly not essential to success. And it’s especially unpopular when recession makes it a potentially fatal experience not a teachable moment.

Look at the grinning visage of Adam Neumann and glimpse the epitome of pre-recessionary thinking. Here was a guru that was lauded because his previous seven businesses had all failed. I would say that makes him an inveterate loser; idiot failure junkies thought it made him a guru with enormous potential.

He had purpose wank splattered over every aspect of his business. People, who should have known better, lapped it up. And there was zero profit, zero chance of a profit, for the company he created. In its most recent quarter it generated $718m in revenues and made a $803m loss. Even after Neumann was sacked and they restructured the business, WeWork is still losing shit tons of money. It’s a tale born entirely from the befuddled largesse of the early 21st century. And impossible to envisage in the decade ahead. Profit will beat purpose. Success will trump failure.

We face a shitty, shitty 2022 and probably worse in the year that follows. The only good news about a recession is that by the time we officially declare one to be upon us we will already have had six months of economic decline and survived it. And most recessions rarely exceed two years in length. So, we are already significantly though the worst initial stages. Keep your head down. Stay a student of history. And wait for the light at the end of the economic tunnel. It will come.

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P&G’s Marc Pritchard urges marketers to ‘double down’ on creativity amid inflation

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How to Market in a Downturn

• John Quelch
• Katherine E. Jocz

In every recession marketers find themselves in poorly charted waters because no two downturns are exactly alike. However, in studying the marketing successes and failures of dozens of companies as they’ve navigated recessions from the 1970s onward, we’ve identified patterns in consumers’ behavior and firms’ strategies that either propel or undermine performance. Companies need to […]

Reprint: R0904D

Because no two recessions are exactly alike, marketers find themselves in poorly charted waters every time one occurs. But guidance is available, say Quelch and Jocz, who have studied marketing successes (by Smucker, Procter & Gamble, Anheuser-Busch, and others) as well as failures throughout past recessions and identified patterns in consumer and company behavior that strongly affect performance. Understanding consumers’ changing psychology and habits, the authors argue, will enable firms to hone their strategies so they can both survive the current downturn and prosper afterward.

Consumers in a recession can be divided into four groups: The slam-on-the-brakes segment, which feels the hardest hit, reduces all types of spending. Pained-but-patient consumers, who constitute the largest segment, also economize in each area, though less aggressively. Comfortably well-off individuals consume at near-prerecession levels but become a little more selective (and less conspicuous) about their purchases. Live-for-today consumers pretty much carry on as usual, responding to the recession mainly by extending their timetables for making major purchases. People may switch segments if their economic situations change for the worse.

All groups prioritize consumption by sorting products and services into the following categories: essentials (central to survival or well-being), treats (justifiable), postponables (can be put off), and expendables (unnecessary or unjustifiable).

As firms manage their marketing investments, they must simultaneously assess their brands’ opportunities, allocate resources for the long term, and balance their budgets. Many make the mistake of cutting costs indiscriminately, which can jeopardize long-term performance. Instead, firms should streamline their product portfolios, improve the affordability of their offerings, and bolster customers’ trust.

The Idea in Brief

No two recessions are alike, so you’re in poorly charted waters every time. How should you market in this downturn? Resegment consumers according to their emotional responses to the recession:

Slam-on-the-brakes

• consumers feel hardest hit and reduce all spending.

Pained-but-patients

• economize, but less aggressively.

Comfortably well-offs

• keep buying, but more selectively.

Live-for-todays

• carry on as usual, though delaying major purchases.

Also identify how members within each segment categorize purchases:

• are necessary for survival.
• are justifiable indulgences.

Postponables

• are desired items that can be bought later.

Expendables

• are unjustifiable.

Tune your marketing strategies accordingly. For example, for slam-on-the-brakes consumers buying treats: shrink packaging sizes, hold prices down, and advertise your products as “you deserve it” small indulgences.

The Idea in Practice

Additional suggestions for tailoring your marketing strategies to consumers’ recession psychology:

Manage Your Marketing Investments

To get the biggest returns from your marketing budgets:

• Assess opportunities. Determine which of the four segments (slam-on-the-brakes, pained-but-patient, comfortably-well-off, live-for-today) your core customers belong to and into which consumption category (essentials, treats, postponables, expendables) they assign your products or services. Then tailor your marketing strategy accordingly.

Example: 

Prospects are reasonably good for generic products and store brands sold to slam-on-the-brakes consumers who’ll forgo familiar brands in favor of lower prices.

• Plan for the long term. Don’t panic and alter your brand’s fundamental value proposition. You may attract a few new customers. But you’ll confuse and alienate your loyal customers, weakening your position once recovery begins. Instead, keep investing in market research to discern what consumers will want when the recession eases.
• Balance your communications budget. Invest in Internet advertising: It’s targeted and relatively cheap, and its returns are easily measured. But don’t ignore broadcast media: It’s vital for building and sustaining mass-market consumer brands.

Market Throughout a Recession

To pare costs and shore up sales while preserving your brands’ long-term health:

• Fine-tune your product portfolios based on shifts in customers’ buying habits. For example, with durables purchases that can’t be postponed, pained-but-patient consumers will trade down to models that stress good value rather than enhanced features.
• Improve affordability; for instance, by reducing thresholds for quantity discounts, reducing serving sizes (and pricing), and lowering consumers’ upfront adoption costs.
• Bolster trust in your brand by reinforcing consumers’ emotional connection to the brand and demonstrating empathy for their plight.

Dell has crafted an array of messages customized to resonate with each segment; for instance, “Depend on Dell for simple solutions in tough times” and “Weak economy, powerful you.”

• Position your brand for the inevitable recovery by preparing now for possible long-term shifts in consumers’ values, attitudes, and purchasing behaviors.

The shock of the current downturn and anger over the malfeasance that fueled it will likely accelerate preexisting consumer trends toward reduced materialism, commitment to sustainability, higher expectations of corporate social responsibility, and resentment of marketing that treats people as soulless, mechanical consumers. Customers will increasingly demand that businesses act in their—and society’s—best interests. And they’ll factor companies’ business practices into their brand choices.

In every recession marketers find themselves in poorly charted waters because no two downturns are exactly alike. However, in studying the marketing successes and failures of dozens of companies as they’ve navigated recessions from the 1970s onward, we’ve identified patterns in consumers’ behavior and firms’ strategies that either propel or undermine performance. Companies need to understand the evolving consumption patterns and fine-tune their strategies accordingly.

• John Quelch is the Charles Edward Wilson Professor of Business Administration at Harvard Business School and holds a joint appointment at Harvard School of Public Health as a professor in health policy and management.
• KJ Katherine E. Jocz ( [email protected] ) is a research associate at Harvard Business School. They are the authors of Greater Good: How Good Marketing Makes for Better Democracy (Harvard Business Press, 2008).

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Marketing During a Recession: Why it Matters & Strategy Tips

Should you advertise during a recession? Effective marketing during a recession is the key to coming out of that period successful and profitable. Even in a recession, there are plenty of opportunities to build customer loyalty and gain new leads.

