Recession Marketing &
Business Success Guide
Recession Marketing &
How Your Company Can Grow During The Next Recession
Businesses that increase spending during recessions increase their profits by up to 270% as the economy improves.
A recession has been forecast for 2023 and into 2024 by every major news organization in the US.
Access to cash is more expensive, and interest rates are at the highest they have been in decades. Mortgages are at a 23-year high. Inflation is causing consumers and businesses to feel the pinch of higher costs and lower value for their spending. It is more expensive for consumers and businesses to do everything, from buying a home to expanding a business.
When the economy declines, many businesses react by stopping their marketing expenditures, which is the wrong move. As the economy improves, spending returns to companies that maintain bonds for consumers.
2024 Recession Forecast
100 Years Of Economic Downturns
Company
Case Studies
How To Grow During Recessions
Forecast
The pandemic in the US started in March 2020. Cities around the world were on lockdown, quarantine, and stay-at-home orders. In fact, as of March 25, 2020, one-third of the world’s population was on quarantine order, affecting 2.6 billion people.
The pandemic caused an economic downturn, but it doesn’t take a sudden shock to our world to cause a downturn. Many happen slowly and over time. Inflation, wars, and political disruptions can all impact consumer spending and slow the economy.
For business owners and marketers, times of economic downturn are tough. How you act in this moment will define how your business survives and how customers perceive your business when the recession is over. This guide discusses why marketing in a downturn is essential to your business.
What you’ll learn is the proof gathered from secondary research that demonstrates why marketing during an economic downturn will grow your business.
We’ll show:
- Case studies, from businesses that overcame economic malaise to thrive
- The resulting economic consolidation that you can benefit from when economies pop back up from recession and depression
- Examples of brands using best practices during recessions
According to CNBC, a recession has been forecasted for much of 2023 and 2024. Formally, a recession is when there are two consecutive quarters of declining Gross Domestic Product (GDP) growth. That hasn’t happened.
But, consumers and businesses are feeling the pinch of higher costs and lower value for their spending. Interest rates have increased dramatically over the last years since the pandemic. Access to cash for consumers is becoming difficult, with credit card interest rates at more than 20%, higher than in decades. Mortgage rates are at 8%, the highest in 23 years. Inflation is cutting into every corner of consumer spending, peaking at 9.1% in May 2022.
In simple terms, it costs more to buy the exact same goods and services. Credit card delinquincies are up, surprising major retailers with evidence of mounting financial stress on consumers. Executives at some of America’s biggest retailers say:
Consumers are strained for cash and buying less stuff, in a troubling sign of a slowing economy.
For business owners, this evidence points to slower spending, tighter consumer budgets, and a greater need to be in tune with consumer needs.
How should you plan for a downturn, and should you even be marketing?
100 Years Of Economic Downturns
During the first weeks of March 2020, the world was plunged into a chaotic mix of fear, uncertainty, and doubt when a worldwide contagion led to a global pandemic. In one week (March 16, 2020), 3.3 million people filed new unemployment claims in the U.S., the most significant number of unemployment claims made in one week up to that point.
Moving forward to October 2023, businesses face the risk of consumer recession.
Historical research shows that companies that increase their marketing spend during economic downturns earn more profits and succeed as the economy improves. Companies must create demand during an economic recession and turn it into sales. Stopping marketing during a downturn is stopping that engine of growth.
Studies from the Great Depression (1929 – 1933), the Dot-com Bubble (2000 – 2001), the Great Recession (2008 – 2009), and the Pandemic Recession (2020-2022) reveal that companies that increased their marketing spend increased their profits from 4% to 340% over competitors that maintained or decreased marketing spend.
The benefits of increasing marketing spend include:
- Maintain bonds to the consumer
- Outpace competitors that are cutting spend
- Send messages about pivots or new solutions
- Communicate stability to customers
- Provide a real-time feedback loop from consumers to the business
Marketers who stay the course in economic slowdowns get access to once unattainable talent, discounts on hard goods, and better deals on advertising space.
As the economy reacts to changes in consumer preferences, so do the messages that marketers must send. In a good economy, consumers can be viewed with the assumption that if a product/market fit exists, a subset of consumers will buy. In a down economy, there are additional barriers for businesses to overcome with consumers, including fear, uncertainty, and doubt.
Consumers can be segmented by their emotional reactions to the economic environment. In other words, some consumers will value lower costs. Some consumers will stop all but essential spending. Others will spend on smaller treats. Yet other groups will take the recession day to day without significantly changing spending habits.
