Why brands shouldn’t go dark during a recession

By Michael Bush, Managing Director of digital marketing agency, Climb Online

Amid headlines of a looming recession in the UK, consumers and businesses are likely to start making cutbacks in spend. The kneejerk reaction from many businesses is to begin pulling funding wherever they can, and in these circumstances, marketing and advertising are often the first to feel the pinch. For example, during the 2008 recession, the US saw a reported 13% drop in advertising spend.

While the instinct may be to pull funding from these areas, it is important to remember that advertising and marketing are core components of a smart business strategy. Maintaining these core components is vital to the longevity of your brand both during and after a recession, and the only way to ensure your business remains visible is to continue investing in marketing.

Share of the market and share of the voice

Any good marketer knows, marketing and advertising is not simply about getting people to buy your product or service, it’s about establishing and positioning your brand as the “go-to” – the authority within your industry or sector.

The adage “out of sight, out of mind” is particularly pertinent when it comes to marketing. By “going dark” during an economic downturn, you are essentially reducing the exposure and coverage of your brand, causing long-term damage, and increasing the chance of your customers going elsewhere or simply forgetting about you. This is backed by evidence, with a study from Millward Brown finding that during the 2008 recession, 60% of the brands that “went dark” experienced their brand use decrease by 24%.

There are multiple benefits of continuing to market and advertise during a recession. By doing so, you safeguard against fickle sections of your consumer base simply forgetting about you, while also giving your brand an air of stability and longevity.

Consistent, strong and targeted marketing allows you to carve out a bigger share of voice, and share of the market, enabling your brand to stand out while those that reduce spending in these areas suffer a loss of the market share.

Long-term and short-term sales

It is not only brand awareness that is affected by an absence of marketing efforts during an economic downturn, but your bottom line, too. Research from McGraw-Hill during the downturn of the 1980s in the US, which studied 600 B2B firms, found those who maintained or even increased their marketing and advertising efforts averaged significantly higher sales. Surprisingly, these higher sales were not only after the recession had ended, but also during it. Conversely, the study found that those companies who stopped or reduced their spend saw sales flatline, with only a slight increase over the subsequent 3 years.

Similarly, during the 1990 recession, both Pizza Hut and Taco Bell invested heavily into their marketing efforts, increasing sales by 61% and 40% respectively. With this in mind, it is important to remember that though a recession means less cash is being spent, spending itself does not grind to a halt, making it crucial that your brand is front and centre when purchasing decisions are being made, especially when your competitors may have gone dark.

Marketing in a downturn

Marketing and advertising efforts during a recession need to be smart, strategic and laser-focused. Businesses that carefully analyse their marketing budgets and adjust their tactics in response to shifting demand are far more likely to see positives results both during and after a downturn.

Concentrating marketing resources on reinforcing the core brand proposition and maintaining relevance to the core customer is key. While continuing to invest in marketing is important, simply throwing money at these activities without taking the time to analyse the platforms and strategies available is not advisable. Analyse the data from previous campaigns, and use the insights this generates to guide your marketing efforts.

Digital marketing and online advertising are particularly useful, as they allow for cheap and highly targeted campaigns, with performance metrics that can be easily measured, while generating insightful information. Given the ability to precisely target audiences, and the relative affordability of such campaigns, it is unsurprising that during the 2008 recession, marketers spent 14% more on online ads compared with the previous year, according to the Harvard Business Review.

Final thoughts

When a recession hits and money is tight, it is natural for businesses to looks for ways of cutting costs. However, cleaving away at marketing and advertising spend can have detrimental consequences both in the short term and after the economy starts to pick back up. It is crucial for brands to continue marketing, advertising, and letting the world know they are still open for business. As the popular industry quote goes: “When times are good you should advertise, but when times are bad you must advertise”.