Recession or no recession.
That is the question. Despite the pessimistic outlook at the end of 2022 and into the first half of this year, the US economy didn’t enter a recession. Now, that’s not to say that it still isn’t possible (or even likely), but recent pauses in interest rate hikes and a slowdown in inflation have provided some optimism that the doom and gloom that was widely predicted may not be as bad as anticipated. However, this isn’t a finance blog nor am I an economist. I rely on people way smarter in these areas to help guide my forecasting and decision making. What I do know is marketing, and specifically the importance of marketing during an economic downturn, and that is what we’re going to talk about today.
During times of economic uncertainty, marketing and advertising budgets are amongst the first casualties. Why? Clearly, to save money. Primarily it’s due to the thinking that if people are spending less, then why does a company need to continue to market to them. Wait until the purse strings loosen a little, then marketing strategies can be re-adjusted. This can be short-sighted and ultimately have the opposite effect once the economy rebounds. And it always rebounds.
Many would agree that in a world of short attention spans and a constant bombardment of messaging, it’s important for a brand to remain front and center in the eyes of the client. If a company pulls the plug on their marketing efforts, even for a short time, then a vacuum is created. This opens up an opportunity for competitors who haven’t cut back on their marketing to move in and steal customers. Additionally, those companies that don’t scale back, or even choose to double down on their efforts, see a much larger and quicker rebound, once the economy starts to return to normal. This article shares some great stories from Kellogg’s, Wal-Mart, Pizza Hut and Samsung.
Now this doesn’t necessarily mean to keep doing what you’ve always been doing. This is a time to reevaluate messaging and products. If what a company is doing isn’t working, then by all means, adjust. Companies that change and innovate during these times will grow, and capture market space from those companies that press pause or choose to follow status quo. Let’s take the automotive industry, for example. Research shows that products launched during a recession offer both higher sales revenue and survival chances, when compared to products launched during a “normal” economy.
Be cognizant of your messaging. If consumers or clients aren’t spending as much, it’s important to take that into account. Change what’s being said to reflect the emotional state of the economy and who is being targeted.
In short, when others are pulling back, consider moving forward aggressively and with alacrity.
