{"id":14921,"date":"2023-12-11T11:13:28","date_gmt":"2023-12-11T16:13:28","guid":{"rendered":"https:\/\/clicketmortar.com\/?p=14921"},"modified":"2023-12-11T13:29:20","modified_gmt":"2023-12-11T18:29:20","slug":"optimizing-marketing-budgets-during-a-recession","status":"publish","type":"post","link":"https:\/\/clicketmortar.com\/en\/blogue\/optimizing-marketing-budgets-during-a-recession\/","title":{"rendered":"Optimizing Marketing Budgets During a Recession"},"content":{"rendered":"[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_raw_html]JTNDaGVhZCUzRSUwQSUzQ21ldGElMjBwcm9wZXJ0eSUzRCUyMm9nJTNBaW1hZ2UlMjIlMjBjb250ZW50JTNEJTIyaHR0cHMlM0ElMkYlMkZjbGlja2V0bW9ydGFyLmNvbSUyRndwLWNvbnRlbnQlMkZ1cGxvYWRzJTJGMjAyMSUyRjA4JTJGQ19NX2lsbHVfYmxvZ3VlXzFfZXJlX3NlbWFpbmUuanBnJTIyJTNFJTBBJTNDJTJGaGVhZCUzRQ==[\/vc_raw_html][vc_column_text]\n

Rethinking Marketing in Times of Economic Slowdown<\/h2>\n

 <\/p>\n

Despite marketing being as old as time, it isn\u2019t shielded from the economy’s fluctuations. What happens to a company’s marketing function during a recession like the one we’re currently experiencing? While it’s certain that an economic slowdown affects marketing budgets, it’s also clear that it presents an opportune moment to prepare for future recovery.<\/span><\/p>\n

Yes, the impacts of an economic crisis on a company’s marketing are real. However, when used to your advantage, these impacts can transform into genuine growth catalysts that lead to new heights when the economy restarts. But first, it’s crucial to differentiate between a catalyst and a precipice.<\/span><\/p>\n

 <\/p>\n

The Direct Consequences of a Recession<\/b><\/h2>\n

 <\/p>\n

To begin with, what can we expect during the recession regarding our marketing department?<\/span><\/p>\n

A Slowdown in Demand<\/b><\/h3>\n

 <\/p>\n

We know that economic uncertainty often prompts consumers to spend less. This inevitably leads to a decrease in demand for certain products and services, impacting the businesses that produce or provide them.<\/span><\/p>\n

Decrease in Customer Loyalty<\/b><\/h3>\n

 <\/p>\n

During a recession, consumers typically tend to seek ways to reduce their expenses. Maintaining the loyalty of these customers can become challenging in such a context.<\/span><\/p>\n

Contraction of Marketing Budgets<\/b><\/h3>\n

 <\/p>\n

Very often, companies reduce their marketing budgets to maintain a profitability threshold.<\/span><\/p>\n

 <\/p>\n

Leveraging the Impact of a Recession to Your Advantage<\/b><\/h2>\n

 <\/p>\n

Beyond the impacts of a recession, it’s also possible to uncover opportunities within it. Of course, each company is different and must determine its course of action during an economic downturn.<\/span><\/p>\n

Nevertheless, here are a few compelling reasons to continue investing in marketing during an economic slowdown:<\/span><\/p>\n

 <\/p>\n

Maintaining the Brand Visibility<\/b><\/h3>\n

 <\/p>\n

We mentioned earlier that during tougher economic periods, consumers tend to gravitate toward brands they trust or are familiar with. If you’ve maintained marketing efforts even during the crisis, that brand could be yours.<\/span><\/p>\n

Let’s see how England\u2019s multinational company Reckitt Benckiser reaped the benefits of this principle.<\/span><\/p>\n

The multinational company Reckitt Benckiser launched a marketing campaign during the recession following the 2008 financial crisis.<\/span><\/strong><\/p>\n

The goal was to persuade consumers to buy its higher-priced and high-performance brands despite the tough economic context. By increasing its advertising spending by 25% while its competitors reduced advertising, Reckitt Benckiser increased its revenue by 8% and its profits by 14%.<\/span><\/strong><\/p>\n

Most of its competitors experienced profit declines of 10% or more. What set Reckitt Benckiser apart? The company made the wise decision to view advertising as an investment rather than an expense. (Kumar & Pauwels, 2020).<\/span><\/strong><\/p>\n

 <\/p>\n

Taking Advantage of the Decrease in Advertising Costs<\/b><\/h3>\n

 <\/p>\n

Reduced marketing budgets mean less competition for advertising space. As you’ll understand, this leads to cheaper media purchases.<\/span><\/p>\n

This can be an opportunity to increase your reach among your target audience, precisely at a time when several of your competitors will have a smaller presence in advertising channels. Here is an opportunity to reaffirm your position in the market\u2014at a lower cost!<\/span><\/p>\n

7 Ways to Save on Advertising Costs<\/span><\/strong><\/p>\n

    \n
  1. Reducing TV ad spots from 30 seconds to 15 seconds. <\/strong><\/li>\n
  2. Substituting radio advertising for television, especially for frequent messages to remind consumers to take action. <\/strong><\/li>\n
  3. Shifting to precisely targeted media (Google, etc.). <\/strong><\/li>\n
  4. Advertising brands jointly with partners in a different product category that targets a similar consumer segment. <\/strong><\/li>\n
  5. Adapting or extending an existing campaign rather than commissioning a new expensive campaign.<\/strong><\/li>\n
  6. Consolidating advertising within a single agency to maximize media buying discounts. <\/strong><\/li>\n
  7. Avoiding long-term commitments in media at the start of the recession; waiting for decreased advertising rates before purchasing media.<\/strong><\/li>\n<\/ol>\n

