Skyrocketing inflation and rumblings of an upcoming recession are dominating news headlines and water cooler conversations. As a marketer, you’ve probably been in meetings where the number one question is, “During these uncertain times when consumers are concerned about finances, should we be pushing out marketing campaigns?”
The short answer is an unequivocal YES! The long answer, which delves into ‘how do we do this right,’ is more nuanced and precisely what this article is all about.
Here’s the thing to remember: marketing during uncertain times – be it economical, political, or otherwise – needs to be handled with care. But, as history has shown us, brands that strike the right note and tone can turn a concerned consumer into a lifelong customer. Companies that let the opportunity pass them by may regret it for years to come.
Taboola was built to serve marketers; they are at the heart of everything we do. That gives us a wealth of experience and unique insights into marketers’ and consumers’ mindsets. We’re here to provide you with a roadmap that will help you navigate through these times.
Understanding Consumer Confidence
Consumer confidence measures consumers’ feelings about current and future economic situations. Economists and businesses across all industries use it to gauge the state of the economy.
According to The Conference Board, the Consumer Confidence Index fell to 98.7 in June, down 4.5 points from May’s 103.2. To give that some perspective, this is the lowest level since February 2021. Adding to the grim picture is the Expectations Index, which measures consumers’ short-term outlook on the labor market, income, and business. It plummeted to 66.4, a low not seen since March 2013.
What does that data mean? Consumers feel insecure and anxious about the effects of inflation, triggered by rising prices at the gas pump and supermarket and compounded by devalued investments. News of employee layoffs is fueling worries even more. Some consumers may remember The Great Depression, the Lost Decade in Japan, or the 2008 market collapse. They may feel an urge to cut back on spending.
You likely feel it, too, which is why you’re wondering what to do with your marketing. Even if you didn’t live through an economic downturn, you already know what it’s like to market during high anxiety times (hello, pandemic).
The good news is that your brand can flourish if you authentically embrace empathy.
Pausing Marketing Efforts Is a Mistake
After the 2008 recession, US ad spend dropped by 13%, but numerous studies show that brands that maintained or increased their ad budgets during economic downturns boosted market share and sales during and after the recession. It might sound odd at first, but it’s quite logical.
If fewer brands are advertising, advertising costs are lower. There’s also less competition for consumer attention, which provides an opportunity for the brands who push forward to establish themselves as stable and be seen more. On the flip side, brands that cut ad spend lose that top-of-mind spot for consumers, leading to long-term losses.
Consider the ‘cereal war.’ In the years before the Great Depression, Post was the leading ready-to-eat cereal brand, but when the recession hit, the company slashed its ad budget while rival Kellogg’s doubled theirs. With that savvy move, Kellogg’s increased profits by 30% and established itself as the new leader, a title it still holds a century later.
During the 1973 recession, Toyota outspent Volkswagen and became the top imported car brand in the US. In 1990, McDonald’s lowered its advertising. They saw sales decrease by 28%, while Pizza Hut and Taco Bell increased ad spend and sales by 61% and 40%, respectively. Against all odds, Amazon took the world by storm, growing its sales by 28% in 2009 as the economy crashed.
The takeaway here is simple: be present.
Extend Empathy, Abate Fear
A common marketing approach is to instill fear in people, and in some instances, FOMO (the fear of missing out) works well. This is not one of those times.
We only have to think back to the onset of the pandemic and the advertising campaigns that championed empathy to see the results of an empathy-focused campaign.
At the beginning of the pandemic (Q2 2020), Ford made a brilliant move. The company pulled its national ads that prompted vehicles, replacing them with new campaigns that oozed empathy by showcasing how Ford Credit offered payment relief to car buyers. The message was well received and positively impacted brand perception with its ‘we’re in this together approach.
An IAB study found that during the pandemic, while nearly half of brands reported adjusting ad spend, 73% of marketers that continued advertising changed their creative messaging strategies to meet the moment, shifting to a mission or cause-related approach.
Tips for Marketing During Uncertain Times
Marketing activities shouldn’t grind to a halt, but your messages should look different when consumers feel insecure.
Rethink Your Message
Don’t lose your brand but do make slight adjustments. Find the right, empathetic message that will resonate with consumers. For example, consider messages that emphasize togetherness and community support instead of incorporating a tone of luxury and celebration into your creative copy. Empathize with your consumers while encouraging and cheering them on.
Pay special attention to your existing customers and their needs. A brand that understands them during tough times is one they won’t forget and will continue to support when things turn around.
Look to Performance Marketing
Performance-based marketing makes sense during recessions because you only pay when consumers take specific actions.
Tops Supermarket, a leading retailer in Thailand, turned to Taboola during the pandemic when it wanted to drive more conversions on its app and website. The brand’s sponsored content and video ads, which included empathetic messaging, ran across Taboola’s network, earning it a 10% increase in vCTR month-to-month.
Final Thought on Recession Marketing
This is not the first recession marketers have faced, and it certainly won’t be the last. History shows that brands that spend during tough times come out on top. It’s essential to stay present and connect with loyal and new consumers through relevant messages that reflect the times and people’s mindsets. Remember to be authentic and maintain flexibility so you can alter your message as time goes on.
And lastly, make the most of your budget with performance marketing. As marketers, we do understand your position. Reach out if you need guidance or support with your marketing campaigns. We’ve got you!
Further reading: 5 Top Recession Marketing Examples for Advertising in Tough Times