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Why uncertain times can be the best time for a brand marketing boost

When it comes to reducing operating costs during hard times, historically, marketing budgets tend to be first on the chopping block. With a focus on prioritising short term sales to ride out the storm, business leaders can forget the importance of long-term strategies. 

In the midst of a recession it can be difficult to look past the doom and gloom, but we can find solace in the cyclical nature of the economy. Downturns have happened before, and the organisations that thrived are the ones that accelerated their demand generation and brand marketing when times were tough, keeping their eye on the long-term. 

Continuing to invest is for the brave (but not for everyone) 

Businesses are as unique as fingerprints; there is no one-size-fits-all approach to building resilience during challenging times. Advising that all organisations should pump up their marketing budgets at the sight of a recession is bad consultancy. The deciding factor around whether this is the right approach relies on understanding of a brand’s overall category performance. 

Take a wide-lens look at your entire category, not just your business in isolation. If your category is in decline, and you can’t forecast when the bounce-back will be, pump the brakes. It’s important to be honest and realistic. If your category is shrinking, investing in marketing throughout the recession can get you all the market share you want, but do you really want share of a market that isn’t valuable? Instead, focus on your availability spend: anything that makes your brand easier to buy from. For example, SEO makes your brand easier to find online and, therefore, buy from, PPC does the same, as does retail spend and so on. Whilst you’re in the eye of the storm with no way out, batten down the hatches.

However, if you can see category bounce-back or even growth in the next two years, now is the time to invest in demand gen and brand! 

When your category is on the up, invest! Here’s why: 

There are two main reasons why it’s a good idea to invest in long-term growth throughout a recession. 

  1. Low competition 

The natural inclination of some business leaders at the onset of a recession is to cut strategic investments in favour of short-term sales. And as the majority of companies opt for what seems to be the ‘safer’ path, they’re leaving the market wide open for more ambitious organisations to swoop in. 

As channels empty, share-of-voice becomes easier to attain, the amount you have to invest to succeed decreases - higher ROI anyone? For example, channels with auction models like PPC mean you can bid lower to retain a top spot in search. 

Ultimately, higher share-of-voice correlates with higher share of the market. As other organisations in your category quieten down, it’s easier for your brand to be louder and win more customers. 

  1. Reduced price sensitivity 

Another temptation companies will fall prey to is increasing price promotions to drive sales. However, price promotions train the brain of your audience to only buy during these periods: they’ll start to wait for those big discounts and stop buying at full price.

Holding your price and continuing to invest in demand gen (using marketing to drive awareness, interest, and leads to your business) is proven to reduce price sensitivity. Companies with strong brands are at liberty to increase their prices with less buyer sensitivity because their customers are more loyal therefore less likely to switch to value-brands as their own finances decline. 

A study by McKinsey found that the average S&P 1500 company would get a whopping 8% more profit if they increased their prices by just 1%. This proves that strong brands can raise prices to cut profit losses in a recession, without deterring their loyal customers. 

For smaller brands 

In an economic downturn, smaller brands are more likely to reach what’s called the “CAC (Cost per Acquisition) value of death” as they focus on short term optimisation of their performance marketing. This is the point at which they start getting diminishing returns on their PPC ads because they’ve met the demand that already exists. 

In times like these, smaller brands should prioritise generating more demand so their performance marketing continues to support the entire funnel, reaching their audience en masse as effectively as possible. But unlike large brands, smaller companies need to be more strategic with their channel choices. TV is one of the best ways to reach the most people, but its cost is prohibitive for many smaller companies, with digital video being one extremely effective, more affordable alternative. 

Video ads are an effective brand boosting tool for smaller organisations as they’re cheap to produce and have a low cost-per-view. One example of a tech company who has done this well is, who have significantly increased their use of video during the pandemic when the ads were cheap to buy. In delivering their message to a high number of people, their performance marketing was also more effective due to increased brand familiarity and demand for their product. All this led them to be named “one of the fastest growing and highest valued project management software”, rapidly muscling in with an 8% market share

Make this year more efficient with

If you’re looking to continue investing in demand gen, brand and long term growth throughout an uncertain economy, drop us a line to chat about how we can help you reach their objectives. 




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