Advertising can be the key to your brand’s success but what happens with consumer behavior in a recession? Learn more about how a key strategy can change everything.
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How Advertising During A Recession Can Preserve Your Brand

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By Janine Pollack

Director, Integrated Marketing


COVID-19 has fundamentally changed the way we live our lives, from working-from-home to social distancing to hoarding toilet paper. As businesses struggle to maintain connections with consumers, they need to tread lightly—this is not the time to appear opportunistic or insensitive. That’s why brands are pulling ads that convey something different than they did a few weeks ago. People aren’t interested in seeing KFC commercials that feature restaurant-goers licking their fingers. And Coors’ March Madness campaign, “The Official Beer of Working Remotely,” went from being a cheeky nod to staying home and watching the games to being perceived as either taking advantage or not taking health recommendations seriously. Even Hershey’s ads that feature people simply shaking hands and hugging were pulled. 

But in this economic downturn, businesses go on. People need gas and WiFi and veggies and yes, toilet paper. What’s a brand to do? Turns out, there’s a lot. Louis Vuitton just announced that they’re going to halt perfume production and start making sanitizer. Restaurants are closing their dining rooms and going all takeout, and supermarkets are shortening hours and allowing specific times for shoppers 60+. 

Consumers have high expectations of brands in a time of crisis and have already begun to react to brand messaging around coronavirus. Thankfully, there are some tried-and-true ways that brands can advertise, and thrive, during a recession.

It’s hard to stay calm when a recession hits, but brands that continue advertising and marketing during a recession will fair best.  

When and if a recession hits, the best course of action is protecting your investment.  Brands that safeguard the hard-earned equity won in their marketing and brand campaigns will preserve the foundation they need to grow and rebound.  If companies cut deeply into advertising and communications budgets in a down period, the cost to regain share of voice in the market once the economy turns may cost four or five times as much as the cuts saved. 

Although a large majority—74%—of U.S. business economists appear to believe a slowing economy will tip into recession in 2021, reacting fast and slashing advertising budgets can make things worse. Resist.

In every recession, marketers find themselves in poorly charted waters because no two downturns are exactly alike.  Of course, companies need to control spending but failing to support brands can undermine revenue goals.  The better strategy is to go all in to understand customer needs and respond accordingly with tailored messaging across channels.  The way to do this is through data, then layering these insights with the human element to get a deeper understanding of how target audiences will respond.

A recent MNI 24/7 research study surveying business leaders in the summer of 2019 indicated that respondents appreciate useful and relevant advertising that appears in the media they use.

  • 80% agreed with the statement “I will seek more information about an ad that I find interesting.”
  • 79% agreed that “advertising helps me learn about new products.”
  • 74% of those surveyed “appreciate advertising that is relevant to me.”

For example, will your consumers pull in all discretionary spending?  Will they forgo luxuries like travel and a new car?  If they decide to spend, how will they decide when and where to do so? Who will be their influencers?  Taking time to learn about targets will inform how best to respond and meet their needs.  This is how brands will gain trust and loyalty. 


How Consumer Behavior Changes in A Recession

When market indicators start sending up warning flares, chances are people are going to start running for cover. This is especially true for those who have been hit before and saw earnings and retirement accounts take a significant hit, or, in the case of Gen Z, watched their parents endure the fiscal implications of the last recession.  Been there, done that—no one wants to be burned once, much less twice, by a recession. The wave of bad economic news is eroding confidence and likely buying power, driving consumers to adjust their behavior.

According to the Harvard Business Review, regardless of which group consumers belong to, they prioritize consumption by sorting products and services into four categories:

  • Essentials are necessary for survival or perceived as central to well-being.
  • Treats are indulgences whose immediate purchase is considered justifiable.
  • Postponables are needed or desired items whose purchase can be reasonably put off.
  • Expendables are perceived as unnecessary or unjustifiable.

Beyond this, marketers should factor in a psychological overlay to their segmentation strategy.  Are targets going to simply hold off on any incremental purchases because they’re worried about rent?  Or are they relatively secure, but cautious? According to a study conducted on the effects of going dark (cutting back on marketing and media spend to the extent that it’s nearly non-existent) by ThinkVine, a Cincinnati-based analytics company, it was found that by the end of the year of going dark, firms saw sales drop by 20%.


5 Tips to Maintaining Your Brand in a Recession


1. Tailor brand voice to your target audience.

Value is an important message to build into marketing campaigns during a downturn.  Don’t ignore the fact that people are feeling wary—personally and professionally—let them know why your brand provides value but don’t be a Debbie Downer.  This is how you’ll maintain consumer loyalty and brand equity and keep the revenue stream flowing. Talk about what consumers will get for their money. 

Luxury businesses should take a different approach, appealing more to emotion, and emphasizing the need for some emotional release or comfort.  Give permission. And convey the long-term value—for example, a watch is a timeless investment that provides enduring value.  

The 2008 recession saw car manufacturers focusing less on big and bold ideas and more on miles per gallon, to appeal to consumers’ frugality.  Focusing on prices and temporary discounts can be depressing and risky, but promoting a sense of community and a “we’re-in-this-together” approach shows an awareness and sensitivity that earns trust.


