Advertising During a Recession

July 27, 2022
By iQ Staff
Hand holding a light bulb against a backdrop of a declining graph, suggesting innovative solutions in a downturn.

Business leaders are bracing for an economic downturn. Soon, they will be closely examining expenses with the aim of cutting costs. CMOs must be prepared to develop advertising budgets that reflect the new economic environment and defend that budget against cuts.

Here are four tips for advertising in a downturn.

 

1. Think long-term.

While it may seem judicious to cut ad budgets in a downturn, doing so can negatively impact your brand long-term. Sacrificing share of voice (SOV) during a downturn will only help your competitors grow their market share. And once the economy recovers, you’ll need to spend significantly more on advertisements to recover that lost market share.

 

2. Think like an investor.

Smart investors know when to seize an opportunity. During a downturn, they take advantage of the market and buy low. Likewise, smart marketers can gain more SOV for a lower cost in a downturn because their competitors are likely cutting their ad budgets, making the market less competitive. Those that continue to advertise during a recession will gain a larger SOV and market share simply by maintaining their budgets.

 

Those that continue to advertise during a recession will gain a larger SOV and market share simply by maintaining their budgets.

 

3. Revisit your messaging.

Different times call for different messages. Review your creative and your brand’s value proposition to address the current economic climate. Speak to your customer’s concerns, like increasing prices, and adjust your tone accordingly.

 

4. Communicate proactively.

Don’t wait until budgeting season to defend your advertising costs internally. Proactively communicate your advertising strategy with your executive team and demonstrate how your gains will offset the expenses and lead to higher profits.

Brands that can seize opportunity in a recession will emerge in a better position than their competitors. Adopting strategies that will help your business grow, rather than simply following the herd, will increase the odds that you thrive throughout a financial crisis and beyond.

 

iQ 360 offers a Recession Toolkit that’s quick, strategic and pragmatic. Contact us to learn more about how we can help you manage the risks associated with economic recession.