The buzz coming out of the ANA “Masters of Marketing” conference is different from past years. It was not about the latest trends and cool new technology, but about meeting the demands of younger consumers and how to fight to keep marketing budgets in uncertain times.
Many advertisers and agencies will tell you not to cut marketing in uncertain times. Rather, now is time to spend and take advantage of the opportunities. Early reporting suggests industries are split on this with some such as travel, media and entertainment ramping up spending while others , such as the early pandemic boom industries of finance and home furnishings, are dramatically pulling back.
Evidence suggests leaning into the power of positivity might pay off. Over the last century, companies that increased marketing budgets during recessions often generated proportionally higher sales than those that cut. In fact, in every recession since the 1970s, companies that increased marketing spending in a downturn outperformed those that slashed.
While industry leaders looked at forecasts and reacted with fear, challenger brands saw opportunity. This does not mean they reacted without thought. It means they felt properly prepared for the moment, which empowered them to pivot to an advantageous position.
Preparing for uncertain times – which is the only thing certain these days – requires a different marketing approach starting with these five actions:
Review technology investments
The last five years have seen a surge in marketing technology tools and platforms. Now is the time to review these tools, ensure they are working together, integrated well and performing optimally.
Reduce technology tools where necessary and invest in platforms that drive first-party data insights and actionable consumer engagement. That’s something Twinkies did In 2012. After parent company Hostess filed for bankruptcy, the snack brand streamlined its process and developed a new formula with double the shelf life of the old, enabling Hostess to sell more products for less cost.
Audit the customer journey
Due to the global pandemic, supply chain issues, inflation and the rise of e-commerce, consumers have significantly changed how they purchase and where. Audit the customer journey for your products or services and ensure a modern understanding of how consumers are purchasing today and how they plan to purchase in the future. Adjust your technology, targeting and investments accordingly. During the 2008 recession, Netflix found creative ways to stream its content through partnerships with brands like Xbox, which increased subscriptions and streams.
Invest in (the right) innovation
Innovation is the key to succeeding during times of transition. But only with the right bets.
Now is the time to get the lay of the category landscape, determine brand health, execute consumer insights segmentation research and evaluate where brands stand and can win. The gold standard for doubling down in a recession is Kellogg’s. While rival Post cut, Kellogg’s invested heavily in the late 1920s to promote a new cereal, Rice Krispies and created more jobs by thinking outside the box to a six-hour workday, while investing in its home community of Battle Creek, Mich.
In times of defense, larger groups of loyal consumers will drive strong, continued sales. Consider where technology, innovation, first-party data and owned platforms can provide new ways of driving loyalty. Then, invest in loyalty-based marketing and digital platforms to encourage long-term loyalty and turn loyal customers into advocates. Coming out of bankruptcy in 2005, Delta heavily invested in improving the customer experience by investing in its workforce. Better trained and happier employees meant more satisfied and loyal customers.
Acquire a new position
As competitors go into defensive mode, it may be the ideal opportunity to attack. Look for significant share opportunities among your closest competitors to increase your position.
Consider besting direct competitors through landing pages, paid search campaigns, content and influencer tactics alongside in-store POS and advertising via retail partners. Despite the recession, from 2006-2008 Amazon stayed the course and continued creating new enterprises and launched Prime, Kindle and AWS, all of which still drive substantial revenue today.
When facing difficult times it is important to reexamine your focus, not your commitment. It is not the time to question how little to invest, but where to best invest to overcome these new obstacles. When consumer habits begin to shift it is important to shift with them. The brands that shift their focus on the human element of their business will see gains.
As we have learned historically, and most recently since the start of the COVID-19 pandemic, there is no recession-proof plan or company. The one thing we do know is that abandoning brand marketing will almost guarantee diminishing market share.
Instead, brands should use this period to reevaluate current approaches, pivot and unleash the power of creativity to build a deeper connection with their audiences. Brands that are able to do that will emerge from recession stronger.