Five Reasons Why Brands Should Increase Their Marketing Spend In A Downturn

Five Reasons Why Brands Should Increase Their Marketing Spend In A Downturn

Tim Beard is the managing director for APAC at Silverbullet, with over 25 years’ experience helping organisations implement and manage digital technologies. In this piece, he explains why now is the perfect time for brands to increase their marketing spend.

There’s been a lot of debate recently as to whether it’s counter-intuitive to boost marketing spend in the current climate. In this article, we break down the clear points of evidence showing those brands which do invest wisely, actually increase their market share, and come out ahead of those who contract spending.

The topline reasons for this are logical – consumers still seek information from the brands they trust in times of economic uncertainty and recession. Those brands who fill the ‘communication void’ will inevitably enjoy an increased share of voice in the hearts and minds of consumers. It’s also important to keep in mind that activity will eventually ramp up again, and brands can either be on the front foot for this and hit the ground running, or play a game of catch-up that could damage short and long-term profitability.

Any period of reduced customer activity is also the perfect ‘downtime’ to address internal CX and UX bottlenecks or pain points, and find ways to optimise the customer journey, reduce bounce rates and increase conversions.

1. Recession spending increases brand share of voice

Multiple studies are doing the rounds at the moment, but the upshot is, companies increasing ad spend by up to 20% in a recession saw an average share gain of 0.5%, and those that increased beyond the 20% threshold recorded average gains of 0.9%.

From a media-efficiency standpoint this is a once in a lifetime opportunity to drive brand awareness quickly and at scale. Globally, we’ve seen video CPMs down 40%, display CPMs down 55%, and native CPM’s down 30%, as many marketers lose courage and reduce spend, it gives marketers with the wherewithal a never-to-be-repeated opportunity to make their mark.

Brands need to be resilient and consumers want reassurance normality is on the way back.

And if you think you can just turn the tap on when the economy returns, we’re seeing retailers globally gearing up for the mother of all sales as retail stores are able to trade again. They have a backlog of stock they need to shift through their supply chain, and those sales are going to need (and get) vast amounts of media support very quickly. So don’t wait. The time is now.

A further example of how this can affect the long-term bottom line is the example of Kellogg and Post in the Great Depression. Never heard of Post? This is why: The cereal makers used different approaches to advertising spend in the 1930s. Post reduced its spending, while Kellogg doubled its spending. The result? By 1933, Kellogg’s profits had risen almost 30% and became the industry’s dominant player, and Post folded.

2. Be where customers are

Customers haven’t disappeared. In fact, it could be argued they are more active than ever, just on different sites. IAB Australia reports a 71% increase in time spent on online food and cooking websites, and Australians aged 13-24 increased their time spent online with food and cooking content by 144% in March.

Sunday March 29, 2020, recorded the highest daily time spent consuming food and cooking content in 2020, with a combined total of 63,555 hours spent on food and cooking websites. Data also showed that on the last weekend of March, Australians spent 71% more time consuming food and cooking content online when compared to the last weekend of February. This is a lot more time compared to pre-COVID time periods, so investing in these channels is a great way to increase share of voice at this time.

3. Keep your existing customers

Most marketers now understand it is cheaper to keep an existing customer than to find a new one. Now is the time to double down on your customer loyalty with a dedicated program, customer feedback initiatives, and leveraging your data to power personalised and high-impact experiences.

Gartner US reports 80% of growth organisations use customer surveys to collect customer experience data, compared with just 58% of non-growth organisations, and 43% of product managers at growth companies are using analytics to collect and analyse customer perception and sentiment data. This is compared with just 22% of product managers at non-growth companies.

Gathering, analysing and acting on customer feedback is the best and most effective way of keeping those customers, and you may even get a word of mouth benefit from it as well.

4. Get your mobile site in order

Reduced customer interactions can create bandwidth increases for those projects you always wanted to get to but never had the time to do. A key one of these is getting the user experience for your mobile site in order.

Why? Last year Merkle found mobile devices generated more than 60% of organic site visits. Slow sites that aren’t optimised for mobile result in high bounces rates, so while traffic is slightly down is a perfect time to streamline that interface, because none of us can afford to lose customers to slow load speeds right now, and organic traffic is key to growth.

5. Get to that AI project

Incorporating artificial intelligence and/or machine learning into your CDP or DMP is one of those projects which often get left in the ‘too hard’ basket in peak times.

Much like ensuring mobile site optimisation, now is the time to invest in these projects to ensure a brand is in the best possible position to serve customer needs. Why? According to Forbes US, 40% of marketing and sales teams say data science encompassing artificial intelligence and machine learning is critical to their success as a department.

Let’s face it, this kind of tech for insights is not going away, so using this time constructively to get on top of it is a strategic, smart business move for now, and in the months ahead.


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