The astute business can deploy a marketing plan that speaks to the consumer’s newly changed preferences. The value proposition, pricing, means of consumption, and tone of voice must acknowledge and empathize with consumers and their emotional reactions to economic uncertainty.
Through iterative testing of marketing messages, businesses can quickly pivot and deliver messages that consumers resonate with. Through the use of data analysis, companies can understand immediate consumer needs. Businesses can streamline operations and lower costs through artificial intelligence and international workforces.
Finally, know that with change comes opportunity. As the U.S. left the Great Recession, new companies, business models, and personalities rose out of that time to build big businesses and change the world. These businesses changed how we work, who we work with, and how we communicate.
There are always winners coming out of challenging economic situations. Just like past downturns, innovation will be created out of necessity.
Your business can win during an economic downturn even if it hasn’t had a big win during better economic times if it:
- Reacts aggressively to changing consumer needs
- Capitalizes on marketing opportunities
- Act with empathy toward your customers
- Use real-time data to understand what the marketplace is telling you about your business
- Leverage opportunities to supplement your workforce with international talent and AI
Should your business be marketing during a recession?
Yes!
Research shows that companies should continue increasing marketing to grow during a recession. Higher profits and sales return when the economy picks back up. Marketing has the potential to exponentially grow business after a recession ends. While many companies will drop marketing spending, the astute ones will continue and thrive. A big reason for this outcome is the US economy has always rebounded from recessions.
Company Growth After The 1921 Recession
In April 1927, Roland S. Vaile, an advertising executive, published a review of multiple businesses’ performance in the Harvard Business Review after the 1921 recession. He compared the performance of companies that increased their advertising budget during the recession and those that cut their advertising budget. His study of 250 advertisers found that companies with the most significant sales increases came from companies that advertised the most. He measured performance by index, where 100 is the baseline. An index higher than 100 represents an increase, and an index under 100 represents a decrease. Companies that increased their advertising budget in 1920 showed a 21% increase in sales, or an index of 121, by 1924. Companies that decreased advertising reflected 97% of sales they generated in 1920. The disparity is 24% between the best and the worst companies
Ads Analysis During The Great Depression
A researcher at the University of Washington reviewed advertisements in The Seattle Times before, during, and after The Great Depression.
Before the crash, the newspaper ran 241 ads in 1928. In 1932, they ran 171 ads; in 1935, as America was climbing out, The Seattle Times ran 224. During these five years, the composition of food advertisers increased from 4% to 10% of ads. Tobacco and alcohol brands increased from .4% of ads to 3.6%. After the economy returned, tobacco and alcohol brands continued at that higher level of advertising.
Advertising for brands that were not essential decreased but didn’t stop. Fashion advertising dropped to almost half of ads in The Seattle Times from 40% to 21%.
Notably, in this example of the more significant trend, while there was juggling of ad spending across categories and brands, even non-essential brands continued their marketing push.
Company Growth After The 2000 Dot-Com Bust
In 1999, Tony Hiller and the American Business Media (ABM) looked at 1,000 companies in the U.S. and Europe that had either decreased, maintained, or increased their marketing spend during the recession. During the recovery, companies that reduced their spending showed a .08% profit decrease. Those who supported marketing spending increased their earnings by .6%, and those who increased marketing spend showed an average increase of 4.3% in profit. The same trend held for market share in the first two years after recovery. Decreased spending resulted in a reduced market share of .6%. The companies that maintained marketing spending increased market share by .9%. Companies that increased marketing spend resulted in a 1.7% increase in market share.
The Hiller / ABM study points to three core benefits of marketing during a downturn:
- By messaging during the downturn, companies maintain a share of mind as competitors go dark.
- Brand recognition remains if marketing stays on during a downturn and can get lost if there is no marketing during the downturn.
- The mere presence of marketing communicates sustainability, power, and confidence to the end consumer.
A study by Srinivasan, Rangaswamy, and Lilien published in the 2005 International Journal of Research in Marketing shows that firms that know how to deploy marketing before a recession, that are also entrepreneurial, and that have underutilized resources can improve their business performance during a recession. These firms show a “superior business performance even during the recession.”
Company Growth After The Great Recession
A 2015 study published in the Cornell Hospitality Quarterly looked at the effect of marketing expenditure compared to hotel profitability during The Great Recession. The results of the survey are based on a review of 416 hotels. The winners in the study commanded higher daily room rates and higher occupancy rates.
The winners were found to have spent more on marketing between 2007 and 2009, in the heart of The Great Recession.
