The incoming cost of living crisis is set to be a bigger threat to businesses than the pandemic. Rising energy, food prices, petrol and the highest inflation in more than 40 years are affecting all of us in some way. When it comes to business, the marketing budget is often one of the first to be cut when an economic downturn hits. To those in the industry, this is very frustrating. Marketing is often seen as a discretionary expense, difficult to track and justify especially when a particularly good marketing strategy and expenditure is likely to be quite high.
This way of thinking is outdated and ultimately flawed. If businesses can keep marketing sustained during a recession, there are opportunities for brand growth during and after the economic downturn. This is good news for marketers.
Cost of Living Increases Force Businesses To Lower BudgetsThe biggest challenge for all marketing businesses over the next few months will be brands cutting their marketing spend. There are many factors at play here, including a government campaign earlier in the year to ask brands to cut their marketing expenditure. It is well known that consumers believe cutting marketing costs is the best thing to do when face with a crisis. The government directive played up to this. What is for sure is that consumers believe that cutting marketing expenditure to drive prices down is exactly what brands should be doing. Obviously, this could have a huge impact on marketers.
Customer Confidence CrisisAs we head further into the cost-of-living crisis, customers perceptions of their own financial situations are worsening. The lower the level of consumer confidence, the less likely people are to spend money on non-essential items. This leads to a dip in economic activity and when people begin to be more careful in spending, the resulting drop in sales creates a drop in advertising ROI compared to before. This is why bosses look at marketing and advertising as the first place to cut back spend. Marketers should both be investing carefully in their own brands, and advising their clients to do the same.
Businesses should be looking at reviewing all their spending during a recession. But when it comes to advertising and marketing, drastic cuts aren't the answer. You should look at filling gaps in the ad market rather than dropping out of it. When other businesses cut spend entirely, the whole market becomes less competitive leaving you ad platform space to fill!
- Reallocating your spend in this way means you can increase the return on investment by using platforms likely to give you better results
- If you aren't targeting your recession marketing, you are wasting money
- Optimising PPC and paid campaigns are an excellent way to get measurable results
- Paid search campaigns help you target customers who've already started the buying journey (more likely to buy!)
- By using programmatic advertising, you can make this easier
Recession Can Be Managed With Good MarketingHistorically, businesses that continued to invest in their advertising saw more growth than those who didn't. Keeping up regular communication shows genuine interest and care for your clients. It also strengthens client connection. With digital marketing, there is also an expectation that a brand should share its purpose clearly, and include strong social responsibility communications to clients and employees.
- Build new strategies
- Think outside of the box
- Invest in ideas that will provide the lifeline your business need
Do you want to stay ahead of the digital marketing curve? Do you want to further your career? If so, it could be beneficial to check out a digital marketing podcast in your free time. Digital marketing podcasts are useful, fun and free, and listening to just one a week could help you to advance your career. However there are lots of digital marketing podcasts out there, so it can be difficult to decide which one to listen to. Thankfully we are here to help; here are 5 interesting digital marketing podcasts that could further your career.