Marketing in a Recession: Advertising and Branding During an Economic Downturn - July 2024

Marketing in a Recession: Advertising and Branding During an Economic Downturn

July 2024

In terms of economic conditions, 2024 has been rather bad. So, there’s
an impending recession. Or it’s already begun. Or we’re in the thick of it.
Whatever the case, there’s a lot of unknown – especially for those responsible
for marketing their business.

The cost of living problem, inflation, and rumblings of a recession have
been occupying consumers' minds (and the media) for months now.

When economic activity slows down and a recession sets in, many
businesses quickly cut back on their marketing and advertising expenditures.
However, advertising during a downturn gives businesses a chance to gain market
share and raise brand awareness. When the economy improves, this might yield
enormous returns.

Budget cuts are sometimes unavoidable. If you know you need to make
spending adjustments, make sure you're lowering expenses where they matter
most.

While pulling back on media spending may seem like the obvious way to
cut costs and hit financial targets, the benefit can be relatively low. A
Nielsen study of media plans found that only 25% of channel-level investments were too high to maximize ROI, and within this group, the median overspend amount was 32%. And while reducing spend would improve channel ROI by a modest 4%, brands would also see significantly reduced sales volume due to a drop in ad-driven sales.

Whatever your choice for the media mix and budget distribution, keep in
mind that spending any money is better than spending none at all. When a brand
goes off-air, Nielsen estimates that it will lose 2% of its long-term income
every quarter and that it will take them three to five years to make up for any
equity losses that resulted from that downtime when they resume media efforts.
Reducing your media spend won't just hurt your financial line, though;
according to Nielsen data, marketing makes up 10%–35% of a brand's equity.

Why You Should Keep Advertising During a Recession

Keeping up with, or even raising, your marketing spend in lean times
presents a number of chances to turn a profit quickly and expand as the economy
improves. In the knowledge that: during a recession, we frequently advise
brands to keep their advertising spending in place.

Advertising Costs Drop During Recessions

During a recession, you might get more bang for your buck! Recession
advertising costs are typically lower than in peak economic conditions, with
media prices declining along with demand. For examples during the big 2008
recession, ad spend decreased across all media markets:

This creates an opportunity to maintain or even increase ad spend on
proven channels. Some brands find success expanding on new channels or
targeting secondary audiences.  

Your Messaging is More Impactful

With ad spend down, most product categories have less “noise.” Fewer
competing narratives, product launches and campaigns can make your advertising
more memorable.

Some brands find success making big product or service announcements
during a recession. For example,  Amazon successfully launched the Kindle during some of
the most challenging days of the Great Recession in 2009.

Advertising Communicates Value to Customers

Marketing can also support a changing business strategy during a
recession, which often involves adjusting prices. Effective advertising can
help brands that adopt short-term pricing changes reach customers effectively,
capture market share and encourage long-term customer loyalty.

What Happens When Brands Keep Marketing Through a Recession?

There’s historical evidence that brands that continue to market during a
recession tend to recover more quickly and grow faster when the economy
rebounds. These recession marketing examples illustrate the lasting benefits of
spending when others put their wallets away.

Kellogg vs. Post in The Depression

In the 1920s, Michigan-based cereal company Kellogg was a relative
upstart behind the industry’s most successful brand, Post. As the Depression
worsened, Post made significant cuts to its marketing budget. In response,
Kellogg more than doubled its print and radio spending, including relying
heavily on radio spots to launch its newest creation, Rice Krispies.

Kellogg’s profits increased 30% and surpassed Post as an
industry leader – a title it has held for nearly 100 years.

Today print is less useful with a much smaller reach - and that is where
Digital Outdoor Billboards come into play.

McDonald’s in the 90s

During the 1990 recession, McDonald’s cut ad spend to save money and
ride it out. Two of its fledgling competitors, Taco Bell and Pizza Hut, kept
spending steady across advertising and promotional efforts. When the economy
recovered, Pizza Hut’s sales increased by 61%, with Taco Bell improving revenue
by 40%. McDonald’s saw sales decline by 28%.

It was a lesson Ronald McDonald wouldn’t let the execs forget. The brand
was one of the few companies that grew during the 2008 recession, benefiting
from its value-focused menu at a time when families needed affordable fare. The
company grew in 2008, with sales exceeding both 2006 and 2007, before the financial impact
was felt worldwide.

How to Market During a Recession

Marketing during an economic downturn requires brands to leverage all
available channels effectively. There’s no universal recession playbook for
marketers. You’ll need to utilize SEO, social media and other sales channels such
as Out of Home (OOH) - to stay in front of existing customers and get your
message out to potential new clients.  Working with MAD Media will allow
your brand the ability to use MAD’s digital out of home channels to push messaging
and content quickly to your clients and prospects.

Don’t Forget About SEO During a Recession

Please don’t give up on your SEO ground game. Search engine optimization
can position your products or services in front of customers based on changing
needs. Always use rigorous keyword research to identify shifts in search terms
and trends. You’ll likely find an increase in search queries like:

Recessions don’t last forever, so use the time to conduct a content gap analysis to better position your brand against competitors on valuable keywords and topics. This can help you
capture more total keywords and rank higher on the

Love The One(s) You’re With

Both B2B and B2C brands should prioritize existing customers. During a
recession, everyone feels the pinch. It’s an ideal time to offer existing
clients and customers extra value with more competitive pricing, bundles and
incentives to make long-term commitments, such as annual contracts or
agreements. New customer acquisition is 5 to 25 times more expensive than retaining an existing customer; it’s a great time to nurture those relationships.

Up Your Marketing Efforts

Marketing delivers content to customers that may well have an interest in
what you do.

Branding During a Recession

Your brand is a long-term investment and shouldn’t be tied to a single
product or your bottom line. Working within your brand’s existing identity,
think of how to meet your customer’s needs when they’re counting on you.

Get your leadership team together and take a deep dive into what your brand stands for.

Do What You Do Best

Companies are often forced to downsize during recessions. Most
recessions usually see (and are sometimes defined by) notable increases in
unemployment, which means businesses start slowing hiring and operating with
fewer resources. Outsourcing certain marketing operations to experts will help guide
you through a recession marketing strategy.

The Sky Isn’t Falling; We’ve Got Your Back

For over seven years , MAD Media  has helped clients from every industry survive and thrive – we all experienced the COVID-19 pandemic together.

Count on our team to solve your most pressing marketing challenges.

Get in touch today call  0800 2 GO MAD to get started.