The Importance of a Strong Brand Presence – Even in a Challenging Economic Environment
When economic uncertainty strikes, your brand isn’t merely an asset to your business. It’s also an opportunity to invest in brand-building and emerge on the other side stronger than ever.
As 2022 draws to a close, virtually every business leader is at least tracking the threat of a possible economic recession looming on the horizon. Coming so soon after the challenges of the pandemic, and on the heels of crushing inflation affecting virtually every industry, the prospect of a new wave of economic upheaval is pressing businesses of all sizes to take precautionary measures.
Cost-cutting is one of the first steps businesses take when future revenue is in jeopardy. While overhead reduction can come in many different forms, advertising and marketing is often a top target of these budget cuts.
Business leaders are drawn to advertising budget cuts for several different reasons. While these smaller budgets don’t disrupt supply chains, they also don’t shrink the company’s workforce. They also offer an immediate short-term benefit, without any immediate impact on the business.
The problem is that this short-sighted decision-making can lead to big problems in the future, stunting your company’s revenue growth and extending the damaging effects of a recession far beyond the period of recession itself. In reality, the best financial decision your business can make is to lean into advertising as a source of revenue generation that can carry your business through economic turbulence—and set your brand up for an even brighter future.
When businesses scale back their advertising as a cost-cutting move, it creates an unintended benefit for their competition. A reduced number of advertisers results in fewer brands bidding for the same ad spaces, which can lead to lower prices for search, display and other digital ad inventories.
By sticking it out with your advertising strategy, your business may reap the benefits of better pricing and greater access to the inventories and ad placements that offer value for your business. This can be particularly beneficial for smaller businesses eager to grow their brand’s presence among a local audience: as your competition scales back their advertising, you’ll be better-positioned to grow your market share even while maintaining your current advertising levels.
Digital advertising is an up-front expense that delivers long-term value for months and years to come—especially when that advertising is aimed at building brand awareness and brand loyalty among your target audience.
According to a report from VAB, an analysis of brand equity development over the past 100 years shows that brands grow faster over time when they invest in building their brands during periods of economic uncertainty. In fact, research has demonstrated that brand-building ad campaigns are able to drive faster sales growth than comparable investments into sales activation efforts.
This improved long-term success is credited to the value of building brand relationships with customers. Small businesses are particularly well-positioned to connect with customers and cultivate strong relationships thanks to the “empathy” many consumers feel toward local businesses in a recession: A recent VAB survey found that 81 percent of consumers empathize with small businesses that need to raise their prices due to evolving economic conditions.
This underscores the enduring importance of building and reinforcing these relationships.
Your business isn’t alone in facing new economic challenges. Your target customer base is also feeling the sting, and may be adapting in their own ways: either by scaling back their spending, or by seeking out discounts.
The best way to address these challenges is by speaking directly to what your customers are facing. Your ad messaging should be tailored to the current economic moment. Consider how your business can better serve your customers in light of these challenges, and then make this value a point of emphasis in your messaging.
While it isn’t feasible for every business to simply offer discounts, explore the other ways your business can offer value, and make these core elements of your ad campaigns.
If your business feels the need to change its advertising strategy in response to ongoing economic challenges, the right answer might be to advertise smarter, rather than advertise less.
This can be achieved by using ad targeting tools and personalized messaging to improve overall ad performance. A digital advertising partner can help you better define your target audience to understand the persona(s) your business is attempting to reach through your ad campaigns. Audience-based ad buys can then harness the targeting capabilities of digital ad platforms to focus your ad buys on inventory that gives you the best bang-for-your-buck.
Ad messaging can also be tailored to these distinct buyer groups to help your brand speak directly to the needs and interests of these consumers. While this approach cuts out inefficient spending by reducing wasted volume, it also elevates the quality of each ad exposure, which can in turn deliver a higher return on investment.
As other brands scale back their ad investments, your business can seize on this vacated space to engage a wider audience at a better price. With a strong, consistent customer experience backing up the promises of your digital ad strategy, any business can use periods of economic uncertainty to attract new customers, reinforce brand loyalties, and build a stronger business even as other brands stagnate.
At Cox Media, we have the expertise and the advertising capabilities to make this strategic vision a reality. If you’re worried about how the economy might jeopardize your brand-building efforts, we can help you adapt your strategy to these new economic challenges. Contact us today to get started.
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