Marketing Spend During a Recession: The Shocking Truth Backed By 1,000+ Real Company Results

Here are 6 digital marketing strategies to drive more revenue during a recession. However, for intelligent marketers, it’s an opportunity to differentiate yourself from the competition. It’s a time for innovative marketing strategies and a time for smart and strategic moves. That’s what a brand is – a company’s beliefs, visions, imagery, and the way it makes people feel. Consumers gradually grow disengaged and distant from brands that don’t reach out and tend to replace them with more communicative counterparts.

Most businesses will cut their marketing budget when faced with an economic downturn, which is exactly why not cutting the marketing budget is a smart marketing strategy. People might well start to feel isolated, separated and cut-off from their families and friends. It is a measure of how well an ad will connect with people, and its ability to attract and sustain attention, to get noticed and remembered. This style of advertising doesn’t attract or sustain attention, doesn’t elicit an emotional response, and doesn’t get remembered – even in periods where we don’t face the threat of a global pandemic. We might start to answer how brands should advertise in this crisis by examining how people are feeling in countries across the world.

When an F&I manager gets a customer refusal, it’s a wise move to tweak more than one thing in the product offering. Despite 84% of people spending less on food, the subset of restaurant & bar advertisers offering affordability and convenience continues to invest in ads. Studies have shown that creative messaging gets more attention, leads to positive brand attitudes, and can affect sales. 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.

Proven Recession Marketing Strategies That Work

• This may involve offering promotions or incentives to encourage customer loyalty or focusing on personalized marketing messages that speak directly to their needs and pain points.
• This report conducts an in-depth review of academic studies and company case studies on marketing budget decisions in times of economic uncertainty, focusing on the retail and hospitality sectors from 2000 to the present.
• However, if you don’t want to focus on price savings, you can promote value-added options within your business offerings.
• This may involve reevaluating marketing budgets, revising marketing strategies, and experimenting with various approaches to reaching customers.

These businesses can attract new customers and retain existing ones by offering a mix of popular favorites and innovative options. Unfortunately, not all marketing strategies are resilient, so marketers and small business owners must be flexible during an economic downturn. With digital marketing, you can increase your reach with just a few dollars a day using social media advertising and search ads. Branding is critical for any business as it creates a unique identity, leaving a lasting impression on consumers, and communicates what sets your company apart from the competition. During a recession, there's much less competition because your competitors think as you do — they want to reduce costs anywhere they can, which often leads to smaller marketing budgets.

Data makes the difference when advertising during a recession

As Prof. Gerard Tellis put it best, “In a recession, companies tend to cut back on advertising and marketing budgets as a cost-saving measure. In their article from 2014, The Role of Advertising during Recession, Prof. Dr. Ayşen Akyüz and Dr. Mustafa Ercilasun mentioned that “In a recession, the first things that a company usually cuts come from the advertising budget. In our latest Global Issues Barometer study, three-quarters (73%) of the global population exasperatedly admitted that they don’t expect their incomes to keep pace with inflation. And although the joke is still on marketers, it feels we’ve learned a thing or two from past economic downturns. Brands must focus on long-term growth over short-term profitability during economic downturns to create a long-lasting relationship with consumers, thus positioning themselves for success and growth during the economic recovery period.

It's common for businesses to reduce their marketing budgets during a recession, but that doesn't mean you should stop all marketing efforts. As a result, it’s likely that brand managers are being asked by company leadership to axe ad spending to save money. People change as their environment changes, and each economic downturn is caused by different factors, so no recession is the same.

You should pay special attention to how consumer spending habits change in your industry and how that adjustment will impact your business. McGraw-Hill Research conducted a study on 600 companies across 16 industries and to find out how marketing efforts impacted company growth in and after the early 1980s recession. Peer-reviewed research shows that preserving marketing budgets in a downturn can yield gains in market share, brand awareness, and even short-term sales, positioning firms for stronger recovery once the economy improves. Capitalize on the decreased competition in digital ad platforms as the industry is pulling back, by investing into your industry more or maintaining your presence when media costs are cheaper to reach the same volume of people. As such, one of the fastest ways to lower the perceived barrier to purchase is by offering flexible payment options. Marketers that are quick to re-brand themselves could potentially attract new customers in the short-term, but will lose their loyal customer base in the long-term, that may feel both confused and cheated from such a sudden change.

Messaging cannot and should not remain stagnant in an ever-changing economic climate–as consumers’ buying behaviors change, so should the way companies market to them. For example, companies that increased their marketing budgets during past recessions saw notable sales growth, with one study reporting a 20% sales increase compared to pre-recession levels. Contrary to intuition, cutting marketing budgets during a recession isn’t advertising during a recession always the smartest move. Firms that increased their marketing budgets and added staff were twice as likely to pick up market share. A survey of American Management Association (AMA) member firms found that companies that increased their marketing budgets during the 1990 to 1991 recession gained market share and retained the growth as conditions improved in 1992.

This report conducts an in-depth review of academic studies and company case studies on marketing budget decisions in times of economic uncertainty, focusing on the retail and hospitality sectors from 2000 to the present. This may involve reevaluating marketing budgets, revising marketing strategies, and experimenting with various approaches to reaching customers. This may involve offering promotions or incentives to encourage customer loyalty or focusing on personalized marketing messages that speak directly to their needs and pain points. Digital platforms like social media, email, SEO, and content marketing offer cost-effective options to engage your audience. Those with enough resources to increase their marketing spending and/or the flexibility to invest their marketing budgets more smartly may get a leg up on their competition. However, if you don’t want to focus on price savings, you can promote value-added options within your business offerings.