Whether it’s inflation of prices, deflation of assets, or stagflation in employment numbers, economists, businesses, and consumers alike are awakening to the fact that flags aplenty are waving markets across the globe into a recession-type event, with a few voices stating that we are currently in one.
Since it’s only been a few years since the last recession, which was only a few years removed from the last one, you would think marketers would have a keen eye on how to potentially navigate the coming storm.
Armed with strategies that were forged in the fires of bear markets and hyper-growth mentalities, many brands, agencies, and businesses are inflexibly lurching toward the latest economic downturn with no actual plan on how to stay upright and thrive.
However, with a few tweaks to your game plan, marketers can weather the coming squalls with strategic savvy by focusing on the basics and leveraging what you have, to get to where you need to go.
Pivot – But Don’t Abandon – Your Media Plan
Media planning and advertising budgets are often the first to be cut during a recession. This makes sense in a way, but according to research from the International Conference on Eurasian Economies, companies that cut advertising budgets during an economic downturn become less visible to the public. Evidence shows that the brands that continued to advertise during a recession expanded their market share and maintained their image of solidity.
Further research on advertising in a downturn from marketing expert Peter Field, has shown that neglecting marketing efforts during a recession can weaken a brand, making it less profitable in the long run.
In his excellent webinar, “Advertising In A Downturn Revisited,” Field took a look at both the ‘08 recession, and the recent COVID recession, and discovered that marketers that maintained their share of voice via steady ad spend, out-performed their competitors by almost five times.
Reducing ad spend can have long term impacts on a brand.
- Going ‘dark’ carries high risk of share loss and greater price sensitivity
- Brands that slash ad presence can expect a 5-year recovery period and major loss of profit in recovery
- Short-term promotional strategies lead to dependency on short-term gains
- Maintained or increased marketing spend brings short-term hit to profitability during recession but much stronger growth to profitability in recovery
Field’s advice to marketers facing uncertain economic conditions can be summarized simply: don’t panic, don’t go short, defend your share of voice (unless short-term survival is at stake), take advantage of cheaper share of voice to drive growth in recovery, focus on emotional/brand campaigns, and dig into innovation.
Effective media planning, regardless of the macro-economic climate, requires a little soul searching on behalf of the marketing teams. When building your media plan, always ask yourself the following questions:
- Do you know what you want? Are you looking to influence perception, generate awareness, or are you looking for down-funnel activity and lead generation? Understanding the marketing KPIs you’ll measure success by is critical to engineering an ad campaign that delivers those results.
- Do you know who your customers are? Digital media has given marketing teams many ways to deliver ads to audiences, but true ad effectiveness only happens with a clear understanding of who your audience is, where they spend their time and money, what their price sensitivity is in regards to your product, and what messages resonate with them most.
- Do you know what creative works better? Whether it’s banners, videos, infographics, content marketing– does your team know what creative package your message needs to be delivered in, and which campaign types deliver the best returns?
The quality of the outcome of your media plan is connected directly to your ability to measure success properly, understand your audience, and know which messaging resonates best with your audience. With continuous optimization, testing, and strategy, you’ll be able to pivot your media planning to produce the best results possible during a recession.
Cue Up Your Creativity
When it comes to creativity, advertising legend Bill Bernbach said it best: “It may well be that creativity is the last unfair advantage we’re legally allowed to take over our competitors.”
In the competition toward market domination, brands occupying the same space can match or reduce prices, they can ape your strategy, copy your media plans, but they won’t be able to duplicate your approach to creativity.
Creative advertising is a good idea in general, but in a recession, the argument for creativity is even more important.
Ogilvy’s chief creative officer Stephan Vogel, makes the case for creativity even more airtight with this quote; “Nothing is more efficient than creative advertising. Creative advertising is more memorable, longer lasting, works with less media spending, and builds a fan community faster.”
Kantar recently released a report on the top ten drivers of advertising profitability, and second to brand size, creative quality was listed as one of the main factors influencing the efficacy of an advertisement.
Most brands can’t influence their size, but every marketer can lean into creativity. Studies have shown that creative messaging gets more attention, leads to positive brand attitudes, and can affect sales. So what does creativity in advertising look like?
