Can I Afford Digital Marketing During Turbulent Economic Times?

How Much Can I Afford?

A Three-Pillar Approach to Resilient Marketing Strategies that Work

It’s no secret that we’ve all been facing strong economic headwinds. Many national and global factors have contributed to rising prices and interest rates, as well as changes in how consumers spend and how business gets done.

Business owners are taking a close look at their overhead expenses and wondering where cuts need to be made, hoping to steer the ship back to more significant levels of profitability. “Batten down the hatches” seems to be the general approach, while still finding methods to meet business goals.

There’s no doubt that frugality is essential during times like these. However, economic analyses show that a bit of “uncommon sense” is also required to successfully make it through the turbulence. That’s where marketing comes in.

Marketing during challenging times doesn’t mean curbing or cutting your marketing budget. It just means understanding customers and competitors, and knowing how to optimize your campaigns to get the most out of your ad spend.

Significantly cutting your marketing leaves you completely stagnant – or worse. Making smarter decisions with your digital marketing solutions gives you an advantage over those whose first instinct is to stick their heads in the sand until brighter days come.

So, can you afford digital marketing during turbulent economic times? The answer is yes. End of blog.

In all seriousness, though, our Kansas City digital marketing agency consistently tracks the relationship between the larger economy and marketing trends to offer insights that can help you make strides, regardless of the storm clouds overhead.

Related Blog: “Marketing in a Recession: What to Do and What Not to Do

Three Pillars: An Approach to Strong Digital Marketing in an Economic Downturn

A successful approach to marketing during challenging economic times has three pillars, that – if sufficiently understood – can make your business far more resilient and on track for continued growth. An analysis of consumer behavior, your competitor’s behavior, and activating measurable strategies can essentially make you downturn-proof, or – at the very least – help you position yourself to effectively absorb the challenges that touch all businesses in some way.

1. Understanding Consumer Behavior and Digital Marketing

When experiencing economic downturns, consumers – like businesses – scrutinize their own budgets to determine which purchases are vital and which are not.

During the Great Recession, the Harvard Business Review published “How to Market in a Downturn,” which places consumer spending in four buckets: “essentials, treats, postponables, and expendables.” This organizing principle helps explain consumers’ range of justified and unjustified expenses. While essentials are “must-haves” and treats are justified spending, postponables can be put off, and expendables are “unjustifiable.”

The article’s authors explain that consumers more closely evaluate spending priorities during a recession. This doesn’t mean, however, that reprioritization means that you shouldn’t market your business. Understanding how consumers evaluate their spending when the economy is struggling provides valuable information on how to transform your marketing strategy to meet these revised consumer priorities.

Here’s how to gain insight into consumer behavior related to your industry and business. (Keep in mind that while the HBR piece may specifically apply to B2C businesses, the strategy derived from it is largely applicable for B2B marketing when you make a slight perspective shift to imagine consumers as your industry partners).

  • Which bucket does your business typically fall into for consumers (essentials, treats, postponables, and expendables)?
  • What is your typical marketing approach to your audience during “normal” or even “prosperous” economic conditions? What need are you trying to fill?
  • When consumers more closely analyze their spending, where does your business fall? Look back at other challenging periods of time (2008 and 2020, for example) and reflect on how consumers approached your business then. Is it clear that they reprioritized in some way? Were they asking you for a different set of services or products?
  • How can you alter your marketing approach to your audience when they’ve reprioritized your business?

Digital online marketing commerce concept

An Industry Example in Action
As a hypothetical example of understanding consumer behavior under challenging economic conditions, consider an HVAC business that is working with a Kansas City digital marketing agency. Under more robust conditions, a consumer might consider HVAC service an essential, but at other times, this service falls into the postponable or even the expendable category. At a more granular level, an HVAC company might do well selling its indoor air quality units and service agreements in a healthier market, but these taper off in favor of repairs during times of recession or inflation.

Therefore, an HVAC business might consider digital marketing solutions that heavily emphasize the value of repairs and limit their ad spend on indoor air quality systems. Repairs to heating and cooling are likely not expendable, even when people are watching their expenses, whereas better air quality is considered postponable.

Counterintuitively, however, the HVAC business should not limit its emphasis on service
agreements because these check-ups can prevent costly repairs in the first place. Service agreements can be positioned as a money-saving service, which will appeal to consumers on a budget.

An HVAC company might also consider offering DIY instruction video ads or blogs for consumers who might want to skip out on paying certain easy-to-perform services, but still want to experience the benefits. In this way, the business can still connect with customers and maintain brand awareness, which will have residual effects for the long-term, even if this tactic doesn’t generate revenue in the short-term.

