With the looming on the horizon, marketers have the right to be worried. After all, marketing is often the first thing cut when businesses tighten their purse strings. But as we鈥檝e learned t, cutting marketing budgets isn鈥檛 necessarily the right way to go.
Reducing marketing spend means fewer sales and less revenue, ultimately compounding the problem. In fact, according to marketing expert , 鈥淏usinesses that cut their advertising expenditures in a recessionary period lose no less in terms of profitability than those who actually increase spending by an average of 10 percent鈥�.
So if reducing marketing spend is not the answer to getting through the recession, what is?
There are a few things marketers must keep in mind as we move into an area of economic uncertainty. Let鈥檚 take a look.
In Peter Steidl鈥檚 , 鈥�Survive, Exploit, Disrupt: Action Guidelines for 黑料社入口 in a Recession鈥�, he notes that companies who increased spending during a recession actually saw a 4.3% increase in profits compared to those that cut spending (0.8% increase).
Unfortunately, many companies don鈥檛 think that way. The knee-jerk instinct of many brands faced with a recession is to immediately cut marketing budgets and reduce media spend. It makes sense - less money coming in should mean less money going out.
But marketing is not a luxury, it鈥檚 a necessity. It鈥檚 as essential to brands as a utility like power or water. You need marketing to stay in business. Your brand also needs to attract new customers and stay at the forefront of established customers鈥� minds.
Following that fear-based instinct to cut as much spending as possible will have the opposite effect. Think beyond the recession and focus on what鈥檚 right for your business.
Instead of cutting out the lights, so to speak, now is the time to take a look at the tools you currently use to determine which are not improving the bottom line or saving your organization money.
When evaluating your existing tech stack, you want to ask yourself the following:
Tech stacks can , making them a great place to look when cutting costs. As you evaluate your existing technology, lean toward solutions that reduce waste and improve marketing efforts. This is a 鈥渟pend smarter, not harder鈥� situation.
How do you evaluate your tools, tech, and teams? By relying on your ROI analyses to direct your attention to the channels, tactics, creatives, partners, and campaigns that really drive awareness of your brand and, of course, revenue.
Keep in mind that gut feelings can only get you so far during this assessment. You may think you know what is and isn鈥檛 working and what is and isn鈥檛 getting you the most value for every dollar you spend. But you can鈥檛 really be sure -- not without the right data.
You need to pair your human experience with real data that provides value so you can double down on what鈥檚 working and scale back on what isn鈥檛.
When in doubt, trust your ROI analysis.
Learning from the past is one of the best ways to predict the future. It鈥檚 why we are continuously talking about unified measurement and omnichannel optimization.
Just like a recession is not the time to cut your advertising budget, it鈥檚 also not the time to cower down and stick to the status quo. If the pandemic taught us anything, it鈥檚 that new opportunities can arise from difficult situations.
Don't be afraid to test a messaging strategy, tactic strategy, or channel strategy. You don鈥檛 have to make dramatic changes or shift large amounts of dollars into something new. Start incrementally.
Study the data yielded from these small changes in order to make larger-scale updates with confidence. This data, and the results of your testing, will be the light that guides you through the recession.
In a recession, or any unstable economic environment, flexibility and speed are crucial. How much can you adapt and how quickly? When the media plan your team created at the beginning of the year is thrown out the window by Q2, can you rise to the challenge of changing that plan on the fly? Can you restructure plans for today and for the future at the same time?
Agility and optimization will become extremely important as plans shift from yearly or quarterly planning models to more real-time monthly or even weekly models.
To stay lean and nimble, you need to understand how your online and offline channels work together. Channels are more connected than many marketers realize, and to institute these kinds of at-speed changes, you鈥檙e going to need to intimately understand how they interact.
Successful pivots rely on swinging all of your moving pieces in the same direction, all at once.
If the goal is to stay as lean, quick, and efficient as possible throughout the recession, now is the time to get back to the basics of marketing and invest in more affordable advertising methods. Here are a few to consider:
Remember that marketing can take many forms and sometimes the basic (and low cost) forms work just as well.
With economic stress and uncertainty looming, it鈥檚 all too easy for marketers and brands to give in to fear and make panicked knee-jerk reactions. Don鈥檛 let this be you.
The right tech, tools, and partners will help you trim the fat and stay lean. Improve your ROI by optimizing with clear-sighted analytics, testing, and learning as you navigate not only this period of uncertainty but beyond.
The goal here isn鈥檛 just to survive through the coming recession 鈥� it鈥檚 to thrive.