If you are a business owner in the U.S. who has developed a business since 2011, you have been a recipient of one of the fastest-growing economies in America, as shown in this chart:
Over almost 11 years, from March 2009 to January 2020, the Dow Jones Industrial Average (a set of companies representative of the U.S. economy) increased 326%. During this economic period, many significant things happened, such as the rise of the gig economy, new consumption behaviors, new currencies, and new ways for people to communicate.
These innovations were precipitated by an economic downfall: from October 2007, when the market was at a high of 14,093, it dropped in March 2009 to 6,625, 47% of its value.
During this period, people became accustomed to riding in strangers’ cars. This behavior is far from the days of “don’t talk to strangers” and “don’t get into a stranger’s car.” Apps became the connection between consumers and service providers with the rise of the sharing economy. Some of the largest companies in the world don’t own the things they sell; instead, they connect people to others who provide a service. Workers across the globe can join for services in ways that were impossible 15 years ago.
After the Great Recession, the rise of blockchain and crypto-currencies allowed people and economies to thrive with the benefit of decentralization or trustless interactions. Just one example of the impact of blockchain is a look at Estonia, a country whose government services are offered 24/7 online with data integrity ensured by blockchain. Indeed, anyone who invested in the risky but advantageous Bitcoin currency as it ascended in value benefited.
Social media companies have changed the meaning of the words “friend,” “like,” and “share.” These companies have impacted the news we receive and the opinions that we form. Even companies that seem like fun toys and trinkets, like Twitter, often become invaluable in times of government strife, collapse, and turbulence.
What came out of The Great Recession (and the subsequent almost 11 years) was a booming America. Economic, social, and industrial changes created opportunities for many. The tools became available for the first time in history to start quickly and at scale, resulting in new opportunities for individuals and their communities.
Company Growth After Other Recessions
McGraw-Hill published a study of 600 manufacturing firms and their profitability after the 1981-82 recession. The study shows that firms recognized increased sales for up to six years after the recession. The firms that increased their advertising spending during the recession years realized a 270% increase in profit. In contrast, firms that cut their advertising spend in either of the recession years saw profits increase only 200%. While this study does not directly confirm causality, it does show a strong indication that advertising spend is at least correlated to future success.
Further, in the paper titled A Critical Review and Synthesis of Research on Advertising in a Recession, authors Gerard Tellis and Kethan Tellis write that:
Firms that increased advertising during a recession experienced higher sales, market share, or earnings during or after the recession. Most of the studies consistently showed that the strategy adopted for advertising during a recession had effects that persisted for several years after the recession.
What Came Out Of The Pandemic Recession?
Out of The Pandemic Recession, the world became accustomed to remote work, creating vast opportunities for companies that provide international knowledge workers. The move to remote work gives employees and employers new ways to build businesses across continents and time zones.
Even in the last 12 months, since November 2022, AI has emerged, giving consumers and businesses new ways to live. Contemporary art, new writing, new website creation capabilities, new ways of learning, and new ways of creating value arise from AI. Since the launch of Open AI’s Chat GPT, generative AI has set the foundation for value-driving business opportunities.
Opportunity exists in times of pressure and change. It is incumbent upon business owners to leverage these growth opportunities.
Top Advertising Agency
Brill Media is a top advertising and marketing agency, serving businesses with growth advertising solutions. The Brill Media team has grown thousands of businesses with $100MM+ in advertising campaigns.
Company Case Studies
The historical record shows that marketing is key to leveraging new technologies and staying in front of consumers during recessions, for the benefit of future growth.
Here are the stories of companies that thrived during recessions.
AirBnB
Joe Gebbia and Brian Chesky founded Airbnb in August 2007 as a way to create more income for themselves. Being unable to pay rent, they offered strangers a chance to stay with them for a fee.
At the time, the Dow Jones Industrial Average (DJIA) was at its local peak and about to drop. The economy was declining. Jobs were lost. Consumers cut back on spending.
All the while, throughout 2007, the business didn’t get any real traction.
A year after AirBnB’s founding, the DJIA was down 20% from its high, and it was about to fall off a cliff as Lehman Brothers collapsed in September 2008. The economy was already plummeting into The Great Recession (2007 – 2010).
The two founders saw an opportunity to rent their beds to three guests looking to attend a design conference in San Francisco. AirBnB made it possible to help people earn incremental income by renting out spare beds or couches to travelers who needed an inexpensive place to stay.