2. Your Competitor’s Behavior and Digital Marketing

The second pillar of strong digital marketing during lean times is all about understanding your competitors’ behavior. It’s important to consider both the competitors that pull out of marketing campaigns, as well as those who are more aligned with your idea of running smarter campaigns.

As far as competitors who duck out during an economic downturn, these businesses are important to acknowledge because someone is going to take up their share of the market. Why shouldn’t it be you? This doesn’t mean, of course, that you go all in; careful decision making is required.

First, gain insight into your conservatively spending competitors. The following questions will help you consider an approach that capitalizes on the void that more skittish competitors have left behind:

  • Can you identify competitors who appear to have significantly decreased their digital presence?
  • What key approach were they previously offering that distinguished their business in the past?
  • Is this approach something that your company can adopt to fill that space? Can your business offer a new angle on your competitor’s approach?
  • What do you think made certain customers loyal to that business? What approach might help you develop a relationship with that business’s customers now that they’ve pulled back?

If you can develop a strategy that offers what your competitor typically provides without confusing your current customers, you’re in a position to develop a new client base. This strategy may even help you try something new that you’ve seen another business do well.

Next, gain insight into competitors that are still competing. Continuing to market your business against your competitors allows you to maintain your place in a competitive environment. Returning to The Harvard Business Review article on marketing during a recession, the authors remind their audience of the important value of continuing to emphasize your brand: “Even cash-poor firms would be wise to commit a substantial portion of their marketing resources to reinforcing the core brand proposition.”

A business that continues to spend advertising dollars on its core brand can also find an entry point with consumers by acknowledging their hardships. Ways include emphasizing your business for awareness, highlighting economic challenges by acknowledging affordability, or implicitly speaking to the consumers’ problems, according to the article.

3. Measurable Digital Marketing Strategies

The final pillar of marketing during a recession combines your insights into consumer and competitor behavior. At this point, you’ve either developed your own strategy based on a market analysis with your team or alongside a Kansas City digital marketing agency. Now is the time to take your information and decide on the right digital marketing solutions, whether it’s social media advertising, search engine optimization, paid search, or website design.

Digital marketing solutions – as opposed to “traditional” marketing – are highly resilient against economic recessions, downturns, and periods of high inflation. Due to digital marketing’s affordability; intelligent tools and features; ease of use for revisions, adjustments, and pivots; and its plain-as-day measurability, businesses can’t afford to skip the digital world if they want to stay in the game.

What makes digital marketing an important choice for businesses during challenging economic times?

  • Digital marketing is, above all else, highly measurable. Not only can you get data on the success of your campaigns in real time, but services like Google Ads provide excellent algorithm-driven suggestions to optimize your campaign for the right audiences and desired outcomes.
  • Digital campaigns are also easy to revise, revamp, and adjust as needed. If a campaign isn’t working effectively, you don’t have to send out new advertisements to print media outlets, make more effective commercials, or any of the other well-tread tactics of the past. For instance, with a paid search campaign, you can adjust the search keywords you want to rank for, edit copy, target (and retarget) specific demographics, and more to ensure your campaign is connecting with consumers and driving conversions, in a matter of minutes.
  • Digital marketing tools are also highly affordable, especially when compared with their predecessors:
    • OTT video advertising (on platforms such as Hulu, YouTube, Roku, and network TV apps like ESPN Now) is far less expensive than traditional TV marketing.
    • Businesses that use Google Ads’ paid media strategies benefit at an 8 to 1 ratio (for every dollar spent, they see a return of $8).
    • If you’re considering marketing on a social platform, Instagram hosts two billion active monthly users, and 35% of these users will make a purchase in 2023.

Digital marketing strategies are far less expensive, much easier to use, and more reliable than old media marketing tactics. However, using them requires skill. Yes, they are accessible for all businesses, but these tools and services – when explored deeply – offer rewards that only experts who have dedicated themselves to learning them understand.

Not yet comfortable with digital marketing? That’s what digital marketing agencies are for. When you work with the right agency, they can provide award-winning strategies, approaches, and optimizations to digital marketing that can improve your business growth while your competitors are going underground to weather the storm.

How to Find a Digital Marketing Agency That Is Prepared to Help You Strategize During Challenging Times

The logical question to ask now is where to find an agency that provides insights on consumer and competitor behavior while guiding you toward the right digital marketing strategies? A first step forward is to schedule a discovery call with an agency that offers a wide variety of digital marketing solutions. That way, you know you’ll have options for what tools to implement
for your campaign.

Learn more about developing a strong relationship with a digital marketing agency to help you reach and exceed your business goals, no matter the economic climate.

Related Posts