Marketing in a recession
How investing during a recession can deliver better business performance
I appeared on a Marketing Society Scotland podcast on Marketing in a Recession a few weeks ago. As I brushed up with a bit of background reading, one thing really surprised me.
Whilst marketers can normally be relied upon to have a positive outlook, they can be overly pessimistic in a recession. Research suggests that marketing budgets contract more than either GDP (Gross Domestic Product – the main measure of economic growth) or people’s disposable income when we’re in a recession.
But are there grounds for a little bit more optimism? Well the extensive evidence suggests that there are opportunities for brands and their guardians in periods of recession.
Maintaining budgets, increasing share of voice
It’s clear that doing everything you can to maintain your budgets can contribute to increasing sales during and after the recession.
The main reason being that several of your competitors are likely to reduce their budgets, or even to go dark, in recessionary times. This means your brand will benefit from extra share of voice (ESOV) if you can maintain spend.
If you cut your budgets during the recession, it’s even harder to regain lost ground when the economy picks up because everyone else is spending again. The IPA/FT report on Long Term Advertising Campaigns concludes that businesses investing in ESOV in a recession were several times more likely to report faster growth in profits during recovery.
Keep investing in your brand
The podcast acknowledged how previous recessions have seen budgets focused on activation channels. This is a natural reaction, in part because we’re looking to justify continued spend in tough times. But it pays to keep investing in the brand as well as in activation during a recession. This will help to maintain your points of difference and justify your pricing at a time when own label and budget products are more likely to gain market share. Market share that can prove hard and costly to regain in recovery.
It might be a tough ask to persuade the business to keep investing in your brand in a recession. But there’s a wealth of data to help you build the case that investment in a recession builds a stronger brand and delivers better business performance in the longer term.
Success stories: how we’ve helped brands thrive during tough economic times
Happy to chat
Feel free to contact me at [email protected] to discuss your brand and brand planning.
Jim Kelly is Deputy MD and Head of Planning at Story in Edinburgh