Recessions bring fear and uncertainty to both businesses and consumers. Making knee-jerk business decisions can be harmful in the long run. Remember, a recession is temporary. Take time to analyze how consumers spend, review your current marketing budget and strategy, and be open to change. What should you do in a recession? Here are five things that companies should keep in mind when developing their recession marketing strategy.

What Should You Do About Advertising in a Recession?

How does a recession affect consumer habits.

• Reasons Content Marketing is Essential
• Recession Marketing Strategy Tips

Make the Right Changes to Your Marketing Strategy

Learn more about SEO vs SEM and how each may benefit your business during a recession .

Should you stop marketing during a recession? Absolutely not. What should you do instead? Rather than cutting the marketing budget, get innovative with your strategy for effective recession advertising. If you make calculated decisions, you can stay profitable or even increase profits during a recession.

It’s important to observe and understand how consumers are spending and where they’re saving. What can your business offer customers to give them peace of mind during challenging times? How do you change your marketing strategy to better suit their needs? Here are a few tips for what you should do during a recession:

• Pay attention to how consumers and customers are spending
• Don’t cut the marketing budget, increase it instead
• Explore new marketing strategies to target both existing and new customers

What do consumers buy during a recession? Most consumers alter their spending habits when the market takes a nosedive. Jobs are often at risk, and inflation increases prices, forcing consumers to plan for the worst. Some will be harder hit and cut out nearly every cost except for essential items such as bills, gas, and groceries. Others may cut down on some luxuries but occasionally splurge on non-essential items.

Understanding how your existing and target customers adjust to life during a recession is essential. Where are they cutting costs?

Making the In-Home Experience Better

During a recession, consumers are less indulgent , skipping dinners out and vacations as they reduce their spending. People are spending more time at home. Rather than eating out, they’re cooking their meals. Instead of heading to the movies, they’ll watch a film at home.

Bargain-Hunting is Everything

Consumers batten down the hatches during tough financial times. Bargain hunting and coupon clipping become routine for many households to cut costs where they can. They may purchase off brands instead of name brands or stop purchasing specific items altogether.

Brand Loyalty is More Impactful Than Ever

A recession is a great time to improve brand loyalty with existing customers. How can your product or service ease their mind during a difficult time ? Don’t forget about your existing customers. Target them with content tailored to their needs.

5 Reasons Marketing in a Recession is Essential

Marketing is just as crucial during a recession as in less turbulent economic times. But, should you advertise as you would in a strong market? Like consumers, businesses must also adapt during a downturn . Consumers change their spending habits as they focus primarily on essential purchases. As a result, companies must adopt new or alter existing marketing strategies and campaigns to meet the needs of their customers.

Cutting Costs Will Result in Long-Term Loss

While cutting marketing costs during a recession may sound like a logical business move, it can do more harm than good. Cutting marketing costs will decrease brand awareness, search result ranking, and brand loyalty. This leaves plenty of room for competitors to fill the void and take the lead in the market.

Maintaining your marketing budget and having an effective strategy will ensure your online presence remains strong, building confidence and loyalty with new and repeat customer s. Companies with enough foresight to invest in post-recession recovery will see exponential returns as the economy grows again.

• Decreases brand loyalty
• Opens the door for competitors
• Decreases brand awareness

Consumer Needs Change, Campaigns Need to Evolve

During an economic downturn, the needs of consumers change. Consumers purchase essential items and are less likely to splurge on luxury items, especially in low and mid-income households.

While recycling existing content or maintaining the same strategy may be tempting, you’d be disappointed in the results. Re-evaluate your marketing strategy based on the spending habits and needs of consumers. Businesses that recognize these changes and invest in keeping up with them will perform much better.

• Learn how consumers are spending
• Re-evaluate your marketing strategy
• Do not recycle existing content

Decreases in Competition Give You a Leg Up

Budget cuts in departments like research and development or marketing mean that fewer new products are being released, and the output of existing products may slow as customers decrease spending. On the bright side, releasing fewer products means plenty of room to increase market share .

Maintaining budgets for R&D and marketing will allow you to focus on creating and improving products and building strong marketing campaigns to show consumers how your product can solve a problem they’re facing.

• Maintain or increase budgets for R&D and marketing teams
• Fewer new products released leaves room to gain market share
• Use targeted campaigns to show consumers how your product can solve a problem they’re facing

Fewer Product Launches Allow Increased Market Share

Two primary drivers of market share are campaigns and product launches . Consumers are less likely to gamble with a new product during a recession, so fewer goods are coming onto the market. Fewer new products mean fewer options for buyers, leaving them with little to no reason to shop around. A recession is a great time to invest in a new product to increase your company’s market share.

• Fewer new products are introduced during a recession
• Consumers have fewer options
• Investing in a new product will increase market share

Stay Relevant to Consumers

Branding during a recession is necessary to stay relevant to customers. Businesses using content that caters to consumer spending during an economic boom will not yield positive results when the economy declines. Companies should closely evaluate how they can remain relevant to their customers.

How can you track the efficacy of your efforts ? Key Performance Indicators, better known as KPIs, can help you understand what campaigns are working. This allows your business to build more effective marketing campaigns to target consumers.

• Build effective marketing campaigns
• Use KPIs to track performance
• Evaluate how to remain relevant to customers

Visit our blog for more helpful marketing tips and advice. 

6 Recession Marketing Strategy Tips

Recession trends show that marketing is crucial to a company’s success and odds of surviving the slump. Businesses that come out of recession strong don’t make significant cuts to their marketing budgets. Take a look at these tips for ensuring sales and leads with a successful business strategy during a recession.

Build Upon Customer Loyalty

Customer loyalty is an asset to companies during a recession. It tends to be easier and more effective to market to existing customers than to bring in new clients. Make sure your existing customer base knows you appreciate them by keeping in touch regularly. Use email campaigns to send out positive messages, surveys, and coupons. By continuing to market to your customers, you’re showing stability, giving them confidence that your company will weather the storm.

• Make your customers feel appreciated
• Keep messaging positive to show stability
• Use email campaigns to keep in touch with customers

Invest in Content Marketing

Often, companies will rush to cut as many costs as possible once a recession hits. This decrease in competition is excellent news in the world of digital marketing. How so? Ranking well in the search results becomes easier as fewer people invest in sound SEO and content marketing strategies.

It becomes even more essential to deliver compelling content during a recession. Not only will it increase traffic to your website, but it will bring relevant traffic to your business. Implementing strategic tools like keyword research and strong calls to action will improve your visibility in the search results. A bonus of content marketing is the low cost.

• Competition lessens as fewer companies invest in content marketing
• An effective content strategy will increase relevant traffic 
• You’ll have a strong online presence

What is Your Competition Doing?

While making changes within your own marketing campaigns, don’t forget to check in on your competition. Have they cut back on their marketing and advertising? How are they communicating with their customers? If you’re seeing subdued marketing efforts from a competitor, chances are they’ve cut back on their budget, allowing your business to get ahead in the market.