By August 2008, the company had three failed iterations of the business. They needed help finding product market fit or scalable business models. They just couldn’t get traction. To show for all their hard work was a binder full of maxed-out credit cards, $25,000 of debt, and bleak prospects for driving revenue, much less creating a lasting business. They needed something to keep revenue flowing.
The latest relaunch was set for the 2008 Democratic National Convention (DNC) in Denver in August 2008. Their site wasn’t making money, so they contextualized a novel marketing idea for the political audience attending the DNC: presidential cereal.
Each box was sold as a limited-edition box of either Obama O’s or Cap’n McCains that sold on the street for $40, netting them $30,000. This was a critical inflection point for AirBnB.
They had much-needed cash in hand to continue marketing their business.
With time and money, they invested in improving AirBnB. Rental owners needed to improve listing photographs. The rooms could have looked more appealing. The two founders went door to door in NYC to take better photos of their rentals. In just one week, the two founders increased AirBnB’s revenue to $400 / week. This boost in revenue was a small win, but they had traction.
Gebbia and Chesky faced multiple rejections from venture capital (VC) funders. They were eventually able to earn a $600,000 seed round investment from Sequoia Capital.
By 2011, Airbnb had grown and defined its product. They used search engine marketing internationally to grow their business. In addition to paid media, their international listings were helping travelers find rentals with the help of search engine optimization. Finally, they used Facebook ads to reach over 3 million likes, back when likes were important. AirBnB posted on Instagram and powered their YouTube channel with travel content. Airbnb posted on Twitter, blogs, and other social channels. The company offered referral rewards to spur word of mouth.
As of its last funding round, Airbnb was valued at $35B.
Key Takeaways
- Seek product/market fit as soon as possible
- Earn money any way you can to keep your business alive
- With your seed capital incrementally grow
- Surround your audience with marketing messages
De Beers
De Beers, the world leader in diamond manufacturing, faced a challenge during the Great Recession. How does a brand built on exclusivity and luxury market at a time when consumer spending is dramatically reduced? The answer is a change in their messaging.
Their research revealed that consumers perceive diamonds to retain their value in the long term. That insight was leveraged in the 2008 holiday season, when the company doubled its advertising spend with messages including “Here’s to less” and “Fewer better things,” because a “diamond is forever.” The company saw profits drop in 2009 and rebound 261% by 2011.
Decades earlier, it was De Beers who created the simple notion that diamonds are the inevitable gift that a man gives a woman when proposing marriage. This has not always been the case.
In 1938, while the US was still in The Great Depression, Harry Oppenheimer worked with an ad agency to make the practice of giving a diamond ring upon proposal as ubiquitous as apple pie.
The marketing plan set out to make giving a diamond ring the only symbol of romance by inserting that imagery into pop culture through movies, photography, and societal iconography. Diamonds can be harmed, turned to ash, chipped, and discolored, even though the repeated message we see about diamonds is that “diamonds are forever.” Between 1939 and 1979, De Beers’ wholesale value increased from $23MM to $2.1B.
Key Takeaways
- Use advertising at scale to reinforce a consumer idea that will create demand for your product
- Change messaging during recession to align with consumer values.
- Run advertising to assist in sales rebounding as consumers get back to spending money as the recession subsides
Foursquare
In the early 2010s, there was a magical moment when anyone could be the mayor of any place: sushi restaurant, pizza place, salon, or office address if you checked in on Foursquare enough times.
The game of friendly competition made Foursquare a popular consumer app that collected vast amounts of location data. The app was released in 2009 at South By Southwest (SXSW), a tech and entertainment conference.
The consumer app relied on the gamification of location activity. Check-in, get a badge, and sometimes retailers make special offers available. Mayors would get discounts, free food, and even recognition inside the place of business.
Foursquare growth accelerated in November 2009 when they opened their API to developers. The company learned from Apple that it was essential to create a developer community and an ecosystem of applications to power consumer adoption.
Within a year, the company opened a second office and crossed the 1 million user threshold.
Early company growth came from word of mouth fueled by the app’s release in new cities. Foursquare also ran press releases to garner attention. You can see their PR, publicity, and press release activities from the New York Times, Business Insider, Chicago Business, Gigaom, and HubSpot.
By 2014, Foursquare used outdoor advertising to increase interest in the app.
By 2019, Foursquare’s revenue surpassed $100 million.
As of 2023, they operate less as a consumer-facing app and more as a location data company. They have 120 million commercial points of interest (POI) mapped, powering some of the largest technology companies in the world.
