Unlike past recessions, our current economic turmoil is unpredictable. In the past, a recession meant that the job market tanked, the value of the stock market tanked, consumer spending tanked, and for a few years everything went dark. However, things have changed. We are more conscious of what we were consuming. But, nonetheless, we are consuming more than ever. It’s an unpredictable time and brands don’t know whether to save or invest in their marketing.
What is the definition of a recession?
In the past, a recession was based on if a country reported two consecutive quarters of declines in gross domestic product (GDP). The problem is that this metric does not seem to hold true anymore. Some of the economic indicators that make up or influence GDP are in recession, while others are not. Prices are up but so are incomes for most. The job market is thriving in certain industries, while suffering in other sectors. Some industries report losses. Other industries are reporting record profits.
What does this mean for brands?
The marketing industry is also experiencing the roller-coaster that is our current economic status. Job demand so far seems robust. Media prices are rising. The Super Bowl advertising sold out at record prices. However, the stock prices of Meta and Alphabet are down, as is advertising agency conglomerate WPP’s value, while IPG and Omnicom were flat over the last six months. The National Retail Federation (NRF) forecasts growth of 6% to 8% in U.S. holiday sales for 2022.
how do you respond?
So, what is the best move for brands when it comes to marketing in a recession? Should you play it safe and hoard your marketing dollars? Or should you use the caution in ad spend by your competitors as an opportunity to outspend and outgrow them? We always hear about the brands that made the most out of the recession and come out the other side incredibly successful. Could that be you?
Our advice? Recessions come and go. However, strategic marketing could be the determining factor in your brands future success. Invest in your brand.
Carolina Macedo, the author, is Project Coordinator of Marketing Keys.