• Check on the marketing efforts of your competitors
• Cuts at your competition can help you gain market share
• Increase your own recession marketing

Consider Tiered Services 

What sells in a recession? Creating tiered pricing in a recession is a great way to bring in new clients and help existing customers save money. Many companies offer at least three different pricing tiers with additional perks in the higher-priced tiers. It provides options to those who may not need all of the features in the more costly bundles.

Even offering a free version of a product with minimal features will draw in more customers and build loyalty. Content marketing can target existing customers, even those on the free or lowest priced options, to upsell them to a higher tier when they’re in a financially stable position.

• Tiered services provide your customers with options
• Allows struggling customers to save by offering cheaper plans
• Opens the door for the sales team to upsell to customers

Don’t Make Too Many Drastic Changes

Change is good and is a must when it comes to marketing during a recession. Rethinking your market and content strategy is necessary. However, avoid making any significant changes, such as rebranding. Big changes may confuse customers or give the illusion that your company isn’t doing well . Be consistent and concise in your messaging.

• Avoid major changes during a recession
• Adjust your marketing strategy, but keep messaging concise

Adjust KPIs and Marketing Goals 

Once you’ve decided on your strategy, how can you determine what is and isn’t working? Analytics and Key Performance Indicators, or KPIs, will help you measure and assess the performance of your company’s recession strategy . Your company can use this information to set realistic goals during the recession. You’ll also save money by quickly identifying and scrapping ineffective campaigns and instead spend more time and money on content that is performing well by bringing new leads and sales.

• Use analytics to set realistic goals
• Get rid of ineffective campaigns
• Put more time and money into content that is working well

Work with Augurian to discover the benefits of website analytics and ensure your marketing strategy is a success.

Uncertain times are hard on businesses, making advertising during a recession even more of a necessity to generate leads and sales. Tough decisions need to be made regarding budgets and even staffing. Thoroughly measure and assess your current strategy and how consumers spend, and keep an eye on competitors to make careful decisions. It’s important to stay level-headed and not make impulsive decisions that could jeopardize your company. Here are three considerations to keep in mind for your recession marketing strategy:

• There is less competition in content marketing as other businesses make cuts
• Understand the needs of your customers and give them options
• Invest strategically in your marketing budget

Partner with the Experts at Augurian for Successful Marketing During a Recession

A recession brings uncertainty to businesses. Jobs may not be as secure as they once were, cuts must be made, and the spending habits of consumers change. Will your business make it through? Marketing in a recession will show customers that your company is strong and stable. It lets you connect with consumers and let them know how your product can help them. With the right marketing strategy , your business can come out of the recession successfully.

Recessions bring opportunities to build client relationships. Remember, the customer journey doesn’t end with the sale . It’s important to let your customers know that you haven’t forgotten them and appreciate their loyalty. Effective content marketing in a recession can help your business accomplish this. Whether economic times are good or bad, partner with Augurian to increase brand awareness and connect with new prospects.

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Advertising During a Recession

Advertising During a Recession: Strategies for Success

Introduction.

During times of economic uncertainty, businesses often face tough decisions regarding their budgets, and advertising is an area that tends to be scrutinized. However, history has shown that maintaining a visible presence in the market during a recession can lead to long-term benefits. This article explores strategies for advertising during a recession and how businesses can navigate challenging economic conditions to emerge stronger on the other side.

Rationale for Advertising During a Recession

A. maintaining brand visibility.

Reducing or cutting advertising during a recession can result in a loss of brand visibility. Maintaining a consistent presence helps businesses remain top-of-mind for consumers even in challenging times.

B. Capturing Market Share

A recession often sees decreased ad spending by competitors. This presents an opportunity for businesses that continue advertising to capture a larger share of voice in the market.

Strategic Focus on ROI

A. emphasis on measurable results.

During a recession, every marketing dollar counts. Businesses should focus on channels and strategies that offer measurable results, ensuring a clear return on investment (ROI).

B. Digital Marketing and Analytics

Digital marketing channels provide robust analytics. Businesses can leverage data to track the performance of campaigns, optimize strategies, and allocate resources where they yield the best results.

Targeted Marketing and Personalization

A. identifying core audiences.

Understanding the target audience becomes crucial during a recession. Businesses should identify core customer segments and tailor marketing messages to address their specific needs and concerns.

B. Personalized Communication

Personalization creates a stronger connection with consumers. Tailor marketing communications to address the challenges individuals may be facing, showcasing empathy and understanding.

Value-Oriented Messaging

A. highlighting affordability and value.

During tough economic times, consumers are more value-conscious. Advertisements should emphasize affordability, discounts, and the overall value proposition of products or services.

B. Promoting Essential Products or Services

Shift focus to products or services that are essential or fulfill immediate needs. Highlighting practical solutions positions the business as a valuable resource for consumers.

Multi-Channel Approach

A. diversification of channels.

A recession is not the time to rely solely on one advertising channel. A multi-channel approach spreads the risk and ensures that the brand reaches a diverse audience.

B. Optimizing Cost-Effective Channels

Evaluate the cost-effectiveness of different channels. Digital platforms, social media, and targeted online advertising often provide cost-efficient options with measurable results.

Negotiating Ad Space and Partnerships

A. leveraging relationships with media outlets.

Established relationships with media outlets can be beneficial. Negotiate favorable rates for ad space, explore added value options, and seek partnerships that align with shared goals.

B. Collaborative Marketing Initiatives

Partner with other businesses for collaborative marketing initiatives. Pooling resources for joint campaigns can be mutually beneficial and cost-effective.

Flexibility and Agility

A. adapting to changing conditions.

Recessions are dynamic, and consumer behaviors can change rapidly. Businesses should remain agile, ready to adapt advertising strategies based on evolving economic conditions and market trends.

B. Real-Time Adjustments

Monitor the performance of campaigns in real-time. If certain strategies are not yielding the expected results, be prepared to make swift adjustments to optimize effectiveness.

Building Trust and Transparency

A. transparent communication.

Open and transparent communication is vital. Be honest with consumers about the challenges the business may be facing and how it is actively addressing them.

B. Fostering Trust Through Consistency

Consistent messaging and actions build trust. Businesses that maintain a steady presence in the market and deliver on promises strengthen their relationship with consumers.

Leveraging Social Responsibility

A. community-centric initiatives.

Showcasing social responsibility creates a positive brand image. Support community-centric initiatives and communicate efforts to contribute positively during challenging times.

B. Aligning with Consumer Values

Consumers appreciate brands that align with their values. Advertising messages that resonate with social and environmental consciousness can foster a stronger emotional connection.

Monitoring and Measuring Success

A. establishing key performance indicators (kpis).

Set clear KPIs for advertising campaigns . Whether it's brand visibility, lead generation, or sales, having defined metrics allows businesses to measure success effectively.

B. Periodic Evaluation and Adjustments

Regularly evaluate the performance of advertising strategies. Periodic reviews enable businesses to identify what's working, what needs adjustment, and where resources should be reallocated.

Case Studies of Successful Recessional Advertising

A. examining notable examples.

Analyze real-world examples of businesses that successfully navigated advertising during recessions. Highlight key strategies and outcomes that contributed to their resilience.

