With a recent surge in Covid-19 cases across Europe, many financial forecasters are warning of the possibility of a double-dip recession. That’s a nice optimistic way to open a blog post, isn’t it?
Amidst national financial turmoil, driven by ongoing efforts to combat the spread of coronavirus, many businesses are looking to reevaluate their expenditure to ensure stability through these testing times. Today, we’re looking at why your marketing budget shouldn’t be included in these cuts.
Yes, yes, we know what you’re thinking – a marketing agency would say that, wouldn’t they? Sure, that’s true – but we’ve got the facts and figures to back it up.
So, join us in exploring why you really do need to spend money to make money, looking back at how brands navigated previous economic downturn to prove there’s power in marketing during recessions.
Lessons from 2008
Following the 2008 Great Recession, advertising spends in the US (the hardest hit of all Western countries) dropped by a mammoth 27%. The result? An independent review into marketing practices throughout 2008 from the IPA (no, not the craft beer – the equally fun Institute of Practitioners in Advertising) had this to say:
“Following a budget cut, a brand will continue to benefit from the marketing investment made over the previous few years. This will mitigate any short-term business effects, and will result in a dangerously misleading increase in short-term profitability. The longer-term business harm will be more considerable, but will not be noticed at first.”
So, what can we learn? That short-term reactive decisions, like cutting your marketing budget, can have greater and more long-term impacts than you may originally have realised.
Why market during a recession?
Of course, the counterargument here is that running out of money in the short-term has a greater impact on your business than decreased brand exposure in the long-term….obviously.
But, again, returning to the age-old mantra ‘you’ve gotta spend money to make money’, marketing during periods of economic downturn boasts far greater benefits than your basic damage limitation:
- A reduction in ‘noise’ – as competitors cut back marketing expenditure, activity will naturally be reduced. This creates a prime opportunity for brands to increase their share of the market by picking up where others have dropped off, gaining a greater share of voice within their sector by continuing to shout despite the reduction of ‘noise’
- Consumer reassurance – in times of financial instability, consumers want a sense of normality. What better way to establish this than with a ‘business as usual’ mentality? Continuing marketing to consumers projects commercial stability that further builds trust around your brand, to the inevitable benefit of your sales performance
- Value for money – the more brands cut back on advertising, the cheaper it becomes. The outcome? A more cost-effective means of marketing that will likely drive down your cost of acquisition and boost your return on investment (if you’re not familiar with the jargon, we’ve got you covered here).
Adapting to the new norm
It’s not just the economic landscape that’s changed this year, though – society as a whole has had to adapt to a ‘new normal’ (we can’t be the only ones getting sick of that term?).
This means that charging full steam ahead with the same pre-Covid marketing strategy is unlikely to reap the rewards you want to see. After all, your audience now has new problems, preferences and expectations.
A successful recession marketing strategy, then, is one that’s been adapted to best suit the times. How does this translate in the era of Covid-19? Emotive, community-based marketing.
This doesn’t mean scrapping SEO-focused activity. On the contrary, a reduction in competitor activity surrounding practices like onsite optimisation provides a unique opportunity to find ‘quick wins’ when it comes to boosting keyword rankings and, in turn, organic traffic. But the key here is to inject a greater emotive focus into your strategic marketing plan.
Generally, people don’t want to be sold to during finicially testing times. Instead, they want to know what a brand can do for them. For this reason, it pays dividends to shift your focus towards providing maximum value to your customers – and what better way to do this than through content marketing?
Take the time to conduct research into your audience. You’ve no doubt done this before, but, as we’ve already touched upon above, this is a new audience facing new problems – what does this mean for your brand?
From user-generated social media content to data-driven blog posts, align your content with the wants and needs of your audience to actively encourage conversations, nurturing a community that keeps your brand firmly at the heart of the conversation and in the minds of consumers.
Despite a tough year for many industries financially speaking, the ecommerce market continues to thrive amidst safety concerns and lockdown guidelines on the high street. To learn more about how we can help your business thrive with an expert digital marketing strategy, get in touch with Land Digital today.