Should brands invest in a marketing during a recession?
Now is one of the best times to invest in your brand marketing.
Why is that? Because it’s an even better bet during bad and uncertain times.
“Only when the tide goes out do you discover who’s been swimming naked.”
Warren Buffett; The man who built a $110bn fortune by deftly navigating economic downturns.
We’re currently in an uncertain time for many businesses and industries. We’ve been asked by a few brands (not many - not trying to hype ourselves up or anything), if they - should invest in an marketing agency during a recession/cost of living?
Sadly, we aren’t finance experts or able to give financial advice, but as an marketing and PR agency what we can do is provide insight into our own experiences and brands we’ve worked with.
⏰ This is the time to be greedy when others are fearful, and focus on the fundamentals.
As we’re geeks and love data and insights, we wanted to share (if you didn’t already know)…
most of the time 95% of customers are out-of-market, and only 5% of customers are in-market.
Like anything most buyers (especially Gen Z) are future buyers and marketing’s job is to increases future sales and brand longevity.
Consumer buying behaviour has changed massively over the years, but since 2020 and during recessions/cost of living crisis, there are many opportunities for brands to take advantage of - if well understood and the right people driving it.
Simply put, in a downturn, economic demand shifts to future buyers.
Brands listen up, when times get tough it is natural to cut your marketing budgets and outsourcing to agencies. Yes, we understand that some businesses have too, but to be honest these are the things you should really be double downing on.
This is where having a solid (and even lean) in-house market team comes into play. If you do, it makes sense to cut budgets and outsourcing spends to maximum the brands goals and focus from within.
But, if you don’t, you will then rely on lack of experience within your marketing team and let juniors run a businesses core function to drive awareness and sales. They usually lack strong strategic marketing skills 😬 (sorry to say but facts). So, then the marketing strategy and content becomes very basic with no real purpose or goals attached to it.
Marketing efforts will not be as impactful that you might think they are. This then provides you with limited reach, engagement, brand presence and creative marketing you would need to reach more audiences and get a better ROI.
Brands you need to understand that marketing is the KEY to your business growth!
We’ve found that brands sometimes tend to ignore the value of doubling down and spending during times of uncertainty. This leads to competitors taking the lead and getting into the minds of consumers.
The brands that invest during downtimes increasing things like;
🎯 Investing in paid advertising (social and Google)
🎯 Online social campaigns (nope, we’re talking about giveaways and comps and cheap and easy way to gain followers, but not increase loyalty and spend)
🎯 Being seen on the platforms consumers spend their time
🎯 Creating the content that their audience(s) want to see and relate too
🎯 Investing in the right content creators/influencer collaborations and partnerships
When this is done right there’s enormously-more-valuable segment of future buyers, who are the source of future cash flows.
Let’s talk brand building marketing… 👇🏽
Brands sometimes over-invest in short-term marketing and sales activation and under-invest in actual brand building. Brand building primes future buyers long before they enter the market (and boosts short-term sales too, when done right).
In a recession and/or cost of living crisis, brands can be guilty of the above.
We know and understand that marketing budgets are usually the first thing to get cut, but these cuts aren’t always evenly distributed. Brand marketing often gets cut the deepest, and those freed-up-funds often are re-allocated to junior members of staff that lack the experience to build a brand long term or on unfocused ad spend that has no real purpose or goals behind what is going out.
“Recycling old content, posting product only images, pushing sale/buy type content and giveaways/ competitions to gain followers and cutting fresh thinking and strong valuable collaborations, maybe free up time and funds, but the return is poorer.
This shows a real lack of brand marketing, focus and short term thinking. By doing this, what it actually shows is wanting quick wins, vanity in numbers, lack of connecting with customers and the longevity of a brand”.
Rochelle White, Founder & Creative Director
By doing the above, it doesn’t really make much sense, because it has a limited reach of audiences and also no reason for people to generally connect and engage in a brand.
If you’re reading this as a brand that does that, you’re literally competing to serve “act now” messages to buyers, at a time when most of your buyers literally cannot act now.
This type of messaging and marketing is more like wrong person, wrong message, wrong time. Instead it should be talking about right person, right message, right time.
What you should be doing in anytime of uncertainty is doubling down on creating marketing memory generation, and investing in effective brand advertising and content creator marketing that increases future demand from buyers.
Let’s be clear here, marketing memory generation is not about profiting in or during recession and/or cost of living crisis, it is about capitalising on your recovery, when things pick up. Because this will happen when buyers re-enter the market, the most memorable brands will end up capturing the majority of sales… fact!
As a brand you need to think harder about where to cut spend and where and when to invest. Brands need to think past the recessions and cost of living crisis and invest in all aspects of multi-channel marketing and advertising.
This helps set up your company up for future success. The fact that most brands will do the exact opposite just makes the arbitrage opportunity even bigger.
Where to cut and where to invest 💸
We appreciate and understand that some of you reading this will probably have to cut marketing budgets somewhere, but we don’t agree that brand marketing is what should get cut first.
Because in all honesty and here is the uncomfortable truth: there’s other things that brand would be better off trimming.
Keep in mind that organic social media content, giveaways and competitions are expected to generate *zero* to little growth for brands (long term).
Why?
Because this is a short term fix for some quick follower gains.
Consumers are looking for more when it comes to brands and content. Most organic content reaches less then 75% of a brands audience on social platforms, unless the audience are really engaged with that brand or the (brand) spending on platforms.
Plus, some brands either go too heavy on pushing product only and lack any sort of storytelling, strong content creation with content creators and sharing UGC (user generated content).
It becomes very light on the actual brand values, storytelling, authentic partnerships and understanding what their audience want and relate too. Organic only works if you capture the customers attention and they get attributed to your brand.
If you do need to cut your marketing budgets, try creating a strong lean team in-house teams that can work towards business goals and have a good level of marketing experience.
Our recommendation is to have a marketing spend (no matter the size) and be strategic and clear with it. Once you find what works, reinvest and keep doing that.
Yes, you can recycle old content that customers remembered and recognised (one is usually all you need). Research shows that great creative doesn’t really wear-out – it wears-in and becomes more effective over time.
Take the time to look at and understand your data and insights across all platforms like your website, socials, email lists etc. This will help you to build an actual picture of your current audience and your sub-audiences, which as a result will help you build a clearer picture and maximise efforts.
You should have a good level of multi-channel marketing that generates a mix of short-term sales as well as positioning the brand for excess long-term growth and future proof.
Investing in your marketing is the best bet in good times, and it’s an even better bet in bad times, when there’s steeper competition for a dwindling number of in-market buyers, you can really take advantage of this and put you’re best foot forward.
If you would like to have a chat with us around marketing during challenging times and future proofing your brands, feel free to get in touch here or drop us an email or give us a call.