How To Advertise During a Recession

Advertising is key to long-term business growth. Successful advertising strategies can contribute to increased brand recognition, trust, loyalty, and market share. While managing advertising budgets is always important, efficient marketing spending across all channels is critical in the event of an economic downturn.

Business leaders need to make difficult budgeting decisions to reduce overall expenses during a recession. Having an understanding of which advertising strategies, channels, and messages drive the strongest results can help your business continue to invest in advertising during a recession while optimizing costs.

Top tips for advertising during a recession:

• Learn and understand current economic trends
• Maintain consistent branding
• Conduct up-to-date market research
• Prioritize essentials
• Plan for the long haul
• Connect with customers
• Increase client retention efforts
• Learn from successful recession advertising campaigns

Learn and understand current economic trends

A recession’s business impact can vary greatly depending on an organization’s industry and target market. As you begin assessing how to most effectively adapt your marketing and advertising budget for an economic downturn, make sure you have an understanding of current economic trends and how they might impact your business.

Questions to ask as you assess economic trends include:

• What are the top factors contributing to a potential recession?
• How long are economists predicting an upcoming recession might last?
• Which industries will likely be the most impacted if a recession strikes?
• How will the company’s products and services fit into customers’ reprioritized budgets?
• How can the business evolve products and services to meet customer needs during a downturn?
• Will current advertising channels and strategies continue to drive results during a recession?
• What steps can the business take to optimize advertising costs?

Related: How To Prepare for a Recession

Maintain consistent branding

When consumers or business buyers tighten their budgets during a recession, they’re more likely to continue spending on familiar brands. Research from Salsify shows that 46% of consumers are willing to pay more for brands they know and trust. Additionally, according to a survey from Semrush, building brand awareness is the top goal for brand marketers in 2022.

If your business visually rebrands or repositions your messaging in a way that veers too far from what customers recognize, you risk losing previously established brand recognition, as well as both current customers and potential new business. Another drawback of rebranding during a recession is that it might make customers think the business isn’t performing well, leading to significant changes being made to the brand.

While you might need to reframe messaging or product offerings during a recession, maintain consistent branding and ensure all marketing and advertising efforts align with your organization’s mission, vision, values, and areas of expertise. This approach will help you retain existing customers and continue to attract new customers in your target market.

Conduct up-to-date market research

Data from the World Advertising Research Center (WARC) shows that global advertising spend is projected to increase 8.3% by the end of 2022, but is forecast to slow significantly and increase only 2.6% in 2023. While growth is slowing, leading companies focus on understanding the broader market and effectively optimizing advertising efforts, rather than immediately reducing advertising costs in the event of a looming recession.

When conducting market research, consider analyzing:

• Competitor marketing strategies. Identify whether competitors have recently increased or decreased their advertising efforts with a possible recession on the horizon. An increase in competitor advertising can lead to a decline in market share for your business. In fact, research from Analytic Partners found that the average brand loses almost 15% of its business if a competitor of a similar size doubles its marketing efforts. Also analyze which advertising channels competitors are tapping into and the messaging they’re promoting, including whether messaging has changed since economic conditions have begun shifting.
• Top-performing advertising mediums. During a recession or at any other time, actionable data is critical to making informed, strategic decisions about optimizing your advertising budget. Review data related to your company’s previous advertising campaigns to determine which advertising mediums perform well versus those that don’t drive brand awareness or business leads. Also research the overall advertising market, such as which mediums drive the most engagement across your target market. Cut the channels that don’t drive results and reallocate this budget either into stronger advertising channels or elsewhere in the business. Also avoid testing out new advertising channels or tactics with which you’re unfamiliar during a recession.
• Messages that resonate with customers. Review recent messages you’ve shared with customers. For example, if your business engages in email marketing or display advertising, assess whether specific messages have driven more engagement from customers and prospects than others. If you notice specific top-performing messages, identify ways to embrace similar messaging for upcoming advertising campaigns. Also keep in mind that messages might need to shift based on changing consumer sentiments during a recession.  

