by Lee Dussinger
While the headline hasn’t been printed just yet, America’s smart money almost unanimously agrees that a slowdown is occurring. As the end of 2022 creeps towards us, the experts estimate that an economic downturn will be upon us soon. As a marketer, this means your strategies must adapt for shallow consumer pockets. When formulating a recession marketing strategy, it’s important to identify where you are now and what you can expect – and then start working to implement your ideas. One of the best ways to find your way, is to learn from those who’ve been here before and succeeded. To find inspiration, we’re breaking down recession marketing from the Great Recession of 2008!
Before we dive into the research, recommendations, and thought experiments, let’s establish a key tenet: marketing in a recession is even more challenging. However, a smart playbook, a strong brand, and a well-formulated plan can keep you afloat. In fact, if you invest precisely and execute well, you can even gain ground while other brands are forced to retreat. Let’s explore the fundamentals of the strategy, some market-tested examples – as well as the type of marketing investments that protect your market share now and build the foundation for future success.
Explore 3 Successful Recession Marketing Strategies
In a recession, reduced consumer spending slows growth for the vast majority of businesses. The worst thing to do about it is nothing. You can’t take your standard marketing playbook and hope to apply it – sans changes – to the market conditions of a recession. Things will be different. Whether this is a gold rush of potential for your business or a storm to be weathered, you need to expect change. Successfully marketing or advertising in a recession requires investigation and adaptation. Let’s find our footing by analyzing which markets are best set to survive and thrive. To give us real world insight, we’re exploring recession marketing examples from the Great Recession of 2008.
When looking at who does well at marketing during a recession, we’ve identified the 3 E’s – Essentials, Escapes, and Established Brands.
Essentials: Growth Remains Slow & Steady
By definition, Essentials have demand…regardless of an economic slowdown. Even with belts tightened, these sectors steadily chug along. The worst case scenario for these industries often looks like slower than average year-over-year growth. Healthcare is perhaps the ultimate example of a need – not a want. Thus, few sectors (if any) are better primed to maintain a consistent message and weather a recession with ease.
For grocery stores, the money that is not being spent on restaurants and takeout is their victory. Grocery brands advertising in a recession find success rolling out messaging that highlights value and quality. One of our favorite recession case studies is when Target debuted the tagline, “Expect More, Pay Less” – and subsequently saw 30% growth of their Archer Farms grocery line. Discover how Target creates a cohesive brand experience.
Takeaway: If you’re guiding a brand that qualifies as an Essential, this period will still feel turbulent. You have work to do building a recession marketing strategy that gains customers, but you have a head start.
Escape Industries: Ready to Take Advantage
Financial hardship brings stress – in a recession, agonizing over finances becomes the norm. Getting a break from it all is more welcome than ever. It may sound simple – but statistics from the last recession prove it – Americans will pay to take a breather from their stress. Those diversions can look like a gin and tonic after dinner, a candy bar, delving into a fictional universe, or countless other forms of escapism. While these sectors share little in common traditionally, they are often connected during conversations on marketing in a recession.
The growth of “escapism” is less the result of deliberate advertising in a recession and more a case of outward forces guiding consumer behavior. The growth trajectory can resemble a medium-sized bump compared to average trends. Of course, sometimes the increase can be meteoric, as was the case with Activision’s 2008 growth. Desire for escapism certainly contributed to the game developer’s performance – not to mention the releases of two best-selling titles: Guitar Hero 3 and Call of Duty: Modern Warfare!
Takeaway: If you’re in one of these Escape industries – and your brand message resonates with your audience – a recession can usher in a period of opportunity.
Established Brands: Able to Survive Any Challenge
Times may be tight, but a beloved brand still holds enormous sway. While Essentials come first and Escapes take on new prominence for many, the brands people love never leave. When consumers have less money, they spend where they feel an emotional connection. That’s what a brand is – a company’s beliefs, visions, imagery, and the way it makes people feel. There are countless cases, but let’s consider the example of Coca-Cola during the last recession.
Soft drinks are the definition of a want, not a need. However, more bottles and cans of Coke were consumed in 2009 than any other year in history up to that point. Why? Because, backed by their Open Happiness campaign, the Coca-Cola brand represented joy. That was something people wanted more than ever. Americans bought more Coca-Cola that year and throughout the recession for the same reason they bought it every year – because the brand spoke to them. It was more than carbonated water, sugar, caramel coloring, and caffeine – it was happiness.
Takeaway: For a plurality of businesses, the most potent recession marketing strategy is to have – or to build – a brand that means something personal to their customer base.
When Marketing in a Recession, Bet on Brand
Though they are enviable in a looming downturn, Escapes and Essentials only represent a minor fraction of businesses. The overwhelming majority of companies don’t occupy those spaces and never will. Don’t despair, though, because almost any business can craft a brand that inspires their audience – beyond just what their product offers them. If you have a strong identity, brand marketing in a recession can pay huge dividends.
So, is that where you are? Do customers know your values and vision? Does your brand resonate with your customers beyond the simple transaction?
Adjusting your marketing during a recession is the perfect opportunity to invest in brand building like never before. Here are 4 reasons why an economic downturn can be the ideal inception point for companies that have left brand on the back burner:
- More Room for Your Brand – While marketing thought leaders advise against slashing budgets to save short-term capital, it happens without fail. Across most sectors and platforms, paid and organic advertising in a recession decreases. That’s to your benefit because there is more room than ever for your brand story. If your competitors back off, you can seize their space – for a reduced investment. On paid platforms, count on a discount on your cost for impressions AND fewer competitors taking up room. In the content space and on social media channels, you can expect less noise competing for audience attention as other marketing departments may be trimmed.
- Your Audience is Paying Attention – Coupled with this relative marketing drought, people are more apt to receive your message. Think about the beginning months of COVID lockdowns – Americans spent less money and less time outside the home. Media filled the entertainment void. You can expect a similar experience during a widespread financial slowdown. Before, dinner, drinks, and events were the primary source of entertainment. Now, cheaper alternatives in the form of streaming platforms and scrolling on social media take center stage. The right marketing strategy during a recession will take advantage of this.
- Doing More with Less – Although scaling back marketing in a major way is a mistake, doing more with less is a maxim to follow. When pursued properly, that often looks like fewer campaigns and reduced focus on performance marketing. Performance marketing is most successful during a period of high consumer spending. So, rather than paying a premium to directly acquire single customers (who are more elusive), you can invest in creating a rich brand experience. An example of this, working in real-time is Airbnb. With an expanded focus on brand marketing, their 2022 Q3 report showed their strongest quarter ever!
- Brand Works Now and Later – Redirecting focus from strictly performance campaigns is smart tactics. Rather than paying to acquire a one-time interaction, you invest in a foundation for the future. That doesn’t mean that you sacrifice the present, however. Consider that perfectly-timed brand messaging enabled Coca-Cola to sell more soda than at any point in human history during the Great Recession.
Align Your Marketing with Opal
The reason that we at Opal place such a focus on brand marketing is that we have a front-row seat to its effectiveness. Leading international brands like Target, Activision, Microsoft, Rothy’s Starbucks, and countless others trust the Opal Platform to plan and visualize their marketing efforts. If you’re considering a focus on brand marketing in a recession, this may be the right time to adopt strategies from these leading brands and discover why they rely on Opal.
Opal is the marketing planning platform built for marketers. What sets Opal apart from other organization tools is the focus on experiencing your brand through the eyes of your audience. In practice, that means your entire team has the opportunity to see and collaborate on true-to-life content previews. Your team will work more efficiently, collaborate better, and never let off-brand messaging reach your audience.