The more a brand spends on advertising vs its competitors, the more it will grow. During a recession, maintaining share of voice will help to avoid an expensive recovery. In almost every recorded instance, a brand with a positive ESOV will gradually grow its share of the market to a level that will eventually match its share of voice.

McDonald’s decided to drop its advertising budget and Pizza Hut took advantage of ths. While McDonald’s sales declined by 28%, Pizza Hut’s grew by 61% thanks to their continued spend.

Consumers look favourably on brands who are responding to the crisis in a helpful yet authentic manner. While brands are cutting their budgets, creative comms are more important than ever. During this time of heightened emotions, many brands re-evaluate their messages. Empathy often equals effectiveness when talking to customers, especially in a time of crisis.

Disney focused on these emotions, in a time where people were trying to escape their harsh reality, they introduced the mouse character with several animations. And the rest is history!

Consumer needs change when there is an economic downturn, you need to know what your customers need right now and make any adjustments accordingly. You’ll see supermarket private labels waiting for the winter of recession before entering the shopping baskets of many. By the time the recovery period arrives, they have proven their quality and remain a regular purchase.

Hand in hand with a readjustment in targeting comes a review of product positioning. While everything may feel the same, customers have changed. They are now risk averse, uncertain of the future and keen to save, all of which may lead you to reconsider your positioning. 

Covid was a prime example of this with gym chains offered online workout subscriptions, and commercial airlines carrying freight.

Netflix have done this successfully, offering their service by streaming through services like Xbox, allowing themselves to reposition and attract new customer bases.

Thanks to the rampant inflation we’re experiencing, there is a particular pressure on price increases right now. If you need to increase your prices, just play it straight and let your customers know exactly what and why it is happening! 

We need to become all about purpose. In this new time it is clear that acts are now more important than ads and the normal rules of marketing, business and recessions may not apply. All brands should aim to become purpose-driven, putting aside their short term profits where possible to focus on doing what is most helpful and in the public interest.

Starbucks did just this after they fought for survival after the recession – shifting the focus back to making customers feel welcome and cared for.

The full impact of advertising is seen over time which helps explain why brands that maintain or increase their spend during a recession are rewarded in the months and years to follow. Lots of evidence shows that slashing advertising will hurt sales during and after the period but those who increase their spend, especially relative to competitors, will grow sales and share of the market faster, which will continue to be seen for months and years to come.  Those who do not, find themselves struggling even when in stable future markets.

Budweiser beer in the US remained stable for 1 year without advertising, and then started to see declines appearing.

As you can imagine we have a few opinions on this, and we’d be delighted to share them with you. Together we could successfully navigate your brand through the uncertain times ahead!