Related: How Recessions Affect Businesses

Prioritize essentials

During a recession, both consumers and business leaders reduce spending on indulgences and luxury items and reprioritize to focus on essentials. For consumers, essentials include food, housing, clothing, and medical care. Business essentials might include any products or services to keep the company running smoothly and efficiently during a downturn.

Whether you market to consumers or business buyers, place an emphasis on essentials and budget-friendly items as you rethink your advertising budget and strategy. For example, if your company sells business software at different pricing tiers, cut back on advertising for the more costly options and invest in advertising affordable subscriptions or packages. This can help your business reach more customers who are cost-conscious during a recession. Once they experience the benefits of your products or services, they might also be eager to upgrade to a higher pricing tier to access additional features.

Based on your market research, if specific products or services don’t drive results from an advertising or sales standpoint, reduce advertising on these items. Another option to consider to clear slow-moving inventory is bundling lower-performing items with other offerings at a discounted rate.

By focusing on essentials and top-performing items in your portfolio, your business can emerge stronger following a recession.

Related: 10 Simple Strategies for Cutting Business Costs

Plan for the long haul

In an effort to quickly cut costs, some businesses might slash their advertising budgets significantly. Other businesses consider advertising discounted products or services to drive a higher volume of sales during challenging economic times. Both options are short-term solutions that can have a negative long-term impact on brand, revenue, and business growth.

By decreasing advertising, companies run the risk of losing share of voice, search result ranking, and brand recognition. Bouncing back once budgets increase again can be challenging. However, increasing your advertising budget can lead to positive results both during and in the years following a recession. Research published by McGraw-Hill found that business-to-business companies that increased their advertising budgets during the 1981 through 1982 recession saw that by 1985, sales increased 256% over those that didn’t keep up their advertising.

While short-term discounts may increase the volume of sales during a recession, this can alter a brand’s perception and value in the long run. A study published in Harvard Business Review during the Great Recession found that while discounts can contribute to sales of a product or service temporarily increasing, consumers are likely to perceive the brand as lower quality long-term. Once the economy recovers and purchasing power increases, consumers are often unwilling to return to paying a premium on items that were previously discounted; they’re more likely to purchase from brands with consistent pricing.

Related: 7 Business Scaling Strategies for Growing Your Business

Connect with customers

When individuals and businesses tighten their budgets during a recession, building meaningful, rather than transactional, relationships with customers and prospects is key. This includes acknowledging challenges customers might be facing and highlighting how your business can offer support, as well as identifying ways to align with customers’ values.

A global study from Havas Group found that 77% of consumers prioritize buying from brands that share their values. Additionally, research from WARC shows that 44% of successful advertising campaigns during a recession use an emotional approach.

Some ways to build connections with your customers through advertising messaging include:

• Showing empathy for financial challenges
• Keeping messages positive to show stability and support
• Emphasizing your organization’s core values
• Highlighting how your business gives back to the community
• Sharing personal worker or customer stories to humanize your brand
• Focusing on utility and value of your products and services over luxury and indulgence

Increase client retention efforts

Capturing the attention of existing clients is just as important as earning new business during a recession—and can be a more cost-effective option. Identify new ways for your business to market to, engage, and retain customers to drive continued success both during a downturn and in the years to come.

Marketing to current customers offers a wide range of business benefits. Existing customers are already aware of and trust your brand. Your organization also likely already has customers’ contact information and some data about their spending and engagement habits on hand. This can make it much easier than casting a wide net to prospective customers who haven’t previously purchased from your business.

