Note – I wrote this short piece for Hubspot’s 2023 State of Marketing Report, published in June 2023.
As I write this, it looks increasingly certain that the unprecedented energy costs, the surging inflation, a war in Europe, and a second brutal wave of layoffs, could bring the world to a recession in 2023 and could force us – marketers and content marketers – to reevaluate our spending strategies.
Despite the situation and while no two downturns are exactly the same, yet many of the lessons about marketing, content and advertising from previous recessions still apply.
As Peter Field stated, commenting on the recession that followed the Covid pandemic crisis, “The coming months will test everyone – we are in uncharted territory. But this was much the same in 2008 and it was the brands that held their nerve that bounced back when recovery came.”
This short piece pulls together some expert evidence on the best way for content and brand owners to manage marketing and promotional budgets, showcasing some of the best thinking from across the industry on navigating this challenging period.
1. Don’t go dark – if you can keep spending
A general marketing principle dictates that market share (SOM) tends to strongly correlate with share of voice (SOV – the percentage of promotional expenditure spent by the brand). Specifically where a brand SOV is higher than SOM the brand market share tends to grow, and the opposite is valid. If SOV falls below the brand’s SOM, then market share is likely to fall over the year following. The principle is valid in both B2C and B2B.
In times of recession, just keeping promotional spend flat will put our brand in a dominant position. As an example, if all the companies in our category cut their promotional spend in half, suddenly our budget that was 10% of the total share of voice now doubles to 20% as a result.
We, therefore, know that cutting the marketing budget during a recession is a risky strategy. It may provide some short-term relief, but the subsequent loss of market share that follows will be extremely difficult to regain when the crisis will be over and during the recovery.
Yet, it’s increasingly clear that for many brands this advice is academic and quite unrealistic. Maintaining spending is not an option if your sector has been hit hard. Brands hardest hit by the economic situation will focus on saving jobs and business continuity rather than marketing investments.
Based on the trend report, in fact, at least 55% of marketers say the potential for recession has affected their marketing activities this year:
- 25% of all marketers already had to change their marketing goals due to the potential for recession
- 20% of all marketers had to pivot from their established plan due to the potential for recession
And, as expected, 51% of marketers confirm that if an economic downturn or recession were to occur in 2023, it would affect their marketing activities. In fact, 24% of all marketers expect they will have to reduce their marketing budget if a recession occurs in 2023.
2. Organic content experiences are on the rise
During every crisis, organic content consumption tends to grow. Despite the decline of media costs, media spend has fallen sharply across all channels as many categories turn off ad spend.
In fact, based on the data coming from the report, if an economic downturn were to occur, marketers must expect to see budget cuts in paid social media content, print ads, physical events, email marketing and physical ads
Events are declining too, so are meetings and large gatherings. Organic content, video content, social media content, interactive content, webinars and digital events, are typically on the rise – brands turn to digital content, always looking at where their audience keeps conversations and consumes content.
Just because consumers are not purchasing right now, it doesn’t mean they’re not researching. Releasing interesting or useful content that targets upper funnel consumers will increase brand awareness and trust. Winning hearts and minds now will put you in a good position once recovery has begun and users are ready to purchase again.
3. Brand awareness, not just lead gen
As we have mentioned, brand associations created now are likely to bring the greatest sales benefit during the recovery period. Brands who can still invest should resist the pressure to switch promotional spend from brand awareness to activation. This is even more valid for B2B: because the sales funnel in B2B purchasing is generally longer than in B2C, arguments in favor of supporting long-term growth through brand building and top of the funnel content are likely to be even stronger.
In addition, for those B2B businesses whose customers and prospects are unable to buy because affected by budget cuts, pursuing short-term lead gen activities makes little sense. For these brands, it is suggested to invest in long-term relationship-building.
Les Binet is not wrong when he writes that “Brand promotion is not about profiting in recession, it is about capitalizing on recovery”.
Finally, brands forced to cut marketing investment should still focus on brand visibility maximizing content marketing and SEO tactics and should prioritize customer and prospect relationships via owned digital properties (eg. blogs) and social platforms. PR and co-marketing partnerships could represent another way to run marketing activities at no extra cost.
4. Emotions vs. logic, but being distinctive
We advise featuring humanity, humor, warmth and generosity in messages and promotion. Demonstrating humanity and generosity through behavior is advised too: brands should ask themselves the question, ‘how can we help?’.
We should lead with empathy, humor and emotion. The most successful content out of previous recessions leveraged emotion over logic; emotional creative strategies help to evoke warmth and humanity and have been the most effective in times of recessions.
Yet, we should be distinctive. When we communicate like everyone else – without any differentiation, with exactly the same message as those around us – we will disappear completely.
5. On-demand creative talent help scaling your content ops
Finally, a few words about layoffs and budget cuts and the implications of properly staffing your content team.
As the recent multiple layoff waves have clearly demonstrated, freelancers are often more appealing to employers during a recession. Companies are realizing there is a competitive advantage to have a robust strategy for using independent talent. Content marketers should take advantage of those content marketing-focused marketplaces, like WriterAccess for example, that offer creative talent on-demand and the possibility for the content teams to easily scale their content creation effort.