     <\/p>\n

    Developing Customer Relationships<\/b><\/h3>\n

     <\/p>\n

    During financial instability, a consumer will pay attention to brands showing empathy. Therefore, it’s an opportune moment to reach out to your established or prospective clientele: offering tangible solutions to the crisis, for instance, may be well received by your customers. By initiating this dialogue, a company can better understand consumer needs and adjust its offerings accordingly. <\/span><\/p>\n

     <\/p>\n

    Positioning for Economic Recovery<\/b><\/h3>\n

     <\/p>\n

    Don’t forget that behind every economic crisis lies a recovery. By investing in marketing during the downturn, a company works on positioning itself for the upturn. By maintaining visibility with its target audience and developing relationships with existing customers, the company is perfectly positioned to benefit from the economic upturn when it occurs.<\/span><\/p>\n

    Because sooner or later, consumers will be inclined to spend again, and it’s the companies that maintained their position that will receive their money.<\/span><\/p>\n

    Research has shown that products launched during a recession have both better long-term survival chances and higher sales revenue. Indeed, a multitude of studies demonstrates that the optimal time to launch a new product is just after the midpoint of a recession.<\/span><\/strong><\/p>\n

     <\/p>\n

    Cutting on Marketing Budgets? Wait, There Are Alternatives<\/b><\/h2>\n

     <\/p>\n

    Prioritizing Channels With Strong ROIs<\/b><\/h3>\n

     <\/p>\n

    Instead of drastically slashing their marketing budget, companies should aim to optimize it. How? By focusing on more effective channels to reach their target audience, such as search engines, email marketing, or remarketing<\/a>.<\/span><\/p>\n

    Additionally, a company can cut costs by using less expensive methods: content marketing or organic search engine optimization, for instance.<\/span><\/p>\n

    Ultimately, it’s all about maintaining a balance on the tightrope between sustained visibility with consumers and the necessary budget optimization that a slow economic period calls for. <\/span><\/p>\n

     <\/p>\n

    Double Down on Retention and Loyalty Efforts<\/b><\/h3>\n

     <\/p>\n

    Loyalty and retention efforts, as they help maintain a customer base, are particularly important during a recession. Examples include exclusive promotions, loyalty programs, or personalized emails to maintain regular communication with customers. Organizing exclusive events for loyal customers is another interesting avenue.<\/span><\/p>\n

    Certainly, these solutions don\u2019t instantly increase sales but should be seen as a long-term investment: they strengthen the company’s market position by building loyalty with current customers, who often recommend the company to others, contributing to word-of-mouth.<\/span><\/p>\n

    It’s crucial to note, however, that loyalty should never come at the expense of acquiring new customers. Both retention and acquisition need to be balanced to favour growth.<\/span><\/p>\n

     <\/p>\n

    Picturing Your Marketing During a Recession as a Training<\/b><\/h2>\n

     <\/p>\n

    In winter, we keep training if we want to stay in shape for the summer season, which always arrives sooner or later. Certainly, it might sometimes seem daunting or simply counterproductive. But in the long run, we’ll always be glad we made the effort beforehand. The same holds true for our marketing efforts. Because after every winter, buds bloom; and it’s by preparing during the recession that a company grows stronger from roots to canopy for all the summers to come.<\/span><\/p>\n

     <\/p>\n

    Sources<\/b><\/h2>\n

     <\/p>\n

    Kumar, N. (2021, February 1). Don\u2019t cut your marketing budget in a recession. Harvard Business Review. https:\/\/hbr.org\/2020\/08\/dont-cut-your-marketing-budget-in-a-recession<\/span><\/p>\n

    Quelch, J. (2014, August 1). How to market in a downturn. Harvard Business Review. https:\/\/hbr.org\/2009\/04\/how-to-market-in-a-downturn-2<\/span><\/p>\n

    Kanter, R. M. (2014, July 23). In a recession, put everyone in marketing. Harvard Business Review. https:\/\/hbr.org\/2009\/04\/in-a-recession-put-everyone-in<\/span><\/p>\n

    Navarro, P. (2009, April 1). Recession-Proofing your organization. MIT Sloan Management Review. https:\/\/sloanreview.mit.edu\/article\/recession-proofing-your-organization\/<\/span><\/p>\n

    Gulati, R. (2014, October 6). Roaring out of recession. Harvard Business Review. https:\/\/hbr.org\/2010\/03\/roaring-out-of-recession<\/span>[\/vc_column_text][\/vc_column][\/vc_row]\n","protected":false},"excerpt":{"rendered":"

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Depuis, il comprend l\u2019importance de maximiser sa pr\u00e9sence en ligne et il fait tout pour hisser le marketing num\u00e9rique du Qu\u00e9bec \u00e0 un autre niveau. Titulaire d\u2019une M. Sc. Marketing et enseignant en marketing \u00e9lectronique \u00e0 HEC Montr\u00e9al, il est un gars de d\u00e9fis. Cofondateur de Click & Mortar (www.clicketmortar.com), son ambition est de faire de Montr\u00e9al l\u2019\u00e9picentre du marketing num\u00e9rique mondial (rien de moins !). 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