With a recession looking likely in 2023, organisations need to find opportunity in the complexity.
How can you make sure your marketing in a recession is effective?
Economists are predicting recessions in 2023 across the globe. The Organisation for Economic Co-operation and Development (OECD) has said that the UK in particular is one of the weakest performers out of the world economic leaders and that growth in 2023 is likely to be slow and low.
This type of news rarely sits well with marketing teams, because they know that marketing in a recession often means cost-cutting and spend slicing as companies set out to stabilise their foundations before the financial waves hit. And the waves do hit – the 2008 recession saw unemployment reach its highest levels since 1995, and many companies closed their doors in 2020 thanks to the pandemic.
On a more positive note, many more companies were started during these times as well, because they were built on the foundations of opportunity.
A recession is challenging to navigate and difficult to operate through, but it can also be a great chance for businesses to sharpen its focus. There can be some great opportunities for marketing in a recession, if you know how to be efficient with your budgets.
Marketing an invaluable ally
Marketing budgets are often one of the first to be cut in a downturn. The problem is, this can be counterproductive. A paper published in the Journal of Advertising Research looked back at the recessions over the past 100 years and how these impacted changes in advertising expenditure and gross domestic product (GDP). The paper found two very interesting facts – recessions are getting shorter, and cutting back on marketing in a recession can hurt sales during and after the recession, without generating any substantial increase in profits.
Put simply, cutbacks can lose the company capital.
The same paper also discovered that companies with ongoing advertising and marketing strategies during a recession saw positive benefits for several years afterwards.
This finding was also reflected in a Mcgraw-Hill study that assessed organisational performance from 1980 to 1985. The study found that companies paying attention to marketing in a recession had higher sales after the economy recovered. And, those with intent and focus saw sales as high as 256% more than those who had stopped advertising or cut budgets.
This doesn’t mean that companies should throw everything at marketing in a recession, what it does mean is that it’s worth pausing before cutting costs and taking a detailed looking at every area of your marketing. It can be an ally to the business rather than a cost centre.
An opportunity in the complexity
It isn’t any fun marketing in a recession. Companies who have already run the gauntlet in 2008 and 2020 won’t be thrilled with the idea of another period of complexity and uncertainty.
Innovative Marketing & Procurement teams can quickly reframe the challenges and instead look at the next few years as an opportunity to really refine the brand and its marketing approaches. To sharpen focus on what is important and what is not. To really dig down into whether or not a particular campaign or strategy is going to deliver what the brand really needs right now, and how every dollar can be used to drive you closer to your business objectives.
The first opportunity lies in getting granular – looking at agency costs and campaign expectations and marketing plans and asking if they are relevant and delivering to your metrics. You need hard data that allows you to make informed decisions about costs and markets so you can save money intelligently.
Instead of cutting budgets use insights to streamline expenditure and refine agency fees to save money that can be funnelled back into the business. RightSpend has saved customers significant amounts of money, on average 20%, with data covering 75 markets and 10 different agency disciplines. This allows companies to benchmark their costs and make informed decisions that align with their expectations and budgets.
This visibility into costs means you don’t necessarily need to cut budgets, just cut out any expenses that aren’t serving you. The key is to get the best efficiencies from your marketing budget so you can capitalise on your marketing, get more for your investment and have an even greater impact. Your CFOs will thank you.
Transform tomorrow without compromising on today
Technology, data, insights are all transforming how marketing procurement teams approach their costs and marketing in a recession. With access to details that can refine your expenditure and approaches, you can use technology to avoid cost wastage. Instead you can reinvigorate your marketing plans without compromising on quality or reach.
Find out how RightSpend can put the technology that you need at your fingertips so you can go further in a recession, not drop behind.