Key Takeaways
- Leverage gamification and incentives to make mundane experiences fun.
- Create a platform for others to build on top of your technology
- Collect and leverage data for growth
- Leverage press releases and fun promotions to capture consumer attention
Instagram is a seminal tech story. What started as an 8 week build, during the America’s greatest economic downturn recession since The Great Depression, became a $1 billion exit two years later. At the time Facebook’s acquisition of Instagram was widely reported to be dramatically over priced. It was an excellent acquisition for Facebook, delivering Meta $51 billion in revenue in 2022.
The founders created a massive business while the financial world was burning around them. The app aimed at competing with location check-in company Foursquare. Originally called Burbn it allowed users to share updates about their day, check-in at locations, see stories that were around them, and keep up with friends.
The company’s internal usage data showed that active users were looking at, and sharing, photos. When Instagram streamlined its app to focus on photo sharing, its user base exploded. By 2015, they had 300 million users.
The company grew by leveraging the network effect of influencer advocates. Key influencers referred Instagram to their networks. In the first round of 25,000 users, a key influencer was Jack Dorsey, CEO of Twitter.
Other key influencers who were early to share the app included Kevin Rose, Founder of Digg, and Leo Laporte, a technology personality.
Just like with other technology startups, press played a role in gaining wider attention: TechCrunch, BusinessInsider, TheNextWeb, and Forbes.
Key Takeaways:
- Even in the worst economic times, create.
- Leverage your network to grow.
- Build relationships.
Netflix
Netflix existed before the Great Recession, launched in 1997 by Marc Randolph and Reed Hastings. For over a decade, they were in the business of shipping DVDs of movies to consumers.
During the Great Recession (2007 – 2010), the company thrived because it had a product consumers wanted, and they leaned into changing consumer behavior. Low-cost entertainment has become much more valuable to consumers.
In January 2007, Netflix launched a novel plan: allow consumers to stream movies directly on TV, making it unnecessary to deliver and return individual movies through the mail.
By 2009, Netflix gained 3 million subscribers.
According to their 2008 and 2009 annual reports, Netflix aggressively pushed for consumer growth with online promotions, banner ads, text ads, email marketing, TV and radio ads, and direct mail.
In 2008, Netflix spent $199 million on marketing and increased that spending annually. Performance advertising was instrumental to customer acquisition. Instead of running advertising to build the Netflix brand, they were delivering messages asking consumers to sign up for Netflix immediately. They incentivized immediate signups with discounts.,
Netflix’s increasing subscriber count helped usher in a golden age in content development as Netflix led the way in funding for series and movies. Consumer spending had declined due to the economic downturn, so viewers turned to less expensive entertainment sources, with Netflix benefiting from this shift.
However, the increased subscriber count didn’t continue in a straight line. In 2011, the company lost 800,000 subscribers of its 23.8 million, depressing the stock to 25% of its value.
Image courtesy of UXTimeline.com
The reason for the subscriber loss was customer cost-cutting. Since the massive decline in 2011, when the stock was trading at $9.12 in November 2011, the stock has increased in the years since to $432.36 in November 2023, representing a 46-time increase in shareholder value. Today, the company has 247 million subscribers worldwide and 77 million in the U.S.
As of November 2023, Netflix has a market cap of $174B. Not surprisingly, this is one business that soared during the Pandemic Recession, with market cap reaching as high as $274B in September 2021.
Key Takeaways
- Offer low-cost products to customers during recessions
- Innovate with technology when available
- Drive consumer acquisition aggressively
Snapchat
Snapchat launched in 2011 with the idea of passing a temporary message between friends. This innovation developed as Facebook was restricted in schools, and older audiences were aging up Facebook. Kids needed a new platform of their own, away from parents. If Facebook was the place to keep friends and family updated, Snapchat was the place to share fleeting ideas.
The first version of the app was called Picaboo and launched with 127 users.
The critical growth element for Snapchat is word of mouth about the app among people close to the business. People, including Melissa Spiegel, co-founder Evan Spiegel’s mom, helped spread the word about the app to her niece and her high school friends.
Technology press played a role in crafting the Snapchat Story. In 2012, NYTimes reporter Nick Bilton published a story about teens and their indiscreet photo sharing on Snapchat. That story did two critical things:
1. It solidified the narrative for many years that Snapchat was a sexting app, which Snapchat worked hard to dispel
2. Alerted teens about Snapchat.
Around that time, there was a flurry of articles about Snapchat that created momentum about the business from TechCrunch, The Guardian, TheNextWeb, Forbes, and Bloomberg.
