The talk of a looming recession is swirling. And although anxiety is high among investors and businesses during this unprecedented time, there are opportunities for companies positioned well.
It is human nature for company leaders to cut their spending as the economy slows. This often hits marketing and advertising budgets immediately, but brands that continue advertising and marketing during a recession will fair best.
According to Forbes, total ad spending in the U.S. dropped by 13% in the last recession in 2008. Yet the advertisers that maintained or grew their ad spending increased sales and market share during the recession and afterwards.
Why should you advertise during an economic slowdown?
- The wise Henry Ford said that “A man who stops advertising to save money is like a man who stops a clock to save time.”
- You can own your sector and be more visible than your competitors
- You can create a long-term position for your business. As your competition cuts back, you will stand out more. Be bold and win the long game.
- Your audience is online more than ever during these times
- Your company or brand looks trustworthy, secure and fiscally strong during challenging times
- When Sam Walton, the founder of Wal-Mart was asked, “What do you think about a recession?” he responded, “I thought about it and decided not to participate.”
It is not business as usual – make sure your messaging reflects that.
It may seem prudent for marketers to cut back on advertising during a recession, but the truth is that the brands that maintain their ad budget and/or change their messaging can get a long-lasting boost in sales and market share. The best strategy is to go all in to understand your customers needs in this current market and respond accordingly. Be human and it will pay off.
If you communicate well, show compassion and value in your messaging, people will pay attention. And remember that economic slowdowns come and go, and although the sting can last, be careful how you react. There are things you can do now to keep your company in business for the long haul.