According to an excellent article on creative advertising from Harvard Business Review, creativity advertising works in a variety of ways. In a consumer survey, market researchers evaluated “creative” ads in a few ways:
- Originality - Ad campaigns that are rare or surprising, that move away from the obvious or commonplace.
- Flexibility - A creative campaign that links the product or service to a range of different ideas or uses.
- Elaboration - Ads that contain unexpected details or extend simple ideas into more complex and intricate ones.
- Synthesis - This dimensional aspect of creativity blands and connects unrelated objects or ideas.
- Artistic value - Ads that contain a high level of aesthetically appealing elements (verbal, visual, or sound)
These dimensions of creativity were applied to 437 ad campaigns of products of varying types, and then linked the assessments to sales figures.
They found that ads containing “Originality” ideas tended to underperfom as compared to ads that scored high on “Elaboration.” Just being creative and unique isn’t a magic pill. For creativity to impact the bottom line, the concept has to connect with both the product and with the audience.
Some examples of “Elaboration” are expressed in this quote from the research:
“Many ads contain unexpected details or extend simple ideas so that they become more intricate and complicated. One good example is an ad for Ehrmann fruit yogurt—one of the leading brands in Germany—in which a woman eating yogurt licks her lips to reveal that her tongue looks just like a strawberry (Ehrmann made different versions of the spot for different flavors), considerably deepening the idea of fruitiness in yogurt. In another example, an ad for Wrigley’s 5 gum, a man is submerged in tiny metal balls that bounce off his skin to represent the tingle one feels while chewing the gum.”
So, how can you be creative in your approach to your ads to elaborate and expand the experiences related to your product or service in ways that intrigue and entice your audience? Could there be hidden insights worthy of elaboration hidden in communications from your customer facing staff, such as sales reps or account managers? Maybe an off-handed comment on social media contains a creative key that can unlock your next campaign?
Point is, a conservative, non-creative approach to advertising isn’t the safe bet you think. A dollar spent on a highly creative ad campaign can have nearly double the sales impact of a dollar spent on a non-creative campaign. Without creativity, you could be leaving money on the table. And during a recession, this can be a misstep that you can’t afford.
Transform Your Technology
Finally, during a recession, your marketing team should be looking to do more with less, and there’s no better place to apply this thinking than with the tools and technology you currently have to improve productivity and efficiency.
Marketing data management
Modern businesses are awash in marketing data and analytics. Multiple technologies exist to tackle this tenacious task, but it’s often approached with an efficiency mindset, rather than a mindset focused on effectiveness. You might think you need machine learning and data engineers to properly handle the reams of data coming at your teams, but there are marketing data management platforms that can leverage your team’s current abilities without adding to your line items.
Another area to improve upon in times of economic downturn are the analytics tools and tech you use to collect, collate, and combine data into marketing dashboards and report presentations.
Despite the many machine learning and marketing automation platforms on offer, many marketing teams are still hand wrangling and cleaning their data through a FrankenStack patchwork of platforms, using third-party data from social media, Microsoft Excel, Powerpoint, Google Analytics, Data Studio, and many other tools to generate performance reports on a monthly basis.
If an agency multiplied the amount of man hours they took to create one marketing report by hand, and multiplied that figure by their list of accounts, the math would quickly show them that producing performance reports is a significant area of concern, particularly to the CFO.
When marketing data has to escape out of a patchwork collection of tech solutions, the pathways are circuitous, the quality suspect, and the process can be impossible to automate or scale.
Ways to improve data analytics and reporting for your team include:
- Improve data literacy. Work together to decide which performance metrics matter and fold them into the reporting batter.
- It’s a data warehouse, not where-house. Learn how to properly set up your marketing data warehouse to better ingest, analyze, store, and ship your performance metrics.
- Tell a better data story. Stakeholders and clients don’t want to drown in analytics, they want to float on insights. When it comes to improving your data storytelling efforts, focus on the meaningful, not the monotonous.
With the way the economy keeps fluctuating, the only constant is that the changes will continue or speed up, and the upswings between them may shrink, which means knowing how to pivot your planning, dial up the creative, and leverage technology are all going to be mandatory aspects of your marketing toolkit going forward.