What is a Recession?
You will have been hearing a lot of talk about an oncoming recession in the UK as the Bank of England has announced its projections for 2022 and 2023. The prospect of a recession is daunting, even more so if you're not entirely sure what it means and what it will do to your business. We'll be laying it out simply for you alongside some of the dos and don'ts of advertising during a recession and how to build a successful campaign.
A recession is a period where the economy is shrinking, and there is a downturn in economic activity. They often last six months or more and they’re marked by two consecutive quarters of decline in a country's Gross Domestic Product (GDP). Recessions are different to a depression, mostly because they are less severe. They impact the cost of living, economic output, consumer expenditure and employment. For the majority of people, recessions are scary and gloomy prospects. However, recessions are considered a normal part of a healthy economy. Whilst recessions are seen as fairly normal activity by economists; they can have varying levels of severity. For example, the 2008 recession was particularly severe, it was mostly caused by its abrupt nature and the deep deregulation of the global financial market. However, economists predict that the oncoming recession in 2022 will be much shallower than in 2008 but will last for quite some time. A recession is a difficult time for everyone, and it can be accompanied by concerning feelings of uncertainty. Marketing is tricky to navigate in times when the average consumer has less expendable income, and the national mood is lower.
Advertising in a Recession
Advertising during a recession can be difficult to navigate. As a business, the pressure to increase sales is evident; on the other hand, there has to be an awareness of the current reality of consumers. One thing is very clear, though, a recession is not a time to cut back on advertising. Alternatively, it's about re-angling adverts to better suit your audience. According to Forbes, there are four essential reasons why businesses should continue to advertise during a recession:
- There is a reduction of noise level: this is where your competitors draw back their advertising spends and allows for a repositioning of ranking between similar brands. An example of this would be the 1920 recession in America. Post was the consumer's favourite cereal in the US. Post significantly cut back its advertising budget whilst Kellogg's doubled its spending. The release of Kellogg's new cereal Rice Krispies and its iconic “Snap, Crackle and Pop” tagline led to the company becoming the leading brand in the category and its profits increased by 30%. These days, you might not have even heard of Post before.
- Continuing advertising during a recession promotes an image of company stability even in the face of economic uncertainty. Promoting confidence in your brand will help ease consumers and support the idea that your product falls into the category of necessary buys.
- The cost of advertising goes down during a recession, meaning brands may be able to advertise to consumers at less expense.
- Loss of advertising during a recession means a brand risks losing its 'share of mind'. Share of mind relates to your brand relevance to consumers and whether they view your brand as a kind of 'go-to' for a specific product or service. During a recession, it's important to retain that status for current customers and not lose out on the potential to reach future customers, even if they're not spending as much currently.
Former Campaigns that were Successful
Each time there is a recession, brands have had to significantly adapt their marketing strategies according to the changing economy. This adaptive marketing strategy has offered up significant nuggets of wisdom on how to advertise during a period of economic uncertainty. Some examples of successful advertising during a recession include retailers such as eBay, Fairy Liquid, McDonald's and Amazon. These companies used campaigns to demonstrate that they were relatable and relevant by showing they understood the changing priorities of customers. A recession is a time to double down on your brand and create the personality and message of your company. Amazon launched their Kindle products during the recession to engage new customers and promote a ‘money-saving’ passtime for consumers. Amazon's sales grew by 28% during the 2008 financial crash as a result of this marketing strategy. Adidas launched its “#RunForTheOceans” campaign to clean up plastic waste from beaches and islands worldwide during the 2020 recession caused by COVID-19. The retailer tied its products to bigger issues and social missions like sustainability during a time where global health was on everyone’s mind.
Dos and Don'ts:
- Use humanised messaging that points towards a wider shared cause between you and your customers.
- Highlight the durability of your products and how they can be used within the context of an economic downturn.
- Focus on highlighting individual stories, whether employees, customers or brand representatives.
- Evaluate your audience and whether this will need altering, listen to your consumer and retarget your advertising based on their contextual background.
- Focus on storytelling in your adverts.
- Stop advertising.
- Be inappropriate; this would include promoting things like excessive spending.
- Continue to market to customers who are no longer clicking. Keep paying attention to who your market is.
The main takeaway of this article is that you should not stop advertising during a recession. Even though the urge to cut back on non-essential spending is natural, it's essential to continue to engage with customers and build a strong brand image that will survive economic downturns. It's important to understand that your customers may change and that your advertising needs to be adaptive to your customer's changing needs, moods, and spending patterns. At DMT, our excellent team has access to premium Google insights that allow us to provide our clients with detailed feedback on customers' conversions and click rates. Additionally, our expert copywriters have perfected market research and brand voice so we can convey your brand's messages with effective and impactful language. You don’t just have to take our word for it though, check out our case studies here!
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