Why Brands Must Advertise During A Recession

July 22, 2022 3 min read


Why Brands Must Advertise During A Recession

Reading Time: 3 minutes

When a recession comes, advertising budgets are often the first to be compromised by brands. This seems like an obvious choice as brands struggle to stay in the spotlight and consumers become more cautious of their expenses. But what seems to be a logical step might be misleading in the long run. Cutting off ad spending in a recession can take a toll on sales even after the economy regains traction.

It might sound like an absurd idea to maintain the advertising budget during a recession, but there are multiple studies backing up the fact that advertisers who continued to advertise during an economic downturn witnessed long-term growth with increased sales and market share.

It’s a common misconception among advertisers that performance and cost are in opposition to one another, however, that’s not true. They are, in fact, two sides of the same coin.

Advertising is necessary even in times of economic slowdown to stand out among your competitors and provide customers with the sense of stability that they are looking for in these uncertain times.

5 Reasons To Advertise During A Recession

a stressed man due to recession

1. Positive Impact

Amidst ambiguity, people are looking for hope, inspiration, and comfort. This is the best time to advertise content that provides value, strength, and resonates with the audiences. Being part of the solution and assuring your consumers of a positive future ahead will foster brand loyalty for years to come.

2. Sustainable Growth

To ensure long-term sustainability, advertising is essential even when the economy is in a recession. Grinding it to a halt will require brands to start from scratch and double down their efforts to rebuild relationships with customers. All the previous work done to build a strong foundation would be lost.

3. Opportunity to Re-position

The reduced spending of competitors will decrease the ‘noise level’ in a brand’s product category, enabling advertisers to re-position a brand or even launch a new product.

4. Less Competition

During recessions, advertising costs drop. Investing in advertising in times of turbulence will help brands stay at the forefront of consumers’ thoughts. This will guarantee long-term success when the economy picks up.

5. Consumer Loyalty

Cutting off advertising budgets will open wide doors for competitors to take advantage of the brands’ negligible online presence. Alternatively, an increased share of voice during a slowdown will naturally make consumers turn towards the brand when they regain their spending power.

Even in times of adversity, data-driven advertising is crucial and brands just can’t afford to skip it. Since brands might feel clueless when going against the norm, here are some strategies that they can leverage to be a pillar of strength for their consumers when uncertainty knocks in.

Tips on Advertising During an Economic Downturn

1. Tailor Brand Voice to Target Audience

Value is an essential factor that needs to be constantly fed in advertising campaigns. Customizing the tone and message in accordance with the needs and wants of target audiences will help build consumer loyalty.

2. Establish Brand Trust

A positive message conveying long-term value and appealing to emotion will assist in building a strong emotional bond with consumers as they are more likely to trust a brand that relates to their situation while encouraging and empowering them. Focusing on trust-building will keep the revenue stream flowing.

3. Change in Offerings

By adjusting their messaging and pricing, brands can engage with a wide range of underprivileged customers. Changing pricing and packaging to adapt to the economic downturn can significantly help advertisers to differentiate themselves from the competition and strengthen connections with consumers.

4. Focused Targeting

With a low budget and fear of declining revenue, laser-focused targeting is the safest approach to advertising in an economic recession. Identifying fast-growing niche segments within target audiences and focusing on relevant targeting can maximize the efficiency of advertising campaigns.

A carefully crafted advertising strategy that caters to consumers’ changing needs can boost trust and drive long-term growth. Thus, it’s a good idea to spend on advertising even during a recession and advertisers should aim to make the best out of their budgets in times like these.

VDO.AI always stays a step ahead in helping brands exceed their advertising objectives with its proprietary technology and full-funnel ad solutions that boost engagement and maximize ROAS. Get in touch with VDO.AI here to discover the high-impact innovative solutions that it has to offer and prepare the best for recession.

Shruti Bhatt is a Marketing Associate at VDO.AI. She likes challenging herself and is always on the hunt for new ways to improve her marketing initiatives.