Despite the negative press from an adult’s perspective, the buzz around Snapchat made the app an appealing place for children looking to rebel from their parents.
In 2023, the company touts a market value of $18.3B.
Key Takeaways
- Solve for unmet market needs
- Your network is your net worth, so enroll people close to you to seed your business among larger populations
- Use press, even the seemingly negative press, to your advantage.
Square
Square launched in 2009 as an adaptable 1-inch card reader to help artists and non-traditional vendors accept credit card payments.
They recognized a problem. Many Americans were lining up to use their credit card instead of cash. Many small vendors, salons, food trucks, and pop-up stores needed help to afford the expensive credit card setup costs that larger retailers could. This changing consumer behavior left non-traditional businesses at a disadvantage when accepting payments.
Upon launch, Jack Dorsey, CEO of Twitter and Square, listed “140 Reasons Square Will Fail,” which he distributed to potential investors across Silicon Valley.
The list addressed the naysayers and overcame their objections.
Towards the end of 2009, Square raised $10MM in funding.
Three years later, Square had a valuation of $3.2B.
Square used content marketing to share the stories of its customers. The team used influencers and niche marketing tactics to reach potential customers in specific industries most likely to use Square, such as beauty shops and food service providers.
The strategy was simple: fuel word of mouth among crucial influencers, make the customer the hero and speak to the needs of individual industries.
By May 2017, Square had processed $53B in transactions in the prior 12 months.
Key Takeaways
- Solve a challenge based on changing consumer habits
- Use your own experiences as a testing ground for new products
- Leverage your network
- Create discovery opportunities among key influencers
Uber
Uber was started in March 2009 while America was still in The Great Recession, though the economy was improving.
According to the Uber history page, founder Travis Kalanick couldn’t find a ride in Paris in the dead of winter in December 2008. He was attending a tech conference called LeWeb, where “revolutionaries gather to plot the future.” With this inability to get around, he thought it would be helpful if there were an on-demand limo service available on his phone.
By early the following year, he and his friend, co-founder Garret Camp, created an UberCab app. It was an accessible limo service. The initial thought was that people with affluence would want luxury limos at any time.
The idea ultimately morphed into a less premium version, where everyday people can get into someone else’s car and get a ride to their destination. Uber launched in New York.
They demonstrated their app at the SF App Show in 2010 and soon after launched their service in San Francisco, gaining popularity. By May of 2011, they expanded into New York.
By October 2012, they were in 20 cities, including Paris, Toronto, and London, and over 1 million customers.
To get to these growth milestones, Uber expanded city by city rather than many cities at one time. Each location had its intricacies that needed addressing. Individuals went into each city to set up suppliers and car services to ensure a high-quality experience.
The company focused on restaurants, nightlife, holidays, events, weather challenges, and sports to accelerate consumer adoption. In these examples, driving one’s car created challenges Uber could fix.
There were five categories of marketing that Uber deployed:
Advocacy among early adopters
- Ask early users to spread the word about Uber and incentivize that word of mouth with referrals.
Referrals
- Pay people to share Uber with their friends
Reviews
- Through word of mouth and on the app, Uber thrived on reviews because the experience of getting into a stranger’s car on purpose was so new to most consumers.
Like AirBnB, Uber took action with novel marketing approaches to create attention for the business.
In 2012, Uber rolled out pop-up mariachis to celebrate Cinco de Mayo.
In 2013, to celebrate Valentine’s Day, Uber riders could request #RomanceOnDemand, which included roses and a custom card.
In 2015, Uber let riders play with kittens for 15 minutes on National Cat Day. As the company has grown, they have used app install advertising campaigns to reach new customers.
Today, Uber is a massive company with services across the globe.
As of October 2023, Uber has a market capitalization of $84B, 2.3 times higher than its market cap in March 2020 of $36.77B. Uber remains the leader in ride-sharing.
Their early growth came from event sponsorships, influencer marketing, and supporting advocates. For press and publicity, Uber developed fun marketing stunts.
Like other companies created during recessions, Uber benefitted from “less competition, less capital available, and more time to innovate.” Regarding Uber, an early seed investor says, “You want entrepreneurs responding to the challenge, being creative, working hard, and taking quick decisions are key traits for founders who are grabbing the bull by the horns.”
