Advertising During Economic Uncertainty
It can be a confusing time to be a business owner. According to a November 2022 study by NerdWallet, more than half of small business owners are facing challenges in finding or retaining customers. Well over one-third say rising prices on their inventory and supplies is among the most significant challenges their business faces.
With the threat of a potential recession looming, advertisers may feel pressure to pull back their marketing and advertising budgets. Still, it’s important to remember advertising and marketing are key components of a successful business strategy.
We asked some of Optimum Media’s sales leaders to weigh in on why retaining an advertising budget and keeping your marketing commitments is crucial during economic uncertainty.
What Is a Recession?
Before we get into ways your business can still achieve advertising growth during a recession, let’s define what a recession actually is. According to Forbes, a recession is a significant decline in economic activity that usually lasts for months. During a recession the economy struggles, people lose work, companies make fewer sales and the country’s overall economic output declines.
Many things can cause a recession. Sudden economic shock, excessive debt, inflation and deflation are just a few factors that can cause one. Adopting the right policies and creating a solid marketing plan can not only help curb negative effects on your business but also help it continue to grow.
Don’t Pull Back on Commitments
“Many times, the first thing that is affected in this environment are ad budgets, but history has proven that this isn’t the best approach,” says Bill Chambers, Optimum Media’s Head of Business Development. “There are a hundred years of analysis conducted during recessions in the past that prove marketers need to maintain their share of voice, grow market share and avoid a prolonged and expensive recovery period afterward. It’s important to understand that the full impact of advertising is not seen immediately, which helps explain how brands that spend during a recession continue to see significant share gains in the years after it.”
Advertising and marketing are not simply about getting people to buy a product or service; they’re about establishing and positioning your brand. Instead of halting any advertising commitments, be fluid in your approach. Your business’ goals are still relevant and can still be obtainable. Instead of slashing your budget, try a different platform or allocate dollars differently across various channels. If budget cuts are likely, get creative.
No two buyer journeys are the same, and your target audience is likely on multiple devices each day. Mobile and/or digital advertising allows for highly targeted campaigns within various budgets. Carefully analyze any data from previous campaigns and use this knowledge to guide your current and future marketing efforts.
Chambers also notes that “marketers need to stay principled in their approach.” Consistent, strong and targeted marketing enables your brand to stand out, while those who reduce spending suffer a loss of market share.
Choose the Right Messaging
Many recession-proof verticals remain strong during a downturn. These include education, health, finance, home and auto repair, and technology, to name a few. However, even if your business isn’t feeling the economy’s effects, your buyers likely are. More than half of U.S. households are experiencing economic stress due to inflation, according to the findings of a Gallup poll conducted last August.
Messaging and offerings can make all the difference when advertising in a down economy. Focus on retention and relationships with your clients. Look at your marketing and messaging through the lens of your consumers and ask, “Is this really what we want to communicate at the moment?” Let your customers know they are valued. Relationship-building encourages loyalty that can remain even if inventory is low, or prices have to rise.
It’s also important to note the type of media delivering your message. “Brand-building media, such as premium video, fosters a deep emotional connection with consumers,” says Chambers. “It’s important to stay top of mind when consumers go from that relational phase of not necessarily in the market for something to the transactional phase.”
Evaluate Media Partners
Your business and the problems you face are unique. Partnering with a company that focuses on strategically planning your campaign and driving return on investment is key.
“During any challenging time, evaluate your media partners,” says Optimum Media’s Senior Director of Sales, Richard Davis. “Ask yourself if they are deeply involved in helping you solve your problems. Do they understand your challenges, and are they bringing you solutions? It’s important not just for your partners to understand their media tactics but your business. They should have a deep understanding of what parts of your business are being impacted by the downturn and where your opportunities are. You should hear them bring solutions that target the opportunities to grow your market share or at least hang on to your market share.
“If you are not getting that from your media partners, it may be time to reconsider where you are investing your ad dollars,” Davis adds.
In short, no matter what media changes or budget reallocations your business may face, remember that a recession does not last forever. Staying focused, readjusting instead of abandoning your goals, and investing in the right partnership can help your business succeed during and after economic uncertainty.