Some ways to drive client retention include:

• Soliciting and implementing customer feedback. If you don’t already have one in place, develop a process to ask clients for their feedback on your products, services, and customer experiences. Doing so can ensure customers feel valued and can provide your business with important data to improve the customer experience and drive retention.
• Sharing personalized data points. As customers rethink their spending habits, this offers an ideal opportunity to remind them of the value your business has to offer. Share personalized data with customers to highlight key benefits they've experienced through your products or services, such as cost and time savings, to encourage retention and repeat business.
• Renegotiating contracts. Offering loyal customers flexible contracts can help drive retention as businesses reprioritize their budget. If you risk losing customers due to budget concerns, identify ways to renegotiate, such as changing payment terms from annual to quarterly or offering a discount for early invoice payment.
• Incentivizing retention. Let customers know you appreciate their business by offering incentives for retention or contract renewals. Incentives can include a free month of services, a complimentary incremental product or service, or a minor discount to show appreciation for customer loyalty.
• Implementing a customer referral program. Your most loyal customers are most likely to refer new business to your company. Consider implementing a formal program that encourages customers to send new business your way. Referral incentives can include discounts on products or services, credits for future purchases, gift cards, and more.

Related: What Is Customer Retention? Basics, Strategy, and Examples for 2022

‍

Learn from successful recession advertising campaigns

Effective recession advertising requires striking the right balance of budget, campaign channels, and messages that resonate with customers. Some of the world’s most well-known brands excel at shifting their advertising strategies during an economic downturn. Consider the following success stories as inspiration for your organization's advertising campaigns if and when a recession strikes.  

Procter & Gamble

While Procter & Gamble sells a wide range of consumer products today, in the 1920s, the brand primarily sold household soaps. Recognizing that soap is an essential, even during challenging economic times, Procter & Gamble ramped up advertising efforts during the Great Depression. At the same time, many competitors cut back on advertising, driving increased market share for the brand. Procter & Gamble also started sponsoring daily radio serials during this time, widely known as “soap operas,” to appeal to homemakers. This recession-era advertising strategy and increased brand recognition helped pave the way for Procter & Gamble’s continued success as a household name today, nearly 100 years later.

Coca-Cola

During the Great Recession, Coca-Cola launched its global “Open Happiness” campaign, encouraging consumers to take time each day to enjoy life’s simple pleasures, even amid the stress and difficulties of modern-day life. In the U.S., the campaign featured high-profile advertising spots, including the Super Bowl and Academy Awards, along with a wide range of promotions and outdoor and print advertisements. While Coca-Cola is often considered a want, rather than a necessity, the campaign took an emotional approach that spoke to customers and helped drive a 17% increase in sales and 4% increase in market share in the U.S. in 2009.  

Netflix

At the height of the Great Recession in 2009, Netflix share price increased 57% over the previous year, earnings went up 24%, and subscriptions surpassed 10 million, growing by more than a third since 2007. Meanwhile, Blockbuster, its primary competitor at the time, experienced a $374 million loss and closed hundreds of stores in the same period. As consumers tightened their budgets during the recession, Netflix achieved this growth by promoting more affordable video rental options than Blockbuster and other competitors. Around the same time, Netflix began the transition to streaming services, offering even more affordable entertainment options for budget-conscious consumers.

Fast-forward more than a decade later. Given rising inflation and speculation of a looming recession in 2022, Netflix recently launched a more affordable, ad-supported tier for its subscription streaming service. This approach can help Netflix retain current subscribers and attract new ones who seek budget-friendly streaming options.  

Manage your advertising during a recession with expert help

Effective advertising during a recession can have a significant, positive impact on an organization’s ability to weather an economic downturn and drive continued growth in the long run. Rather than rethinking your advertising strategy on your own, consider enlisting outside expertise.

Skilled independent marketing and advertising professionals are available on Upwork to help ensure your company’s advertising strategy is impactful no matter the economic conditions. By embracing independent talent, your business can benefit from the professional’s previous experience with other clients, while saving time and reducing operational costs.

Access experienced independent marketing and advertising professionals on Project Catalog™. Browse and select from a list of one-on-one consultations and pre-defined, fixed-price projects based on your organization’s specific advertising needs. Learn more—search for available marketing strategy services and get started today.