B. Learning from Challenges

Explore instances where businesses faced challenges during a recession, extracting valuable lessons for adapting advertising strategies in unpredictable economic climates.

In conclusion, advertising during a recession requires strategic planning, agility, and a focus on building lasting relationships with consumers. Businesses that continue to invest in advertising, adapt to changing conditions, and prioritize value-driven messaging position themselves not only to weather the economic storm but also to emerge stronger in the post-recession landscape.

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Recession Marketing Examples: Learn from 2008’s Winners

By lee dussinger.

As 2023 trundles along the mire of economic uncertainty, the economists estimate that an official economic downturn will be upon us soon. Inflation is still high and the Fed is still raising rates. As a marketer, this means your strategies must adapt for shallow consumer pockets and your own decreased marketing budgets. When formulating a recession marketing strategy that wins in uncertain economic times, it’s important to identify where you are now and what you can expect – and then start working to implement your ideas. One of the best ways to find your way, is to learn from those who’ve been here before and succeeded. To find inspiration, we’re breaking down recession marketing examples from the Great Recession of 2008 !

Before we dive into the research, recommendations, and thought experiments, let’s establish a key tenet: marketing in a recession is even more challenging . However, a smart playbook, a strong brand, and a well-formulated plan can keep you afloat. In fact, if you invest precisely and execute well, you can even gain ground while other brands are forced to retreat. Let’s explore the fundamentals of the strategy, some market-tested examples – as well as the type of marketing spend investments that protect your market share now and build the foundation for future success .   

Explore 3 Successful Recession Marketing Strateg ies

In a recession, reduced consumer spending slows growth for the vast majority of small businesses and enterprise companies alike. The worst thing to do about it is nothing. You can’t take your standard marketing plan and hope to apply it – sans changes – to the market conditions of a recession. Things will be different, and cost-effective optimization is needed. You’ll have less ad spend, you may be dealing with budget cuts. On the other hand, Whether this is a gold rush of potential for your business or a storm to be weathered, you need to expect change. Successfully marketing or advertising in a recession requires investigation and adaptation . Let’s find our footing by analyzing which markets are best set to survive and thrive. To give us real world insight for 2023, we’re exploring recession marketing examples from the Great Recession of 2008. 

When looking at who does well at marketing during a recession, we’ve identified the 3 E’s – Essentials, Escapes, and Established Brands.  

Essentials: Growth Remains Slow & Steady

Examples: 

• Healthcare 

By definition, Essentials have demand…regardless of an economic slowdown. Your loyal customers still need you. Even with belts tightened, these sectors steadily chug along. As long as your brand keeps meeting customer needs, you’ll continue to be relevant. The worst case scenario for these industries often looks like slower than average year-over-year growth. Healthcare is perhaps the ultimate example of a need – not a want. Thus, few sectors (if any) are better primed to maintain a consistent message and weather a recession with ease. 

For grocery stores, the money that is not being spent on restaurants and takeout is their victory. Grocery brands advertising in a recession find success rolling out messaging that highlights value and quality. One of our favorite recession case studies is when Target debuted the tagline, “Expect More, Pay Less” – and subsequently saw 30% growth of their Archer Farms grocery line.  Discover how Target creates a cohesive brand experience . This enabled Target to speak directly to the pain points of a newly price sensitive customer base. In fact, it’s not impossible to pick up new customers with value oriented messaging.

Takeaway : If you’re guiding a brand that qualifies as an Essential, this period will still feel turbulent. You have work to do building a recession marketing strategy that gains with your target audience, but you have a head start. 

Escape Industries: Ready to Take Advantage

• Candy  
• Entertainment

Financial hardship brings stress – in a recession, agonizing over finances becomes the norm. Getting a break from it all is more welcome than ever. It may sound simple – but statistics from the last recession prove it – Americans will pay to take a breather from their stress . Those diversions can look like a gin and tonic after dinner, a candy bar, delving into a fictional universe, or countless other forms of escapism. While these sectors share little in common traditionally, they are often connected during conversations on marketing in a recession as the are influenced by the same spending habits.     

The growth of “escapism” is less the result of deliberate advertising spending and more a case of outward forces guiding consumer behavior. The growth trajectory can resemble a medium-sized bump compared to average trends. Of course, sometimes the increase can be meteoric, as was the case with Activision’s 2008 growth. Desire for escapism certainly contributed to the game developer’s performance – not to mention the releases of two best-selling titles: Guitar Hero 3 and Call of Duty: Modern Warfare! Plus, just think about how well escape industries performed during the recent 2020 pandemic.

Takeaway : If you’re in one of these Escape industries – and your brand message resonates with your audience – a recession can usher in a period of opportunity, provided you have the right marketing plan. 

Established Brands : Able to Survive Any Challenge 

Example: 

Brand awareness is always a winning strategy. Times may be tight, but a beloved brand still holds enormous sway. While Essentials come first and Escapes take on new prominence for many, the brands people love never leave. When consumers have less money, they spend where they feel an emotional connection. That’s what a brand is – a company’s beliefs, visions, imagery, and the way it makes people feel. There are countless cases, but let’s consider the example of Coca-Cola during the last recession. 

Soft drinks are the definition of a want, not a need. However, more bottles and cans of Coke were consumed in 2009 than any other year in history up to that point. Why? Because, backed by their Open Happiness marketing campaign, the Coca-Cola brand represented joy . That was something people wanted more than ever. Americans bought more Coca-Cola that year and throughout the recession for the same reason they bought it every year – because the brand spoke to them. It was more than carbonated water, sugar, caramel coloring, and caffeine – it was happiness.

Challenging economic times didn’t change customer spending habits enough that they would stop reaching for a Coke. The customer experience with the brand was more than enough to keep Coke afloat.

Takeaway : For a plurality of businesses, the most potent recession marketing strategy is to have – or to build – a brand that means something personal.     

When Marketing in a Recession, Bet on Brand

Though they are enviable in a looming downturn, Escapes and Essentials only represent a minor fraction of businesses. The overwhelming majority of companies don’t occupy those spaces and never will. Don’t despair, though, because almost any business can craft a brand that inspires their target audience – beyond just what their product offers them. If you have a strong identity, brand marketing in a recession can pay huge dividends .

So, is that where you are? Do target customers know your values and vision? Does your brand resonat, beyond the simple transaction? 