2. Rediscover the brand. 

A recession can be an opportunity disguised as a problem.

Think about your brand essence.  What is that you offer and what makes you different from the others? How can you help people celebrate and contribute?  A recession can be an opportunity disguised as a problem. You can position the brand as an ally to consumers in tough times, with product development or sponsorship programs, so the consumer can say your brand is committed to them.

Brands like Honey Baked Ham permit you to celebrate. Its 12 Days of Christmas celebration features in-store offers, prizes, and giveaways, and is a way to gift its consumers.  It gives a sense of community, caring, and celebration that is consistent with its brand authenticity.  


3. Refocus on brand trust.

If sales are declining think of another way to inspire a purchase. The one thing you don’t want to do is penalize consumers by raising prices.  Loyalty programs should reward not just big, one-time spenders but also people who purchase small amounts frequently. Use data to send targeted messaging.

Travel destinations may want to target Boomers, for example, and smart advertising can reassure them about the dividends, fiscal and otherwise, they’ll feel from prioritizing quality time together and with their families.  Remember that most people have influencers, ranging from friends to grandchildren, so be tactical when deploying messaging.  Determine who you’re reaching and craft messaging accordingly.

Some brands may want to raise the profile of the causes they promote.  This is certainly a way to further the emotional connection.  A Subaru “Share the Love” campaign, for example, has resulted in more than $140 million in donations to national charities—and over 1,170 hometown charities—by asking their clients where they would like to direct a donation.

Continue to Innovate – Apple

In 2003, when the Dow was at historical lows over a 10-year period, Apple continued to invest. When asked why he hadn’t reduced research development spending when others in the industry had experienced a slowdown, Steve Jobs shared, “What has happened in technology over the last few years has been about the downturn, not the future of technology.  A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path.  Our belief was that if we kept putting great products in front of [customers], they would continue to open their wallets.  And that’s what we’ve done.“ 


4. Stay balanced. Be smart.

Maintain (or even increase) your marketing spends, but ensure you have the data to back your investment. Be vigilant in your metrics tracking and reporting. Make sure you’re leveraging technology to inform strategies that isolate that single user ID.  Give the data the attention it deserves, share insights with the broader team, and stay agile so you can adapt plans to reflect what you’re seeing. From there, brands can make messaging personal.

Keeping a level head and committing to a long-term marketing strategy can help you flourish in the down cycle and be fully prepared to capitalize on the upswing.  


5. Don’t Overreact to Temporary Downturns

Brands of all sizes across every industry need to prove the ROI of their campaigns.  Reaching not only the right people but reaching them at the right place, at the right time, and in the right mindset to complete a pre-determined desired action is our business.  This is the reason why we thrive and will continue to thrive as budgets tighten, and the landscape becomes more diverse. 

Give people good things to talk about by continuing to have good products and great communication. The biggest lesson is that recessions come and go, and although the sting can last, be careful how you react. There are things you can do to keep your brand in business for the long haul.

(Source: Leveraging Advertising Expenditures in a Challenging Economic Environment).

The worst thing you can do from a marketing perspective is to go dark.  If you must cut, be careful and get creative. Consider shifting messaging from product to brand, for example, and go for the halo effect. Take a brand like, “Hood.” These brands are true members of the community, which serves as an opportune time to reinforce this legacy and commitment. 

Keep sales during a recession

How To Build A Data Strategy
For Your Brand

Set Clear Goals

Once you know where you want to go, it’s much easier to determine the KPIs to ensure you’re on the path to success. Is the campaign goal awareness, site traffic, engagement, online sales, lead generation, or in-store traffic? In most situations, there will be more than one goal, and that means there will also be more than one KPI. Your agency partners should help you figure out if you’ve got them right and if you’re missing any.

This collaborative approach also ensures you’re on the same page, since you’ll be optimizing and monitoring these KPIs closely.

Stay the Course

Once you’ve decided what your campaign goals are and how you’re going to measure them, the next important step is to STICK TO THEM. If you’re getting great engagement on your sales-focused campaign, don’t change your goal! Figure out what’s working and what isn’t and adjust so you’re maximizing sales.

Understand Your Customer’s Journey

The best way to gain insight into prospects is to use data intelligence to formulate a strategic, integrated, multichannel campaign at each stage of the customer lifecycle.  The goal here is to create actionable customer interaction profiles to target and drive pertinent messaging offers, and have these tailored to push them through the right channel.

Create the Integrated Environment that Supports Goals

Multichannel marketing campaigns optimize revenue performance at the right time, with the right offer, to the right customer.

MNI Targeted Media is a new breed of data-centric advertising firm that prides itself on innovative digital strategies and thought leadership. MNI streamlines media buying, creative messaging, and analysis to generate scalable cross-platform advertising campaigns that make an impression. We believe in the power of fueling innovation through insights and are driven to know more and do more every day. MNI has been building successful advertising campaigns for candidates, advocacy groups, non-profits, and more, for over 50 years.

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