When the Market is a Mess, the Best Brands Get to Work
There’s a lot of talk these days about recession: Are we in one? Is there one on the horizon? What even is a recession anymore? All of that talk has amounted to one universal conclusion: No one has any idea.
We do know two things for certain:
- Recessions happen every 7-10 years
- We can learn from the past
Given that we’re all here to talk about digital business and digital marketing, let’s take a look at what we should expect, starting with the obvious:
“The first thing that happens when you go into a recession is a lot of publicly traded firms cut their marketing budget”
— Steve Grant, SVP of human intelligence at Horizon Media (source)
That seems logical, right? When cash is tight, line items like advertising, promotions, and even content production are some of the easiest to cut. However, a study conducted by marketing consultancy Engagement Labs after the 2008 recession illustrated this point: Both financial and auto brands that made moderate or greater cutbacks to ad spending saw a drop in net sentiment about their brands, while brands that maintained their spending did not.
While it may make sense to trim some of that ad budget, the impact (at least for the studied brands) was that people’s opinions of them suffered at the very time they needed good vibes the most.
But studies like that typically look at the biggest advertisers – the ones who will be notably absent when they don’t show up at the big game or in the pages of your favourite magazine. What about smaller brands? Certainly no one would miss us if we chose to hit pause on our marketing activities, right?
The folks at Horizon media also looked at up-and-coming brands and came up with the following:
“Challenger brands, if they’re aggressive with their spend and targeted with the messaging and activation strategies that they take, this is the time that [they] can make some headway against overcautious, dominant incumbents.”
One example they called out was Netflix. Yes, they’re one of the world’s biggest companies now, but back in 2008, Netflix was a tiny startup that mailed DVDs to customers’ homes. No one was taking them seriously, least of which the big incumbent at the time, Blockbuster.
Through well-targeted advertising, Netflix used the bear market to gain significant traction, which propelled them to a previously impossible position as market leader in the years to come. (Read more about Netflix flipping Blockbuster here).
But this isn’t 2008, and we’re not Netflix.
There are some distinctly 2022 opportunities out there. Here are a few worth looking into:
- Organic keyword competition
We’ve already seen a significant drop in content marketing activity in many industries, which means keywords that may have been all but impossible to target will start to ease up in the coming months. Read more here.
- Pinterest advertising
Interest and activity on Pinterest is as strong as ever right now, but when advertisers cut budget, the 3rd or 4th channel that they use is the easiest to lose. Expect to see some significantly reduced ad rates on Pinterest.
- Content creator partnerships
According to a recent survey, demand for influencer marketing is off as much as 40% from its peak. While that may be partially the result of a bubble, it means a lot of top quality creators with highly committed audiences may have entered your price range.
Of course we should take any marketing investment advice from a marketing agency with a grain of salt, but this quote about content marketing in particular stood out from the rest:
“There is evidence – quite a lot of evidence from the brand-building world – that the brands that cut back too much might leave that recession later and in a worse position than brands that maintain their spend.”
— Tom Roach, VP of Brand Planning at Jellyfish (source)
Of course we all need to take care of our finances in the near term, but take this as your data-backed encouragement to do what you can to defend the parts of your digital strategy that are driving the most progress, because if you can, markets like this one can be a significant opportunity for those who keep showing up for their audiences.