What should an advertiser or marketer do during a recession… or inflation… or stagflation?
Having navigated my clients through 5 recessions/stagflation and the historic Jimmy Carter 14% inflation rates… and 20% interest rates… I have some perspective.
I even have a strategy of hope and good news.
Obviously, history gives an indication of what is best and what is not. That’s why you should always look at the history of advertising and marketing in times of economic stress.
I can tell you that history gives a good roadmap to the future for companies to survive and prosper during economic uncertainties.
Business owners usually cut their marketing and advertising first, to save money and cut expenses.
Is this the right strategy?
Here are just a few of the historical stats to help guide you:
- 265% sales increase for companies that maintained or increased their ad budget during a recession or stagflationA McGraw Hill Research study of recession marketing revealed that “companies who continued to advertise during the two-year recession saw 256% higher sales than their competitor’s post-recession. Those who chose not to advertise during an economic slump saw virtually 0% market share increase and a rise in sales of only 18% once the economy regained traction.”
- 5 times market share growth by increasing their budget during a recessionIn the last recession, only 18% of companies increased their marketing. But as a result, their market share growth outpaced other businesses by 2.5 times.
- 9% increased their sales during and after a recession by increasing their advertising and marketing budgetHarvard Business reveals that out of 4,700 companies in the 2008-2009 recession: 17% went into bankruptcy or were acquired, 80% slowly recovered, but it took more than 3 years to recover after the recession ended. But 9% grew during and after the recession and then increased their ad budgets.
- 3 years head start in growth and market domination by increasing their budget
Frankenberger and Graham (1976-1991) research: firms that advertised during a recession increased sales, during and after, helping give a head start in recovery and sector domination for up to 3 years after the recession.
During the 2023 inflationary time with recession/stagflation impacting both B2C and B2B buying, all of your marketing and advertising copy for digital ads, landing pages, pre-roll, direct mail, video, and TV, everything should have changed to reflect and take advantage of the different and new economic environment.
If not, you suffer a drop in response.
And a new plan should be developed now to move ahead and market properly.
Don’t give up out of fear.
Do it right.
Waiting will only result in lost time and money and allow competitors to move ahead.
The current recession or stagflation economy is likely to last 6-12 months… and over 2% inflation much longer. That means changes to your prospects, perception, and buying budgets.
My team is here to help if you need guidance and speed in being able to navigate the recession/inflation/stagflation and catching the recovery so you can dominate your market.
Now is the time to be prepared for the new realities ahead.
To be able to help move your market and advertising plan with efficiency and effectiveness, give Michael a call at 615-933-4647 or email him at [email protected].