Adjusting your marketing during a recession is the perfect opportunity to invest in brand building like never before. Here are 5 reasons why an economic downturn can be the ideal inception point for companies that have left brand on the back burner:

• More Room for Your Brand – While marketing thought leaders advise against slashing marketing budgets to save short-term capital, it happens without fail. Across most sectors and platforms, paid and organic advertising in a recession decreases. A result of marketing budget cuts, that’s to your benefit because there is more room than ever for your brand story. If your competitors back off, you can seize their space – for a reduced investment. On paid platforms, count on a discount on your cost for impressions AND fewer competitors taking up room. In the content space and on social media channels, you can expect less noise competing for audience attention as other marketing departments may be trimmed. This also might be the time to consider brand new marketing channels.  
• Your Target Customers are Paying Attention – Coupled with this relative marketing drought, people are more apt to receive your message. Think about the beginning months of pandemic lockdowns – Americans spent less money and less time outside the home. Media filled the entertainment void. You can expect a similar experience during a widespread financial slowdown. Before, dinner, drinks, and events were the primary source of entertainment. Now, cheaper alternatives in the form of streaming platforms and scrolling on social media take center stage. The right marketing strategy during a recession will take advantage of this. Plus new products you release will have much more ready attention.
• Doing More with Less – Although scaling back marketing in a major way is a mistake, doing more with less is a maxim to follow. When pursued properly, that often looks like fewer campaigns and reduced focus on performance marketing campaigns. Performance marketing is most successful during a period of high consumer spending (with comparably high ad spend). So, rather than paying a premium to directly acquire single customers (who are more elusive), you can invest in creating a rich brand experience. An example of this, working in real-time is Airbnb. With an expanded focus on brand marketing, their 2022 Q3 report showed their strongest quarter ever! Bottom line: just because marketing spend is less doesn’t mean your results have to be.   
• Brand Works Now and Later – Redirecting focus from strictly performance campaigns is smart tactics. Rather than paying to acquire a one-time interaction, you invest in a foundation for the future. That doesn’t mean that you sacrifice the present, however. Consider that perfectly-timed brand messaging enabled Coca-Cola to sell more soda than at any point in human history during the Great Recession. Build brand awareness now, and benefit later. This makes brand marketing one of the most cost-effective types of marketing.
• Great time for Digital Marketing – From search engine optimization (SEO) to working with social influencers, digital marketing consists of a variety of disciplines. However, these are traditionally among the most cost-effective options for a marketing plan. SEO enables your business to go after search engine rankings for keywords important to your brand and business. Compared money into digital advertising spending, SEO enables you to earn rankings in a fairly low-cast way. In addition, One of the major advantages of digital marketing in tight times are that the availability of metrics makes it easy to understand what’s working.

Align Your Marketing with Opal 

The reason that we at Opal place such a focus on brand marketing is that we have a front-row seat to its effectiveness. Leading international brands like Target, Activision, Microsoft, Rothy’s Starbucks, and countless others trust the Opal Platform to plan and visualize their marketing initiatives. If you’re considering a focus on brand marketing in a recession, this may be the right time to adopt strategies from these leading brands and discover why they rely on Opal. Whether you want to plan digital marketing, traditional, or a combo of the two, Opal is the platform.

Opal is the marketing planning platform built for marketers. What sets Opal apart from other organization tools is the focus on experiencing your brand through the eyes of your audience. In practice, that means your entire team has the opportunity to see and collaborate on true-to-life content previews. Your team will work more efficiently, collaborate better, and never let off-brand messaging reach your audience. 

Explore the Opal platform even more right here – and even request a free 30 day trial .

About the Author

Lee Dussinger

Senior content & product marketer.

Writing about campaign briefing, brand alignment, omnichannel marketing, content operations and more

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Modern Marketing Dilemmas: How should marketers stand up to recession?

Global Thought Leader, Brand Guidance

Presbyopia comes with age. You reach 40 and suddenly distant objects become clearer. The word itself ‘presbys’ = ‘old man’ implies you’ve entered an older age group. And with age comes the joy of far-sightedness, also the difficulty focusing on up-close things.

In this article, we will explain why some degree of presbyopia is good for every business; marketers who have the ability to see beyond inflation, recession and any other type of financial dislocation will not get knocked off by the crisis. They will rather emerge victorious to tell their story of endurance.

Managing your marketing budget: Keep investing (but note exceptions apply)

In 2008, right at the heart of another severe worldwide economic crisis, Financial Times’ posters all around the globe discouraged businesses from cutting ad spend. And although the joke is still on marketers , it feels we’ve learned a thing or two from past economic downturns . I believe that marketing’s inflection point is in full view. Never before in our industry has there been a default, choral response to a crisis: “maintain your marketing investment” the experts say, all giving convincing reasons for it.

Unless of course your category is slowing down. When demand fades for a product group, your growing market share might not equal profitability. For instance, just before its downfall, Nokia’s market share was still growing, but the whole category was gradually shrinking. Our advice is to stay cognisant of what’s happening in the market, in your category and be attuned to the new set of circumstances for consumers.

The art of prioritising

Consumers are very familiar with prioritising. In good times and bad, people have been rating their needs and wants in order of priority. Each person (or family) searches for their own optimal compromise; they save money on some stuff and spend more on others.

With the rise in prices, this give and take intensifies. In our latest Global Issues Barometer study , three-quarters (73%) of the global population exasperatedly admitted that they don’t expect their incomes to keep pace with inflation. Then, they went to lengths to describe what measures they already take to conquer affordability by managing price hikes .

During this ‘self-triage’ of consumers’ needs and wants, businesses are under pressure to manage challenges and re-prioritise too. Instinctively (and rightfully so), their survival imperative is to stay out of the ‘save money’ bucket; albeit their true aspiration…a worthy place in the safe bucket.

This new crisis shall pass too before the next one surfaces. With our data-fuelled long-sightedness we see a series of disruptions on the horizon. For that, we urge you to stay far-sighted too; take note of these three evidence-based marketing acts and don’t get entirely caught up in the moment.

1. Keep calm and carry on advertising

Whether you are a big player or a small one, advertising will remind people why you should be bought. Because a brand that gets remembered gets bought. That’s why the LinkedIn B2B institute playfully advises businesses to create ‘ memorable rather than clickable ’ advertising.

Below we explore two case studies that show the crucial role of marketing and the importance of maintaining it, covering:

• The role branded memories (long-term memories built over time, on top of short-term memories) play in immediate sales.
• How these branded memories also affect a company’s profitability levels for years to come.

Additionally, using analytics and time series data, we’ve modelled and simulated real scenarios for our clients. We discovered that although it’s possible to rectify the short-term memory gap with surplus advertising the following year, it will take several more years and more media investment than was originally cut to repair the damage made to long-term memories, and thus to long-term sales.

Case study 1: The long-term impact on brand equity

Source: Kantar’s case study, FMCG, UK

A leading UK beverage brand with a stable market share decided to go dark for a year (Year 2) in region B while continuing to invest in region A. The effects of this choice of direction for their marketing during the recession included:

• Market share declined by 2 percentage points in region B where no investment was made, while it remained stable in region A. In practice, the main effect of most media investments is to maintain market share rather than increase it.
• The resumption of marketing investment the following year (Year 3) did not recover the lost market share.
• The long-term for the brand was crippled.

The message is clear: Short-term losses and gains have a long-lasting effect, and the cumulative impact of going dark can be devastating for a brand's future profitability.

Case study 2: Serious long-term consequences of drastic budget cuts

Source: case study, Telecoms, Germany

A leading German telecommunication brand was under pressure to reduce or eliminate all media investments by mid-2022. Using time series regression to model branded memories of media investment to understand efficiency, we simulated the likely impact of going dark for six months. We concluded that:

• The decline is strong for both short-term and long-term memories.
• Recovery is possible but would require additional investment and several months.

The message again is clear: It will take a long time – and require more media investment than before the downturn – to repair the damage to long-term memories and long-term sales caused by the advertising disruption.

