How to Advertise During a Recession: Tips to Drive Value and Growth
If you’ve been listening to economic experts and pundits discussing the state of the U.S. economy, you’ve probably heard someone suggest that we’re headed to something called a “slowcession.”
A slowcession isn’t exactly like the recessions you’re more familiar with, but there are some important similarities. Yes, both of these terms refer to a slowdown in the economy. But there’s a difference in the degree of that impact: while the International Monetary Fund defines a recession as “two consecutive quarters of decline in a country’s real (inflation-adjusted) gross domestic product (GDP),” a slowcession refers to a milder economic slowdown.
That may sound like good news to most consumers and businesses, but there’s a catch: a slowcession isn’t as disruptive, but its economic impact can last for longer than a traditional recession.
As a business owner, even a milder slowcession can disrupt your plans and thin the financial ice beneath your company’s feet. But before you scale back your advertising as part of a larger cost-cutting move, it’s important to consider the big picture. Advertising cuts may help your business in the short-term, but it could carry long-term consequences that hurt your profitability over time.
It’s important to remember the critical role advertising plays in generating revenue for your business. If you’re turning a positive ROI on your advertising, you’re getting more money back then what you spent.
Which means that if you cut back on advertising, you’re essentially scaling back your earnings—by choice.
The long-term impact of this decision can be devastating for businesses. An ARF analysis of ad spending during the 2008 Great Recession found that brands that cut advertising altogether took three to five years to recover from their financial losses. At the same time, businesses that doubled-down on advertising thrived: 60 percent of brands that increased their ad spending saw increased ROI, according to a report from Analytics Partners.
Thanks in part to a less competitive advertising market, brands that increased their paid advertising grew their incremental sales by 17 percent. Those businesses that cut their advertising? They risked losing an average of 15 percent of their business to their competition.
Instead of being a business that loses customers and revenue, advertising can help your local business boost its growth even during a period of economic decline.
Instead of scaling back your business advertising during a recession or slowcession, your company might be better off adapting its advertising strategy and advertising goals to better fit your current business outlook.
When planning ad campaigns during a recession, consider the following strategy shifts:
- Advertise across multiple digital and traditional channels. Multi-channel campaigns can increase your overall impact and ROI by 35 percent.
- Focus on brand messaging, rather than performance messaging. Brand messaging is instrumental in strengthening relationships with consumers, and it helps improve brand recognition for your company.
- Invest in high-quality creative for video and other ad channels. Practice quality over quantity, and make sure the ads you do run are going to offer high impact with your target audience.
- Use reduced ad competition to introduce new products, services, or brand identities. With a less crowded ad marketplace, you’ll have more space to get your messaging out, and your audience will be more likely to notice and remember it.
- Reduced ad competition can lead to lower keyword bidding prices for search engine optimization and pay-per-click advertising. This means you could end up paying less for the exact same campaigns you’ve been running in the past.
A digital advertising partner can review your business, your existing ad strategy, and your advertising goals to identify additional opportunities to strengthen your ad performance during a recession.
As advertisers and businesses atrophy during a recession, more customers are up for grabs. Some will be disappointed with the declining customer experience they’ve received from a particular business, while others will be set adrift by businesses that have closed or changed their offerings.
For businesses that stay aggressive with advertising, recessions can be a launching pad for faster growth. Here are three key strategies that can help you retain your existing customers and expand your base of loyal clientele:
- Figure out how your business can help customers during this period of economic struggle. What kinds of services and products can your business provide that will give your customers greater comfort, security, and/or joy?
- Build and promote a customer loyalty program. Punch cards and loyalty rewards can drive more business while creating more value for your customers.
- Re-examine your offerings to figure out how you can give customers more bang for their buck. Price-matching, bulk discounting, expanded service offerings, more flexible service tiers, and special “freebie” incentives may be necessary strategies to further increase the value of your business to your customer base.
Whether we end up facing a recession or a slowcession, your advertising strategy can help your business emerge from this economic uncertainty even stronger. Don’t wait until disaster strikes to change your advertising course—contact Cox Media today to see how we can help.
Connect with a Marketing Expert
Stay On Top of the Newest Business and Marketing Insights
Sign up for our monthly newsletter to get the latest industry information, business trends and marketing updates.
Connect With Your Local Marketing Expert
You know your business. We know advertising. Together, we can bring your business to more people. Contact a member of our team today. We’d love to help you grow.