Key Takeaways
- Solve your real-life challenges
- Incentivize usage
- Be willing to change your business to it appeals to a broader market
- Look for novel marketing ideas that will capture attention
- Demonstrate your product to anyone willing to listen
Vayner Media
Gary Vaynerchuk is an entrepreneur, marketer, motivational speaker, and leader in the advertising community. In 2009, after stepping away from his father’s liquor business, he created VaynerMedia in the conference room of another company’s office, Buddy Media, founded by Mike Lazerow. VaynerMedia offers social media marketing services, social customer service, and content development.
Gary helped build his father’s liquor business from $3MM / year to $60MM / year by leveraging newly available digital and social media channels. One example of his work is Gary’s daily wine show, Wine Library TV on YouTube. The first episode aired in February 2006 when YouTube was a burgeoning video platform. The show took off in July 2007 when he appeared on the Conan Obrien show.
So, Gary went into The Great Recession with a vision for his new business, prepared with the skills to grow it and the relationships to nurture it. Notably, he didn’t receive any payout or equity from the growth of his father’s wine business, so budgets were tight.
Gary invested early in Facebook and Twitter with money he’d saved while working for his father.
By 2009, he had assets:
- Credibility in the tech startup investment world
- Practitioner expertise in social media for business growth
- The gift of being an engaging speaker
VaynerMedia started when ESPN invited him to talk about Twitter. They asked him why he had more followers than Disney’s properties.
Growth came from
- building on existing relationships
- being able to have insightful conversations about the practice of social media
- The ability to find the right operational people to handle day-to-day business.
Today, VaynerMedia is a $188 million creatively driven marketing company. Gary continues to pioneer the development of personal branding with the continued success of his speaking engagements, his podcast DailyVee, and ongoing social media content posting.
The following principles drive marketing for GaryVee:
- Empathy for people and circumstances is key
- Go where the attention is today and leverage those platforms for growth
- Create opportunities for long-term success by being valuable to others
- Create lots of content with minimum levels of quality
- Develop content that is contextually relevant to the audience on the platform
These principles are both espoused and demonstrated directly in the content GaryVee creates. In other words, for an excellent content development framework, follow Gary Vee’s actions and mimic them.
Key Takeaways
- Become an expert at something valuable now, or that has the potential to be beneficial in the future
- Save money for the future, and live under your means
- Get good at enrolling people into your mission
- Allow helping hands to help you
Grant Cardone
Grant Cardone is a real estate investor, sales professional, and motivational speaker who almost lost it all during The Great Recession when he was $50 million in debt.
He was a millionaire before the Great Recession, losing much of his wealth as the markets declined in 2007 and 2008. Though he made conservative property investments before the downturn, property values fell so much that banks asked him to repay his $50 million debt.
During the downturn, Grant understood four key points that would help him rebuild:
- Businesses need attention before people will buy
- Social media was a new attention-gathering medium
- To gain attention businesses need to provide valuable information
- To scale attention-gathering systems, businesses need a team
He focused on building his brand as a conduit to building wealth. More name recognition would make it easier for people to buy from him. Grant used social media to grow his following by creating valuable educational content about sales and real estate. During the Great Recession and in the aftermath, he published books that improved his brand:
- 2008
- Sell To Survive
- 2010
- If You’re Not First, You’re Last
- 2011
- The 10X Rule: Sell or Be Sold
- The Closer’s Survival Guide
Sell To Survive was self-published, which gave him control of the edits, the design, and, most importantly, the sales and marketing.
In interviews, Grant says he does not write books for audiences. His books are written to help him sort out his thoughts on business and entrepreneurship.
Today, Grant is the CEO of Cardone Enterprises, with services ranging from sales training to real estate development and business education. He has a $750MM net worth.
Grant survived The Great Recession by:
- Making conservative financial decisions before the downturn, allowing him to survive when others didn’t
- Creating new means of earning revenue by selling his books, using his innate sales skills, which is also one of the skills he’s known for
- Leveraging social media channels to build himself up
- Demonstrating growth comes with consistent attention-demanding content creation.
Key Takeaways
- Use new technology to gain on your competitors
- When times change, there is an opportunity to build wealth
Kellogg's
In the 1920s, Post Cereal was battling Kellogg’s for dominance in the morning cereal market. Americans were just getting used to having additional options from the two breakfast staples: oatmeal and cream of wheat. When the Depression struck, Post predictably cut back spending, and Kellogg’s doubled its ad spending to push its new cereal Rice Krispies.
By 1933, still in The Great Depression, Kellogg’s profits increased almost 33%, and it had solidified its position as the dominant cereal manufacturer in America.
In 2023, Kellogg’s brings in $15 billion in annual revenue. Post receives only $5 billion in yearly revenue.