Regrets from ASOS over a lengthy period of under-investing in their brand and elation from Airbnb over their ‘strongest ever’ fourth-quarter results hit the headlines in recent months. The moral of both stories is that continued investment in brand-building advertising is hugely beneficial to brands in the long term.

2. Keep calm and pursue the market share you want

There is enough empirical evidence to assert that brands with a share of voice (SoV) greater than their market share (SoM) tend to grow. Conversely, brands with a SoV smaller than their SoM tend to decline.

Analysis of the IPA DataBank by Les Binet and Peter Field suggests the growth rate of brands over time is proportional to the difference between SoV and SoM. This is usually called extra share of voice (eSoV).

By how much exactly?

We’ve analysed the impact of eSOV in hundreds of categories around the world in order to evaluate the impact of eSoV on brand growth in a recession:

• Some categories are very sensitive. For example, a European drinks category where for every 10 points of eSoV a brand can expect 1.52 percentage points market share growth per annum.
• Most other categories are a lot less sensitive. On average, a brand would need to sustain an eSoV of 20 points to drive market share growth of 1 point per annum.

This illustrates how slowly market share responds in most cases to communication - and why it is so important to measure long-term effects. As I mentioned before, media investment largely aims to maintain market share rather than grow it.

Clever marketers aiming for ambitious market share growth will hope to outperform this average by making their budget work harder with stronger creative and better media deployment.

Most companies spend 8%-12% of their revenue on marketing. But this benchmark is easily broken by businesses aiming higher. If like me, you opened your eyes widely at the news that ByteDance (parent company of TikTok) spent $19bn (31% of its revenue) on marketing , it’s because they aim for the moon; going after the market share they want rather than what their growth trajectory indicates.

Evidence confirms that media spend plays a crucial role in gaining and losing market share. A data truth that is even more valid during a crisis, when one’s spend will likely be filling awkward silences from their competitors. Alex Biel and Stephen King provide the evidence . They analysed consumer businesses in the Profit Impact of Modern Strategy database during recessionary and growth times and found that their gains were greater during the former. With an increased ad spend by more than 20% these brands gained +0.9 SoM during recessionary times vs. +0.5 SoM during growth (expansion) times. “In other words, the possibility of gaining share through increasing advertising appears to be greater when the total market is soft.”, as they say.

The case of food manufacturing conglomerate Kellogg’s gaining dominance in the cereal market during the Great Recession is well known; Kellogg’s doubled its ad budget whilst Post – their competitor – cut it back. But more recently, during the pandemic, the cases of P&G and Coke re-affirmed this theory – both brands kept their marketing investment in and saw a significantly better share of voice as a result.

3. Keep calm and stay focused on profits

Profit is not a dirty word, not even in inflationary times. And although many of us feel somewhat infuriated by the growing cases of profiteering vs. profit , my clarity on the role of the marketer remains intact.

Great marketing leads to great profits. The stronger the brand, the higher its pricing power, and the more margin it makes. And it’s not just us saying so. Using the IPA dataBANK, Binet and Field have proven that investing in eSOV during a recession will drive long-term profit, also that by making ‘reducing price sensitivity’ your campaign objective (vs. share gain or share defence), the profit gained will be much greater by comparison .

But how can a brand maintain its pricing power during a time that consumers are looking for price reductions?

We found the answer in our Meaningfully Different framework (MDf), a framework designed to measure the different dimensions of a brand’s equity. Pricing Power  is the offspring of Meaningful, Different and Salient, put together in precise quantities. Meaningful Difference accounts for 94% of a brand’s pricing power whilst salience contributes with a mere 6%.

Meaningful Difference drives Pricing Power

Source: Kantar BrandZ database

So, how does this affect how you plan your marketing during a recession?

• The more a brand is perceived as different, in addition to the belief that it stands for something, the more valued it is.
• People are not looking to cheapen every aspect of their lifestyle, and as they prioritise, meaningfully different brands stay at the top of the list.

The case of Unilever stands out here. For over a century, they’ve been creating brands that people want to buy and are willing to put in consumers’ safe bucket. Whilst they could easily play in the commodity business, they waltz elegantly in the brand business. Their recently released quarterly results further validate the concept of Pricing Power and its direct link to healthy margins.

Make the move from price to value

Paying is not an apathetic affair for humans. We feel pain every time we pay for something. Behavioural scientists call this ‘ the pain of paying ’, a pain which becomes more acute as the cost-of-living rises.

Businesses, on the other hand, feel a different kind of pain. As they are challenged to safeguard their profits as costs increase rapidly, some resort in shrinkflation tactics. They offer the same packaging but with less product in the forlorn hope that consumers won’t notice. They always do, by the way, even if not instantly.

Others have taken a different path in times of turmoil. Genki Forest, for instance, decided to go after a younger audience through its healthy positioning and developed new products with 0 sugar, 0 calories and 0 fat in half as much time as their competitors. Maggi and KFC India collaborated to deliver their fusion bowl of popcorn chicken and noodles bringing double the value to consumers with their successful partnership. Cafu has created a completely new re-fuelling option for motorists, saving them time and effort.

The examples of brands that have proudly demonstrated what makes them special and relevant in the consumers’ lives are many. They’ve positively levelled with the consumer’s thrifty mindset and spoken with clarity about their tangible benefits, that surplus value they are bringing when it’s needed most. They’ve exhibited empathy and consumer understanding  and have proven that growth in recession really is possible.

It’s not a contradiction; brands can maintain their Pricing Power in ways that are also affordable to consumers. By focusing on your brand as a value producing asset, you align your interests to those of the consumers’. Because consumer choice will always tilt towards brands that are meaningfully different, both now and in the future.

From helping you to navigate risks with proactive investment to showing you how to use today’s trends to improve in the future, we’ve got everything you need to be successful when marketing in difficult times.

Read more from the Modern Marketing Dilemmas series:

Does marketing really create value for your brand?

How should your brand react when prices are going up?

Is brand differentiation an effective way to reduce customer price sensitivity?

What role does brand play in the consumer decision journey?

Where does performance marketing meet brand building?

The definitive guide to brand-building.

Discover how strong brands provide value for businesses and shareholders. 

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Research on Advertising in a Recession

A critical review and synthesis.

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Click on the PDF link for the complete article.

Based on an extensive review of research on advertising in a recession, the authors identify over 40 related studies. Ten of these studies involve original empirical analyses of cross-sectional or time series data. The rest are theoretical discussions, reviews, cases, or opinions. The empirical studies may be classified into four groups based on the dependent variable analyzed: (1) sensitivity of advertising expenditures to the economy, (2) sensitivity of brand versus private-label share to economic expansions and contractions, (3) impact of advertising in a recession to sales or market share during or after a recession, (4) impact of advertising in a recession to profits during and after the recession. The authors critically review these studies and synthesize the major findings.

• © Copyright 2009 The ARF. All rights reserved.

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Exciting news: Grocery TV has expanded its in-store retail media network into pharmacy!

Advertising during a Recession: To Spend or Not to Spend?

