Leading marketing experts like Mark Ritson are advising marketers to increase their budgets to weather the impending recession. This is based on what worked during the Global Financial Crisis of 2008 and earlier recessions. Research shows that brands that increased their spending during previous recessions improved the company’s growth across the recession and longer term. This isn’t a revelation.
Back in 2008, an outdoor campaign for the Financial Times promoted the same concept. Billboards stripped bare, questioned the wisdom of companies slashing their budgets during a downturn.
Is increasing your marketing spend really the solution to growth during a recession?
Not this time around. Twelve years ago, the digital marketing landscape was unrecognizable. Google was just 10 years old and hosting [only] 235 million searches a day (today it averages 3.5 billion searches). Steve Jobs had just given us the iPhone 3G, Facebook hit the 100 million users milestone (it now has 2.6 billion monthly users), and Google Analytics had only been around for a couple of years. Marketing technology has evolved exponentially since. It’s no longer about how much is spent, but where you direct your budget and who you target.
Data is the new currency
Digital marketing tools and platforms have evolved to provide a level of granularity that wasn’t possible a decade ago. Smart analysis of a brand’s customer data sourced from all of its on and offline customer channels can support finely tuned audience segmentation and give campaigns a level of personalization not available before.
With these new capabilities (and magnitude of customer data available) marketers and brands can gain insights about their customer behaviors, preferences and engagement (or non-engagement), and gain a much more accurate picture of what they’re looking for. This is essential intelligence in a recession when the spending ability of many individuals and households is affected by income and job insecurity.
Having the right martech tools is an integral part of this. A customer data platform (CDP) can integrate with a brand’s existing martech and ecommerce tools including its ecommerce engine, tag manager, email marketing tool, CRM, app, social channels, Google ads, and programmatic platform. It can also capture offline store point of sale (POS) data.
Instead of customer data being siloed across multiple sources e.g. email marketing lists, CRM contacts, ecommerce customers etc., having all of a brand’s data in a single accessible place allows marketers to develop much more targeted campaigns. These can be based on an individual customer’s profile and preferences across a brand’s full range of touchpoints.
Brand affinity, purchase times, average spend, preferred method of collection… there are wide range of possibilities for segmenting audiences for marketing and advertising and increasing the relevance and personalization of individual campaigns.
Simply spending large budgets on general interest omnichannel campaigns is an outdated style of marketing and unlikely to deliver positive returns in the current market. With overall marketing budgets likely to be under pressure for the foreseeable future, strategic campaign planning and delivering demonstrable and improved return on advertising spend are now key marketing objectives.
Planning your marketing budget spend for the impending recession
1. Rather than bigger, wide-ranging campaigns, focus spend on smaller, laser-focused campaigns. Approach budget allocation strategically. You’ll achieve much greater ROI and will spend the same as, or less than you were previously for better returns.
It’s no longer enough to simply throw more money at your marketing budgets to increase business during a recession. Today’s brand marketers must be more strategic. You need the right martech tools to capture and segment your customer data from all of your brand’s touchpoints and data sources, a solid understanding of your customers and their preferences, and a sharper focus to your campaigns.
2. Capture, analyze and segment customer data from all of your brand’s on and offline channels, using best in class martech tools. If you don’t have that capability already, investing in a CDP like Audiens would provide a solid foundation to your martech stack, particularly given the approaching market conditions. It’s not too late. Chosen wisely, trialing, onboarding and configuration for your brand can be achieved in a short space of time — a handful of days, not months.
Do this and you’ll see sales growth — in spite of a recession. No ad spend increase needed.
To find out more, get in touch.