Marketing: During and Beyond the Recession

No matter which industry you belong to COVID-19 has no doubt greatly changed how we operate on a day to day basis. Preparing your brands for these unprecedented times is definitely a swim through unfamiliar waters and there’s much uncertainty about how brands should react now and what to prepare for in the months ahead.

Now policies are being tightened further, with social distancing measures being enacted globally and more strictly, brands are feeling the crunch as numbers across the board fall as only those deemed essential services being allowed to continue operations.

With an overall drop in spending, the question brands are now looking at is why not turn off marketing altogether? We delve into the topic to aid in making an informed decision.


 

What Happens During a Recession?

One of the most critical early steps for businesses is to predict is exactly what the shape of this economic downturn will be, and since we’re entering uncharted territory this is proving to be an extraordinary challenge for economists.

However, we do know that recessions come at three different geometries, the V-Shape, the U-Shape, and the L-Shape. Each leaves a progressively longer-lasting impact on our economies, our businesses, and in the end, on us, marketers.

For more details, read the full McKinsey study.

What economists and analysts are currently rushing to figure out is exactly which roller coaster ride are we about to take, and what can we do to ensure we end up with a V-Shape and not an L-Shape recession. Preparing for the quarters to come can prove much easier if you can estimate the nature of the recession ahead.


 

So What Role Does Marketing Play Exactly?

Marketing plays two vital roles in getting your business through an economic slowdown. First, it can be used to soften the depth of the downturn – the degree to which your growth slows. Second, it can be used to reduce the duration of the recession effect by accelerating your business in the upturn once the economy awakens.

Currently, we’ve seen the spend on Facebook advertising in the US decline over the course of the past few weeks, but as governments, markets, and businesses start to get a better sense of where this is headed, and once we set strategies to counteract, this is likely to change.

We’ve seen this happen in East Asia already, where spending on Facebook advertising returned to its pre-March figures.

Even with East Asia stabilizing, though, it is unclear if we’ll avoid a global long-term slowdown, and it’s paramount that we, as marketers, have a solid plan in place.

What Should Your Recession Marketing Plan Look Like?

Ideally, it should have three parts. One for the ride down, one for the ride up, and then a third for the acceleration after.

These are what the three stages entail:

Stage 1: Soften the Downfall

We know for sure that we’re far from being through the first stage. In this crucial point, when there’s uncertainty in the market and our business-as-usual strategies come to a halt, it’s important to have the following covered:

Maintain Agility to Pivot, Turn Off Irrelevant Campaigns

The toughest corner to position your brand in is to hope that you can ride it out and keep quiet while running business-as-usual marketing. This means you’re currently not investing your time in softening the depth of the downturn for your business.

We know, based on data from IAB, that 63% of marketers have already adjusted their advertising to mission-based marketing, cause-related campaigns or building brand equity.

Use All the Data You Can to Understand Consumer Behavior 

Use all the data available to understand which sections of your business are relevant to your audiences in the current circumstances and find ways to innovate. Your brand may still be able to offer solutions to their immediate problems.

Build a Process That’s Effective in an All-Remote Setting

In these critical weeks, it’s important to ensure that your teams can focus on the customers and content, and aren’t stuck figuring out the process. Ensure they are set up with everything they need to move forward.

Stage 2: All Efforts to Shorten Duration

You want to be sure that your brand is top of mind as soon as there’s an upturn in the economy. It is also a time when the costs to advertise have halved, which creates a possible opportunity for prepared marketers.

See the full data report on current ad costs.

Double Down on Brand Loyalty 

Focus on understanding the concerns of your core customers today. What can your business do now to ensure their loyalty extends further than the recession? You’ll be able to transform that loyalty to business growth once spending behaviors change.

Focus on More Content and Value Through Content 

While in the first stages of the crisis the digital channels may be very crowded, later down the line there could be more space for your brand to surface. Social distancing and the uptrend in online usage is likely to stick for months, and your brand can turn to content marketing to reach these stay-at-home audiences.

Don’t Be Afraid to Try Something

Get creative with how your business can provide value. It may not only be through direct product sales, but could involve services or subscriptions. You could, in the end, find new revenue streams for your business. Don’t be afraid to offer alternative pricing either

Stage 3: Earn the Time Back

If you’ve set up your business for growth during the second stage of the recession, you may be able to catch up if the downturn hasn’t been too long. Being top of mind will allow you to tap into the recovering economy.

Spend More Than Ever

As the downturn ends, it will not only be your chance to grow, but it’s also a time when you can leap ahead of competition. Each business will have weathered the crisis differently, and if yours was set up just right for this stage then increasing your advertising spending can help you expand.

Continue to Measure Consumer Behaviour

This crisis will likely leave a lasting impact on our behaviour. You’ll want to know exactly which behaviors have remained permanent, like working from home or ecommerce behaviors, and which have returned to what they were before the pandemic.

The Takeaway

This is going to be a time when we are truly tested for how fast we can move on our feet and how readily we’re willing to accept and act on the dire state of our circumstances. One of the biggest dangers, as the insights by McKinsey suggest, is for organizations to stay optimistic rather than cautious.

What the next couple of months are going to look like for your business does not only depend on the circumstances, but also on how exactly you choose to face them.

Charles Tidswell

Charles Tidswell

Charles is Vice-President JAPAC at Socialbakers

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