3 Reasons to Continue Ads During Economic Downturn
It’s not unusual for marketing to be first on the chopping block when companies hit hard times. Often, leaders mistakenly focus only on retaining the teams responsible for making the products or performing the services. While those are critical positions, this approach fails to acknowledge the vital role marketing plays in selling those goods and services. Cutting marketing services during an economic downturn can make a recovery even more challenging.
Instead, businesses should look at how to market more strategically. There are options for cost-cutting, such as adjusting messaging or frequency, that can help when budgets are tight. Preserving your marketing efforts allows you to engage your target customers and keep your brand top of mind for consumers interested in your brand. It also helps you to respond with more frequency as the economy recovers.
Why It’s Important to Advertise During Downturns
Turbulent times call for marketing innovation, not eliminating all ads. The most enduring companies know you should increase your marketing budget instead of cutting it when the economy stalls. The numbers support this recommendation. In the last recession, 60% of companies that increased their ad spend realized a more significant ROI, with a 17% increase in sales from an increase in paid advertising.
Greater spending during tougher economic conditions can be buoyed by customer loyalty. It’s not just companies that are cautious about where they spend their budgets. Consumers also become more selective about what they choose to purchase. They will favor companies they trust rather than risk losing money on ones that could disappoint. Savvy digital marketing helps to ensure you keep your customers engaged and connected to your brand.
Conversely, curtailing your marketing efforts could have adverse effects. Let’s look at some of the unintended impacts of putting a stop to your ads during a recession.
1. Cutting Ads Damages Your Brand
When times get tough, and consumers have their trust shaken, how you present your business to the public can make all the difference. If consumers suddenly stop seeing your ads, they may wonder if your company is in trouble. That is not how to inspire customer confidence or encourage them to continue patronizing your business. It is a time to remind your customers that you are here to stay.
It is also essential to remind them of the value of your goods or services. When people are searching for a company like yours, you want to make sure that your brand is prominent and your value proposition is obvious. Reducing ad spending puts you out of customers’ sight and minds, decreasing brand awareness and diminishing brand loyalty.
2. Competitors Are Less Active
While other companies cut ad spending or postpone new product launches or events during tough times, staying proactive with your marketing means getting a more significant market share and gaining a competitive advantage. One study shows businesses that stopped advertising or ‘went dark” during an economic slowdown saw a 20% drop in sales by the end of the year. That leaves an opportunity for your brand to shine. Audio and digital ads are ideal for reaching your target audience where they spend their time commuting, working from home, shopping online, or streaming music or podcasts.
3. Shifting Consumer Needs Open Opportunities
What consumers look for during a robust economy can change drastically during a recession. However, this could present an opportunity for your business. Does your marketing highlight your value proposition? If not, now is the time to emphasize how you can help them save money or add value.
Now is a good time to evolve to meet your customers’ needs and to develop new marketing strategies and materials to achieve your goals. Giving back to your loyal customers is another way to reinforce your commitment to those who choose to spend their money with you. Your ads can make them aware of special promotions such as gifts with purchase, random drawings, or other perks to show your customer appreciation and strengthen the customer relationship. It is also a good time to innovate by presenting more budget-friendly options, illustrating how people can use your products differently, or highlighting how long-lasting they are over the competition, thus reducing expenses and increasing their usefulness.
When the Economy Is Down, Strategic Marketing Can Put Your Business on Top
Economic downturns are stressful for everyone, including businesses. It is important to remember that your customers still have to have goods and services. Strategic marketing reminds them that you are here for them, that you appreciate their ongoing loyalty, and that your products deliver superior value or cost-savings. Digital and audio advertising ensures that you remain top of mind for your customers and puts your business at a competitive advantage when your competition goes dark.
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