In recent weeks there has been talk of a possible economic recession. No one yet knows when it will arrive, but another business slowdown is inevitable, which would be the first since the end of the “great recession” more than ten years ago. Often, when a recession occurs, companies, fearful of declining revenues, begin to cut in several areas, including marketing investment.
In the wake of the latest recession, advertising investment in the United States fell by 13%. Newspaper advertising spending fell the most by 27%, radio spending fell by 22%, followed by magazines down 18%, outdoor advertising by 11%, television by 5% and online by 2%.
However, several studies point to the advantages of maintaining, or even increasing, advertising budgets during a weaker economy. Advertisers who maintained or increased their advertising spending increased sales and market share, not only during the recession, but later.
Learn about some reasons to advertise during an economic slowdown
- The “noise level” in a brand’s product category may decrease when competitors reduce their advertising spending. It also allows advertisers to reposition a brand or introduce a new product.
- Brands could project to consumers the image of corporate stability in difficult times.
- Several studies have shown that direct mail advertising, which can provide greater short-term sales growth, increases during a recession.
- The content of advertising during recessions should reflect the challenges consumers face. Consumers are looking for brands that show solidarity.
- When marketing specialists cut their advertising spending, the brand loses its share of consumers, with the aggravation of losing current, and possibly future, sales.
While advertisers’ natural inclination is to reduce advertising during a recession, brands that maintain their advertising budget and change their messages can gain lasting momentum in sales and market share.
Customer behavior also undergoes profound changes. That’s why you need to accompany your customers, change your message and even redesign your value proposition. This is not the time to stop spending money, but to change the way you spend it. It’s also an opportunity, because companies that are willing to be what customers need in a recession can retain many of the new customers they get and consolidate the loyalty of those they already had.
