The Bad News and Good News.
As we look ahead toward 2020, there is one specific topic lingering everywhere from the TV to the board room.
A Downturn Economy… Is it coming?
Many analysts and market gurus are indicating that a downturn economy may be on the horizon for the United States and the Global economy. We’ve been here before, so there’s no need to panic. This time, we’re equipped with new research, perspective, and tools to prepare and plan for a potential shift in the economy.
As you begin to plan ahead on how to protect your business from downturn economy, we’d like to place a spotlight on your advertising and marketing costs. Research shows that one of the first segments business owners adjust in a pending recession is ad spending.
In the aftermath of the last recession in 2008, ad spending in the U.S. dropped by 13%. There are a number of studies going back nearly a century that point out the advantages of maintaining or even increasing ad budgets during a weaker economy.
Those advertisers that maintained or grew their ad spending showed an increase in sales and market share during the recession and beyond.
Consider this… the majority of brands 10+ years ago were not utilizing digital advertising to the extent they are today. The industry itself has evolved dramatically within the last decade, and marketers can now, because of pinpoint data, make more informed decisions than ever before. Audience data acquisition paired with relevant ad placements during a recession will provide brands and companies with new insight and more efficient marketing strategies.
Why Continue Advertising During a Downturn?
- Increase "Share of Voice" and Take Advantage of Competitors' Fears
There are fewer adverts taking up inventory and "share of voice". It also allows for advertisers to maximize market saturation, reposition the brand, and/or introduce a new product. - Project Positive Brand Perception
Brands can project to consumers the image of corporate stability during challenging times. Promotional offers, vacation packages and on-going consumer messaging convey feelings of authenticity, strength, and security. - Reduced Advertising Costs
The cost of advertising drops during recessions. These "buyers markets" allow advertisers to reach more consumers with advertising campaigns.
Work Smarter, Not Harder by Leveraging a Data Management Platform
Utilizing audience data and consumer personas to maximize digital ad spend during a downturn can not only keep marketing and revenue metrics steady but is likely to improve performance. More than a third of marketers are leveraging data, Martech targeting tools, and integrated strategies that didn't exist five years ago. Outdated "pay and spray" strategies are being rapidly replaced by new-generation data technologies and highly targeted approaches that are not only more effective but more cost singular, as they connect to a customer experience once an audience has been defined.
Utilization of a Data Management Platform (DMP) is a crucial tool in order to analyze who your current customer is, and how-to hyper-target advertising to create the maximum ad spend. A DMP allows advertisers to build out custom personas on who is interacting with their web properties and more importantly…. which consumers are driving results!
This includes:
- General Demographic data – Age, Gender, Education, Marital Status, Kids, HHI, Music, Brand Affinities, Media Consumption, Hobbies.
- Travel Affinity – How, Why, Where, How far users traveled?
- Travel Interests – What do users like to do?
- Differences in lifestyle between a consumer who makes an online transaction vs. the online users that are just browsing.
When your audience is defined with this level of insight it allows for more informed targeting of digital advertising. Consumers do not simply stop purchasing completely during a downturn, they simply are forced to prioritize their spending. During a downturn, advertising remains crucial. Knowing who your ideal customer is, their lifestyle, buying habits, and needs, allows your business to limit wasted ad spend and reach a more engaged consumer.
Focus on the Advertising Tactics That Drive Results
When budgets become constrained, a more strategic look at your digital advertising plan can make up for a reduction in advertising spend. Digital ad solutions can reach consumers in all stages of their awareness and consideration cycle.
- Banner advertising, video and native ads are awareness building solutions.
- Custom content starts to communicate a story to consumers.
- Retargeting keeps your brand and message top of mind
- Paid Search reaches consumers that are ready to book a trip and place to stay.
If there is a reduction in overall advertising spend, concentrate ad dollars on the tactics and solutions that will help drive the most results and have the greatest impact on your marketing plan.
While no one wishes for an economic downturn or recession to occur, it may actually work as a way to revitalize a brand’s marketing strategy and approach to reaching consumers. As we watch the daily economic news and consumer reports, think about how your brand and organization can begin to prepare for changes in consumer spending habits and leverage a recession to leap ahead of competitors.
Prepare and go into any economic downturn expecting to Win.
Contact Orange142 today and allows us to provide you with the tools needed to navigate potentially difficult economic times.
