Recession-Proof Marketing Efforts: How a Better ROI Strategy Can Help Smart Businesses Grow
Even as U.S. consumer confidence enjoys a modest bump after its summer slump, long-term concerns about an impending economic recession continue to persist. Many businesses are eager to insulate themselves against economic uncertainty through precautionary steps to reduce the potential risk and fallout of declining sales and revenues.
These precautionary steps can take many different forms, but one of the most common strategies for businesses of any size is to cut expenses and reduce the company’s operating overhead. Inevitably, advertising and marketing budgets get singled out as a prime option for reducing spending that doesn’t impact day-to-day business operations.
As we’ve covered in the past, this all-too-common strategy is short-sighted and reactionary. But it’s also unnecessary: rather than cutting back on marketing and ad spending, businesses are better served by prioritizing ROI strategies aimed at optimizing performance to deliver greater value and results when spending budgets and other resources are in short supply.
Avoid The Long-Term Cost of Advertising Budget Cuts
In 2022, many businesses worried about a possible recession are making the same mistakes companies made at the start of the pandemic in 2020. Rattled by the uncertainty of the economy and their business operations, businesses were quick to scale back or even halt marketing and advertising spending, minimizing their expenses as an act of self-preservation.
Unfortunately, those short-term actions brought long-term consequences for those businesses. When advertising and marketing budgets are cut, businesses also lose a critical source of new customers and steady revenue. The growth stagnation caused by these budget cuts can affect your company’s growth and performance for years to come, which is why many experts recommend maintaining—or even increasing—your spending during a recession.
As your competition scales back its own ad campaigns, aggressive advertising brands will find that additional market share is available for willing spenders. Reduced competition for ad inventories may even lower the cost of your ad purchases, rewarding your business with greater profits and ROI even by maintaining its existing strategy.
During the 2008 recession, many businesses that doubled-down on advertising ended up using that economic slowdown to spur some of the most rapid growth in those companies’ histories. A similar opportunity may be awaiting your business—especially if you leverage ROI strategy development to optimize your spending.
Embrace Channel-Specific Targeting to Realize New Cost Efficiencies
Digital marketing and advertising has changed dramatically since the last economic recession. Smartphones didn’t exist, Netflix was still mailing DVDs, and TikTok was nothing more than the sound a clock makes.
But as you weigh the value of campaign spending in the race of economic uncertainty, one of the most important changes is the widespread audience targeting capabilities available across virtually every digital marketing and advertising channel. From social media to digital video to mobile display ads, audience targeting can now utilize hundreds of different data points and filters to segment audiences by demographic information, online behavior, social media profiles, and even your physical location—both at home and on the move.
This targeting gives your business the power to target ads with unprecedented precision. Advertising platforms can combine these targeting tools with unique first-party user data to define and engage a highly relevant audience, ensuring your precious ad dollars are only spent on the most valuable prospects.
If you aren’t already doing this in your existing campaigns, enhanced targeting is an easy way to create new efficiencies and achieve more with less.
Rebalance Your Media Mix for Cost-Optimized Spending
A multi-channel marketing and advertising strategy is the best way to engage consumers across diverse channels and platforms—and to realize the benefits of a holistic ad presence. But your company’s campaign performance likely varies from one media channel to the next, with certain channels delivering far stronger ROI than others.
When it’s time to re-examine your spending and emphasize ROI, any business can achieve new efficiencies by rebalancing this media mix to shift more resources over to top-performing channels, while scaling back spending on channels that offer a lower ROI. You can continue to test and optimize all of your channels to improve results, but this short-term change can provide much-needed financial relief through improved value creation.
Invest In Upper-Funnel Strategies to Deliver Long-Term Value
Full-funnel advertising and marketing is essential to any sustainable marketing strategy. Changes in the economic landscape, though, may persuade your business to adjust its funnel approach based on the business goals you’re trying to achieve.
Top-of-funnel campaigns, for example, create brand awareness and visibility that deliver strong ROI over time, investing in your company’s long-term success. When you’re wanting to play the long game and weather the storm of an economic recession, this approach can help you emerge on the other side even stronger.
But an emphasis on top-of-funnel campaigns will also cost you some short-term ROI, which could be a problem if your company is facing cash-flow concerns. In this case, bottom-funnel campaigns could deliver an infusion of conversions and revenue that buoy your business and protect it from greater financial trouble.
Remember: Marketing and Advertising are Revenue-Generating Activities
As you battle other business leaders to protect ad budgets—and evaluate business expenses to identify the best cost-cutting options—it’s important to frame your marketing and advertising budgets as a revenue-generating investment, rather than a sunk cost.
When planned and executed the right way, these campaigns can generate revenue returns that far exceed your campaign spending, infusing your business with cash at a critical moment. A digital advertising partner can help you balance budget considerations with the need to deliver strong ROI when facing a slim financial margin for error.
Find out how Cox Media can help—contact us today to learn more.
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