Obstacle to Opportunity: How data-driven marketers can navigate a recession

For marketers, navigating the rough roads of an economic downturn can be a white-knuckle experience. Yet despite the challenges, there are proactive steps marketers can take to smooth out the ride while remembering that the journey is temporary. By focusing on strategic approaches to ad spends, relying on data and making smart investments, marketers can come out of a recession stronger, with better customer affinity and stable economic returns.

According to the National Bureau of Economic Research, recessions last anywhere from two to 18 months. However, most have far shorter timeframes. Since World War II, the average recession has lasted 10 months.

But what does that mean for marketers? In the short run, marketing and advertising budgets are being cut in anticipation of a recession.

Growth is possible in a recession, however. It takes strategic decision-making that looks at the channels, customers are results more closely. Marketers that focus on the long term will be positioned to weather the recession. They will come out of any downturn with the customer relationships and tactics that drive results. Here are some tips marketers can take now to batten down the hatches, create recession-proof marketing and ride out any impending economic storm.

Tip #1. Focus on resilience

Seventy-percent of recessions are over within a year, according to VentureBeat, and 30% last just two quarters. Marketers should remember that the pain is highly likely to be temporary, and that the way to navigate the tougher periods is by leaning on data. 

Despite that reality, about 30% of major advertisers will be cutting advertising budgets this year as a tactic to weather the economic uncertainty. Yet, as HubSpot notes, 45% of marketing budgets will be the same.

Now is the time to spend when others are not. Growth is possible during a downturn, especially when study after study shows the direct correlation of brand identity and brand recognition to marketing investments. While customer demand may contract during a recession, the importance of staying top of mind is never more critical. It’s about reinforcing messages about the value that your brand provides.

Brands need to be careful about emphasizing low prices and discounts, unless such positions are already part of the value proposition. A dramatic shift in tone can cause confusion and loss of market share at a time when neither is optimal.

Marketing resilience boils down to three core tasks:

• Know the landscape. Understand the current economic realities, both broadly and for your customers. As the landscape evolves, pivot your marketing strategy accordingly.
• Know the audience. Knowing your audience’s changing needs helps you satisfy their pain points and deliver high value that they are more likely to remember when economic conditions improve.
• Plan accordingly. The changes in economies and audiences allow you to understand why, how and when to shift what products and services you provide and the corresponding messaging that’s necessary.

Tip #2. Spend smarter

Shifting economic conditions and tighter ad budgets means marketers are going to have to act wisely when it comes to where spending happens. You want to be sure you spend for the long term, ready to respond and be present when the inevitable economic rebound occurs.

Consider the following:

• A McGraw-Hill Research study showed that the businesses that maintained or raised their marketing level from 1980 to 1985 fared far better than those that stopped. Those businesses that grew or maintained marketing during the recession had 256 percent higher sales levels when the economy recovered.
• Millward Brown research showed that brands that went dark during the 2008 financial downturn (by stopping all television ad spending) saw a reduction in brand image of 26%.
• A Nielsen study indicated that brands that go dark in a recession will need 3-5 years to recover.

Tip #3. Remember customers still matter most

Customers crave reliability, familiarity and feeling valued. Those very human traits are never more resonant than during challenging financial times. They want to associate with brands they love and will steer clear of those that do not build and maintain a relationship.

In challenging economic times, people want convenience, ease of use and experiences that are personalized, compelling and consistent across channels.

These serious responsibilities often fall largely on the backs of the marketing team. At a time when budgets tighten, marketers would do well to focus on campaigns that are highly personalized. Build campaigns that incorporate the behaviors that customers have demonstrated in the past. That means having rich data, culled and integrated from multiple sources, in a unified profile of each customer.

Relevance will be paramount when marketing in a recession. Give customers you’re your data tells you they need and abandon the generic.

Tip #4. Invest to build returns

The right technology makes all the difference. Invest in the technologies that will deliver the opportunities that are essential in a tightening economy.

The Lytics customer data platform (CDP) gives you the necessary tools and features to deliver the high ROI quickly, especially in uncertain times. The Lytics solutions include:

• Conductor. Unify first-degree customer data from myriad sources with Conductor. Connect data sources and create unified profiles that resolve multiple identities with customizable rules. Secure APIs and SDKs let you leverage hundreds of connections that handle petabytes of data in real time
• Cloud Connect. You need a robust solution to manage massive amounts of data. Cloud Connect takes data directly from your data warehouse and uses it to build specific segments within your ad networks. The tool also connects your data warehouse to hundreds of other connections, from social media platforms to search engines.
• Decision Engine. Using AI, the Decision Engine analyzes customer behaviors and generates predictive behavioral clues, affinities and connections. Create 1:1 marketing engagements at scale that understand your customer journeys, interests and the messages that will resonate.

Data is essential to weathering the economic storms, no matter how severe. The key is having a clear sense of what your data are, how they interconnect and how to leverage them effectively. You’ll make smart marketing decisions that keep customers interested and make the most out of tighter budgets.

To dive deeper, check out the next part in our Obstacle to Opportunity blog series, More impact, smaller budgets: 6 ways marketers can make smart spending mean cost savings.