As the economy goes through constant changes, and with a potential recession on the horizon, folks in the advertising industry are thinking about the best way to position themselves. What’s the best move for marketers to make at this point? How should you approach your strategy as we head through the holidays and into 2023?

An important history lesson to keep in mind about economic downturns is that investing/maintaining ad spend pays off big time for brands.

One report shows that 60% of brands that increased media spend in previous recessions saw greater ROI, and those that spent more on paid advertising saw a 17% increase in incremental sales. By contrast, marketers who cut ad spend risk losing 15% of their revenue during a recession.

In this article we’ll touch on historical recession takeaways, share effective marketing strategies, and update you on the latest consumer behavioral shifts to inform your media planning.

What does history tell us about advertising during a recession?

Brand marketing budgets are usually the first to get cut during times of economic uncertainty, but studies show that sustained investment in brand/share of voice leads to improved awareness, performance, and competitive advantage.

Thinking of the long term is key

This analysis of brands during the 1990-1991 recession shows us the negative effect of cutting ad budgets— meanwhile, the sales benefits kept growing for those that invested even in the years after the recession.

Despite the possibility of taking a short-term hit to profitability, it’s clear that brands should think twice about “going dark” with their ad campaigns.

The study outlines how major brands including Amazon, Walmart, T-Mobile, General Mills, and Hershey's continued to allocate funds toward advertising and were able to deliver stronger business outcomes.

For example, T-Mobile increased its TV investment in 2008 and 2009, resulting in a compound annual growth rate of 21% between 2008 and 2011.

Consumers are more likely to remember your brand

A 2008 study asked people to complete the statement: “When you see a company advertise in a down economy…” And 86% said that brand is top of mind when it comes time to make purchase decisions.

Your message is more likely to be noticed in part because if others are pausing their marketing, that leaves fewer ads in the market for you to compete with.

5 marketing strategies to help maximize your ad spend

When it comes to preparing your marketing strategy for an unstable economy, looking at historical data is essential. But what other guidance have we been hearing from experienced people in our industry?

1) Stay nimble

You’ve probably been hearing this since the start of the pandemic, but flexibility is a must. Whether it be creating a flexible spending structure, keeping campaign creative dynamic and easily adjustable, or working with responsive/accommodating marketing channels and media networks.

2) Spend efficiently

When the going gets tough, consider what the best ways are to maximize the impact of your campaigns without breaking the bank. For example, where does your audience spend the most time on and offline (and has this changed due to the state of the economy)? What days or times are you most likely to reach them?

It’s no secret that we’re fans of digital out-of-home’s (DOOH) potential, and our team recently wrote about 6 best practices for brands who want to make the most out of their ad spend when using this channel.

3) Prioritize value-based messaging

This helps build a genuine connection with your audience. Think about how your brand and its mission add value to consumers amid economic challenges. What impactful beliefs or messages does your brand want to highlight?

For example, in the 2008 recession General Mills promoted the value of in-home eating, which helped them grow a couple of percentage points faster than when the economy was doing well.

4) Consider your audience’s position(s)

Remember that your customers may not all have a uniform experience during a recession or periods of inflation. Instead of offering a blanket solution for people, reflect on consumer data to create personalized messages or offers that will speak to each audience segment.

5) Innovation is your friend

Did you know that major brands like Trader Joe’s, Microsoft, Adobe, and Electronic Arts (EA) all started in various recessions over the past century? Though you might not be in that exact position, the point is that pushing other innovations in areas such as pricing (e.g. new service tiers/packages) or product launches can really pay off.

Doing so will not only help you stand out but also maintain consumer enthusiasm. Take Netflix for example— during the 2008 recession, they continued to work on partnerships with organizations like Xbox so people could stream through those devices. It was these innovations that allowed them to keep growing and increase their subscriptions.

Keeping an eye on shifting consumer behavior

If you want to make sure your ad campaigns are as impactful and efficient as possible, it’s important to stay up-to-date on how shoppers are feeling. What’s top of mind for your audience?

This is especially relevant for the current holiday season. Here are a few insights we learned from a recent holiday survey with 1,000 grocery shoppers.

Most people prefer a mix of in-store and online shopping

Only 14% of consumers will shop entirely online over the holidays. This shows that most people prefer a mix of ecommerce and brick and mortar. So, adding in-person touchpoints to your media mix (alongside online and mobile campaigns) will be a valuable strategy.

Grocery stores will see a huge bump in traffic

Yes, grocery is definitely feeling the holiday cheer. 96% of consumers visit physical stores to buy groceries, and 73% plan to take more grocery trips over the holidays. This suggests that 1) People will be gathering frequently with their loved ones and 2) Grocery will remain a top category despite concerns about inflation. It’s also worth noting that 60% said they purchase alcohol at the grocery store.

Shoppers are cost-conscious, but most aren’t necessarily shopping less

Nearly 60% said they’re going to have stricter budgets, but the majority either plan to spend the same amount (45%) or more (20%) on holiday shopping. As a brand, it’ll be crucial to determine which products/categories your audience is prioritizing. Our survey showed that people plan to spend more on groceries (40%), clothing/accessories (37%), and electronics (32%).

How are you adjusting your campaign plans?

It’s hard to predict exactly where the economy will be in the coming months, but we hope the strategies and data insights we covered here can inform your media planning.

We’ll continue to share more resources and industry updates on our blog and in our monthly GTV Gist newsletter, which you can subscribe to below!

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Should I advertise during a recession?

by Laura Hogg

Few words are scarier than the one floating around at the moment: recession . Just reading or hearing it out loud is enough to bring worries to anyone’s mind – especially if you’re a business owner. What will the future hold? Will my business be safe? Should I advertise during a recession? When it comes to your business, conventional wisdom will tell you to cut back on any and all spending in hard times, especially when it comes to advertising. After all, it will save you money in the short term, and you can make up the difference when the economy picks back up.

But what if the conventional wisdom isn’t so wise? As it turns out, research actually shows that advertising during a recession can cost you less and gain you more. Of course, every situation and every business is different, and we wouldn’t dream of offering a one-size-fits-all solution to your recession woes. But we’re hoping that we can convince you to look at marketing spending in a recession a little differently. Here’s why this topic deserves a closer look.

What we can learn from past recessions

When the economy takes a downturn, it’s completely understandable to react by cutting costs. You have to keep the lights on somehow, right? While every recession is unique, with its own causes and remedies, there have been enough recessions in US history that we can draw some conclusions.Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

Recession advertising by the numbers

McGraw-Hill Research ran a study looking at advertising spending during the 1981-1982 recession. They studied 600 companies in 16 different industries, spanning the years of 1980-1985. Here’s what they found:

Increase in sales post-recession for companies that maintained or increased advertising efforts

Increase in sales post-recession for companies that cut budgets or stopped advertising.

While the exact figures fluctuate throughout history, the pattern is clear: advertising during a recession can pay off in a big way. This has been shown to be true since the 1920’s – when companies who advertised during the Great Depression saw a rise of 20% compared to the 7% loss of companies who didn’t advertise – all the way through until today.

