The global economy is forecasted to slow down in 2023 after consistent growth for over a decade. According to the global mid-year advertising forecast by GroupM, advertising could grow by 8.4%, excluding U.S. political advertising. Although, the media budgets of marketers have been increasing in 2022, in reality the growth rate is slower than previous year, especially for older marketers.
Any short-term economic downturn impacts everyone including perceived growing businesses. Firms operating in an interconnected VUCA (volatile, uncertain, complex and ambiguous) world are at risk in all business cycles. Hence, in an economic crisis, the instant acknowledgment is the need to prepare for the demands of strategic recession planning.
To start, practitioners and agency owners may need an emergency fund. A good rule of thumb is to have a six-month cash flow runway for the business you are in removing non-contributing budget items as market conditions tighten. Rising interest rates to cool the economy limit lending access to free-lance marketers and entrepreneurial agencies.
Scanning the financial and competitive environment may yield Intel to assess leading KPIs, the value of your key players and internal competencies. This assessment could make you recession-ready and calm panic tendencies. Thought a recession brings pain, it also brings opportunity to grow. There is light at the end of the tunnel to the other side of a recession.
Conducting a B2B marketing audit of your firm’s positioning and sharing it with relevant peers and your team helps to recognize that small businesses are often the ones hit hardest during recessions. A marketing audit typically takes the form of a 10-20 page report with an executive summary, specific findings, and recommendations become your marketing strategy for the next 12 months.
Topics in a marketing audit could include customer retention, lead generation, sales acceleration, and leadership in the form of honest critical thinking. As an alternative, leadership could run F2F interviews for a haptic sensation with key channel partners, end-users, field personnel, and even competitors. Despite technologies, many businesses continue to opt for face-to-face, or in-person meetings for various reasons: increasing effective communication and helping build strong relationships with deeper engagement.
When you want to lead, organize or contribute to better exchange of ideas, strong relational bonds, and building collective trust; learning how to conduct a productive face-to-face meeting can help you achieve your goals. This is a good leadership policy that keeps teams motivated and prepared for difficult times.
In practice, experts recommend that advertising services develop a careful attitude when spending money in preparation for a recession. A recommended strategy focuses on SEO, PPC, and email marketing. Whatever is essential will be determined by the specific needs of your ad services. For instance, social media interactions is a great metric to keep an eye on when using social media platforms. Besides ensuring Google is working for you and not against you with its e-interventions. For the latter, rethink your website’s SEO strategy beyond web traffic to include creative ways aiming for new customers and revenue growth.
Take advantage of PPC advertising, the recession can be an excellent opportunity to stand out and increase your brand visibility. With fewer companies advertising on platforms such as Google Ads and Facebook Ads, also take advantage of the cheaper rates and better advertising space to promote your brand. Remember reduced competition means more eyes on your brand, so use clever marketing tactics to capture the attention of customers while you still can.
Increase branded content. Content goes along SEO and other marketing efforts, hence make content marketing an integral part of your digital strategy during the recession. Moreover, branded content sets you apart from the crowd and provides an opportunity to establish your brand as an authority in the industry. Use different forms of content, including blogs, articles, videos, social media posts, etc., to communicate your value proposition and remain relatable to target audiences.
Try not to focus on just cutting expenses, an effective approach is balancing sustainable defense and offensive strategies. Consider that your customers are probably feeling the pain from a recessionary environment. Hence, offer personalized discounts, pay-per-performance pricing, and package deals through smart pricing. These initiatives could benefit your business too. They help to retain current clients and attract new ones during and after a downturn.
Adjacent services could be explored for new opportunities. For instance, consider acquisition marketing if your usual focus is on retention marketing. Also, any down time allow for learning new technologies like AI, the Metaverse, and blockchain; they appear to remain on the business agenda for the foreseeable future.
A global recession is happening everywhere and communications count on e-mail to be there!
Companies could go back to their pandemic tactics, in which they invested in e-mail to keep customers informed and build authentic relationships. Empathy is a perceived emotion, adopting an emotional tone, rather than an aggressive one in your communication campaigns would show your clients a human-driven and adaptable agency. Use this energy to connect with your audience telling you are on the same ship.
Do not question whether email can live up to its recession-proof reputation. Reduced consumer spending puts even greater pressure on email marketers to perform via segmentation and personalization to apply the old STP model. Retailers will pull the usual levers to capture more spending by positioning with heavier discounting requiring higher email frequency with other promotional tactics to attract their target audiences.
Audience segmentation comes into play with customer data platforms (CDPs) and advanced analytical tools. Email marketers use these tools to fight both recession-driven budget cutbacks and reduced consumer spending. CDPs is the gateway to customer intent, purchase propensity and data orchestration. Marketers use these means to transform email campaigns into messages that elevate the customer conversation.
According to marketing expert Stephen King, “Businesses that cut their advertising expenditures in a recessionary period lose no less in terms of profitability than those who actually increase spending by an average of 10 percent”. In Peter Steidl’s book, “Survive, Exploit, Disrupt: Action Guidelines for Marketing in a Recession”, Steidl notes that companies who increased spending during a recession actually saw a 4.3% increase in profits compared to those that cut spending (0.8% increase). If these affirmations do not motivate enough, let us recognize that marketing is not a luxury, it’s a necessity!
Marketing during a recession can be challenging, but don’t stop doing it. Optimize your budget, be smart about your priorities, and, if possible, get professional help.