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On Building a Recession-Proof Advertising Plan


Serious question: are we in a recession? According to many economists, the consequences of stay-at-home orders and social distancing have in fact, taken our economy into recession territory. That sounds scary, but recessions are pretty common in our American economy; eleven have occurred between World War II and the Great Recession in 2009, according to Forbes. Throughout it all, the advertising and media industries have persevered, and they will continue to do so. The question for everybody who works in these spheres becomes: how, exactly, do we make a real-world advertising plan for this?


2020: the COVID-Recession


The recession in 2020 is a bit different than past events. Typically, recessions are defined as two consecutive quarters of GDP contraction. This time around, the economic trigger is similar to a natural disaster. It is the direct consequence of the steps governments have taken to slow the spread of the coronavirus pandemic.


Businesses from the small mom-and-pop corner stores to the multinationals have had to stop some-to-all of their business activities. Except for essential travel, people have been asked to stay home. Traffic both on the roads and in the sky is way down. This new reality has had a dramatic affect on commerce. While some companies have been lucky enough to provide a highly-sought-after product - toilet paper, hand sanitizer, baking products - some other industries have seen unprecedented ramifications. The oil industry, for example, saw the price of oil go negative for the first time in history.


With tens of millions of Americans out of work - including some of our advertising and media comrades - it seems like a full recession is inevitable at this point. Earlier this year, the International Monetary Fund (IMF) forecasted that the world economy would outpace 2019 and grow by 3.3%. Now, in its World Economic Outlook, the IMF projects that the economy will contract by 3%. That’s a huge reversal that will likely spur businesses to revise their own plans for the year.


Your Advertising Plan Under Construction


Any time a recession comes to pass, businesses, fearful of declining revenue, begin to cut back in various areas - new hires, current payroll, inventory, operations and yes, their ad spending. In the aftermath of our most recent recession over a decade ago, US advertising declined in both 2008 and 2009, according to eMarketer. In a separate analysis by The Drum, after the 2008 stock market crash, newspaper ad spend in the US fell by 27%, radio by 22%, magazine by 18%, outdoor by 11%, TV by 5% and digital by 2%.


We’ve already mentioned that this recession will be different than those of yesteryear, but there are some basic media truths and tactics to keep in mind during economic downturns to ensure your advertising plan is armed and ready to face a recession with guns blazing.


First, Let’s Talk Budget


Reducing marketing activities during a recession seems like a logical move at first glance. A company only has control over the money going out, not the money coming in. In response to less revenue, the gut reaction is usually to cut costs and focus on how they can generate revenue in the immediate future rather than six or 12 months from now. Maintaining or even increasing ad budgets during a recession is actually a strategy that comes with a number of advantages, though.


According to a 2008 report from the Institute of Practitioners in Advertising (IPA) on advertising during a downtown, cutting ad budgets in a downturn only helps business on a short-term basis. A company will be unable to emerge from a recession in a strong position in the market due to its loss of Share of Voice (SOV). SOV conveys how much weight your advertising has compared to other competitors in the same market. Forfeiting your SOV in an economic downtown makes a business much less profitable in the long-term and makes it harder to recover post-recession.


Remaining active during a recession also has several other benefits. During these times, advertising arenas are less likely to be as loud and crowded as they are in economic booms. Therefore, maintaining a presence on TV, on the radio, online or elsewhere will increase your brand’s likelihood of actually being seen and heard. Your competitors are also likely following the faulty logic of slashing ad budgets, so you have a unique opportunity to reposition yourself and rack up credibility by portraying a stable business model even in difficult times. Another plus is that the cost of advertising drops in recessions, so your current budget can take you a lot further.


Focus on What Works


In a time when you’re already pinching pennies, you don’t want to spread your resources too thin by marketing too many different service or product variants at once. Instead, concentrate on your core products, the core money-makers of your lineup. As Harvard Business Review advised during the Great Recession in 2009, “When faced with declining demand, marketers should continue to reduce excessive complexity in product lines that feature too many marginally performing sizes and flavors or trivial differences among product models.”


In other words, if you sell potato chips, a recession is not the time to advertise your espresso or curry flavors, products that will have a limited audience. This may mean pivoting media budgets, adjusting creative and repositioning or cancelling campaigns in order to narrow your focus to the parts of your business that are the most likely to drive revenue.


Your advertising plan should also be more focused in regards to the tactics and channels you use. You already know what works well for you, which channels perform the best, where you’ll generate the most new leads; recessions aren’t a time to experiment. If you do decide that the timing is right to try a new media platform, test it out on a smaller, low-budget scale first. Every move needs to have a strategy behind it, and every ad dollar needs to have proven value.


Don’t Forget Digital Advertising


During the Great Recession, digital advertising was one channel that didn’t take a huge hit. According to eMarketer, digital ad spending declined in 2009, but only by single digits, and that was after it actually increased in 2008. What’s great about our advertising climate now compared to twelve years ago is that people spend much more time online and on their smartphones than they did back then. Digital marketing withstood the largest recession since the Great Depression, and it is in an even more favorable position, now.


For businesses worried about making ends meet while keeping up with their advertising plan, digital advertising is a reliable avenue. Everything from your budget to your ad messaging can be adjusted at a moment’s notice, and you have a wealth of data to empower your decisions. When you need to prove that your advertising efforts are generating real-world results, digital channels have real-time analytics that you can closely monitor and track for performance.


Be the Man With a Plan...an Advertising Plan


In turbulent times, you don’t want to be caught unprepared. For our media planners and buyers at The Ward Group, it’s our job to be ready for whatever the economy throws at the ad industry. We’re like the Swiss Army knives of media; we’ve accumulated a lot of skills over our many decades in business, and we aren’t afraid to use them. If you’re feeling any uncertainty about your advertising plan moving forward, we’re here to walk you through your options and help you do what’s best for your brand. You don’t need to build a media plan alone. Just give us a call today, and we’ll introduce you to your dedicated team of media stewards.


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