Choosing to cut back or eliminate advertising when the economy falters is understandable. But the numbers show that it could be a huge missed opportunity for your business. When other companies stop advertising, you get a great opportunity to gain share of voice in the market. With fewer companies advertising, inventory will be cheaper, and you’ll have less competition for attention. Your dollars can actually go further , if you spend them right and back them up with the right messaging.

To crystallize this point even further, here’s a brief but famous case study:

Post vs. Kellogg’s

There’s no recession more famous than the Great Depression. When the economy plummeted in the late 1920s, two breakfast cereal brands reacted very differently. Post quickly decided that the best thing to do was cut costs. They slashed their budgets and greatly diminished their advertising efforts. After all, they needed to save money, and that money needed to come from somewhere.

Kellogg’s decided to take a different tack. Instead of cutting costs, they doubled their advertising budget. They decided to move into new forms of media and pushed their new products relentlessly. Which of these two companies do you think did better?

Given the premise of this article, the answer is probably not surprising: Kellogg’s bold move paid off in the form of a nearly 30% rise in profits . And it seems that this move may have ripple effects to this day. We’re willing to bet that if you asked anyone to name a cereal brand, 9/10 people would name Kellogg’s before they even thought of Post.

Of course, your brand (probably) isn’t Kellogg’s, and everyone’s situation is different. But it’s a helpful illustration of how you can weather a recession and turn it into an advantage.

What we can’t learn from past recessions

Clearly, there’s plenty to be learned from past recessions. But equally as important is what we can’t learn – meaning, the things that have changed since then. The biggest recession fresh in everyone’s mind is likely the recession of 2008. Although it doesn’t seem that long ago in the grand scheme of things, in many ways, it was a different world. Consider that in 2008:

Almost all advertising was linear, meaning that one message went out to every viewer/listener.

The iPhone was one year old.

Digital advertising had only existed for around a decade.

Social media as we now know it – ever-present, and a necessity for every business – didn’t exist.

Streaming audio was only a few years old, and podcasts were nearly unheard of.

If you wanted to get your message out, you had options – but nowhere near the number of options you have today. Today, there are new forms of advertising that didn’t even exist back then. And perhaps even more importantly, an advertiser’s ability to target with precision has skyrocketed. That means that now more than ever, you can find your audience and target them with a message made for them and their specific interests. No longer is it your only option to spread a broad message to a massive group of people. Now, you can target a specific audience that you know is more likely to convert – which could mean potential cost savings.

Any business decisions during economic hardship should be taken seriously, and with the advice of trusted experts. The fact is that the advertising landscape looks completely different to how it used to in previous recessions, and past recessions show that keeping up your advertising when times are tough could pay off in spades. The question may end up not being “can I afford to advertise during a recession?” but rather, “can I afford not to advertise during a recession?”

Want a trusted advertising expert to help you navigate a recession?

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Advertising in and out of a recession

Rhea Jose and André Bonfrer consider how marketers can use evidence-backed strategies to justify the long-term value of marketing and advertising during a recession. 

We are all familiar with the marketer’s challenge of ‘selling the value of marketing’ to the C-suite and their justification of marketing communication budgets. This could be due to non-marketers not appreciating the lag in impact between advertising and sales.

Research in ‘Do stock prices undervalue investments in advertising?’ has shown the impact of advertising is often not factored into the valuation of share price by analysts. While the focus of that study was not specific to advertising and recessions, it provides quantitative general evidence that marketers can use to justify their long-term view of the value of marketing and advertising budgeting.

In terms of the looming recession, Karl Winther, of Winther Consulting, believes that management needs to focus on evidence-backed strategies to improve their brand share. “Evidence-based studies, as far back as the 1920s depression and more recently the 2008 GFC, proved that during a recession it is easier to increase your brands SOV and therefore SOM. However, Marketing Week UK reported that only 7 percent of marketers were using the opportunity to increase their marketing investment.”

So why are so few marketers using the current recession as an opportunity to increase investment? Karl poses the question: “Are marketers unable to convince their management team?”

This appears to be an opportunity for marketers to help the C-suite understand evidence-based marketing results, which will in turn enhance marketing’s credibility in the boardroom.

Caroline Ruddick, GM of Marketing at Latitude Financial Services, believes that advertising in recessionary times can help achieve a competitive advantage through brand investment. “Companies that invested in recessions were found to outperform the S&P 500 over a 5-year period. SEEK found investing during the GFC to be cost-effective, as competitors pulled out of media. SEEK built confidence in the brand and competitors were left playing catch up after going dark. Competitors had to invest significantly more to try to catch up lost ground to SEEK.”

Considering this example, why wouldn’t a CFO take a long-term view here in terms of supporting a CMO?

Having visibility across multiple categories, Mark Coad, CEO of IPG Mediabrands, considers advertising budget setting in a recession to be very category-specific in terms of industry and product. “Whilst market SOV is incredibly cheap we are also seeing the unprecedented instances of categories simply closing down – travel, entertainment, airlines, cinema/films, non-essential retail. Conversely, some categories struggled to meet demand. Pulling spend in both of these circumstances was seen as a necessity, not a decision.”

So, is it possible for decision makers to find a middle ground instead of tipping on either side of the extreme? The answer might lie within category management.

Mike Harley, managing director of XPotential, offers another perspective to advertising budget setting, based on short-term versus long-term impacts of advertising. “The challenge with justifying continued advertising support in fast-moving consumer goods during the period of a financial crisis are two-fold. Firstly, the lag effect of branded advertising means competitor brand saliency erodes slowly, so it can be 6-12 months until you feel the impact. Besides, promotional activity drives cashflow but is often rushed and doesn’t connect with the brand. Adapted brand creative to an aligned promotion will enhance both.”

A considerable body of academic work points to the vulnerability, response and efficacy of marketing in the face of crises, for example during a currency crises, oil price shocks and so on. Findings suggest that there are category differences, with some industries that are less vulnerable to economic recessions than others. While durable goods and tourism are particularly susceptible to macroeconomic cycles, other brands are counter-cyclical and demand increases.

Further, marketing performance depends on the type of response. A 2009 post GFC review of advertising studies revealed that advertising expenditures tend to move pro-cyclically, with a 1 percent drop (gain) in GDP resulting in a 1.4 percent drop (gain) in advertising expenditures. While brands may spend less on marketing budgets, in many cases the effectiveness of such expenditure is higher – in part due to lower competitive interference.

Finally, marketing and advertising activities in a recession will govern how firms fare post-recession. The most concerning outcome is that many firms do not survive; recessions tend to wipe out marginally efficient and inefficient firms. For firms that do survive, the post-recession market structure can change dramatically. Research in FMCG industries points to the shift of choices toward private labels during recessions. Likely brought about by consumers looking to save money and being less influenced because brands reduce their marketing expenditure. These shifts were found to be persistent and market share improvements in private labels are sustained long after the recession is over.

So, how many of you will use these facts in your next boardroom presentation?

Rhea Jose is a research assistant in the Department of Marketing at Deakin University and a marketing specialist at Dynamiq Global.

André Bonfrer is a Professor of Marketing at Deakin Business School.

Photo by  John Jackson  on  Unsplash .

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