Key Takeaways
- If you want to gain market share against your competitors, accelerate your marketing even when they slow down their marketing.
- Don’t do the predictable thing of cutting costs during a recession
- Advertise new products that respond to consumer needs.
Nabisco
During The Great Depression, radio advertising hit its stride. From 1929 to 1939, the combined revenues of radio networks increased from $18.7MM to $80MM. The rise of radio during this period corresponded with the creation of some of the most well-known ad agencies in the world to help brands figure out radio.
McCann-Erickson launched to advertise Nabisco. Leo Burnett was found to handle Minnesota Canning Co (makers of Green Giant Pees, renamed Green Giant Company in 1950, and merged with Pillsbury in 1979), and Young & Rubicam serviced General Foods (now Kraft).
Until the Great Depression, Nabisco had a long history of selling crackers under Uneeda Biscuit. In 1934, they created a new brand of cracker to give struggling Americans a small premium luxury treat that anyone could afford. This brand, Ritz, became the world’s largest-selling cracker in three years. Nabisco relied heavily on advertising and radio to reach consumers with novel messages.
Ads tutored customers on using crackers as fillers to stretch more expensive products, assuring insecure customers that thriftiness was a proud food choice used by all Americans.
Key Takeaways
- Leverage new media and new practices to reach customers
- Create new products and positioning to reflect customer needs
- Use advertising to get your message out to the public at scale.
Proctor and Gamble
Proctor and Gamble (P&G), the company behind many daily products we buy today, including Pampers, Downy, Tide, Bounty, Gillette, and Old Spice, created one of the most indelible marks on the entertainment landscape.
During the Great Depression, P&G created the soap opera, programming designed for middle-class families sponsored by soap brands. The show As The World Turns, which ran for 54 years to 2010, was one of 20 shows produced by P&G.
P&G’s first soap sponsorship was “Ma Perkins,” a radio show by Oxydol. According to the official history of P&G, the strength of the sponsorship led “P&G brands to sponsor numerous new ‘soap operas.’ Faithful listeners became loyal buyers of P&G brands at the grocery.”
That one successful sponsorship paved the way for decades of soap operas sponsored by P&G. By 1929, it produced 21 different shows, and by the 1940s, P&G started its own production company.
Because the company created a novel new marketing opportunity through soap operas, P&G thrived during The Great Depression.
Key Takeaways
- Content is always king
- Messaging frequency builds relationships
- Entertained customers will continue to buy your products
- Look for new and novel ways to grow consumer attention
Domino's Pizza
Domino’s Pizza launched in 1960. It was a well-known brand, but it was known for the wrong things. It wasn’t a beloved brand when the economy slowed down in 2009.
They were “under siege for its lousy food and mediocre service.” When the economy slows down, value options, including pizza, will thrive just by directly because consumers are looking for lower-cost options. So, their poor perception was a big problem. To combat the poor perception, they fundamentally changed their business with the leadership of Patrick Doyle, who took over as CEO in 2010. The company focused on three key areas:
- Taste
- Technology
- Marketing
Arguably, the most significant change came when they changed their pizza recipes. Domino’s developed new pizza recipes with “richer, spicier sauce, tastier cheese combinations, and a buttery crust with garlic and herbs.”
The company created a pizza tracking app that dramatically improved communication with customers.
One of the biggest concerns customers have when ordering pizza is whether the phone order is recorded correctly. To solve this, the Domino’s app, for the first time, gave the customer a way to track every step of the process, from the order to the knock on the door.
Finally, the comapny’s marketing campaign was bold, directly addressing the poor taste of their pizzas, with ads showing honest consumer reviews of their pizza. Ads heard consumers describing Domino’s as “worst pizza I ever had,” “the sauce tastes like ketchup,” and “the crust tastes like cardboard.” Their ads presented an honest look at consumer perception, and paid off with the various changes they made.
The marketing initiative included
- a custom website: Pizzaturnaround.com
- The Twitter hashtag #newpizza
- A YouTube video documentary
- Ongoing social media engagement between the brand and consumers
In 2008 the company recorded US sales of $3.03B, almost flat compared to 2007 US sales of $3.037B. In 2010 the company realized sales of $3.316B in the US, a 9% increase in sales as they rolled out a completely new product and marketing.
Dominos increased market share from 9% in 2009 to 15% in 2016.
Key Takeaways
- Scale up your advertising messages to reach consumers with new offerings
- Deliver messages that honestly reflect consumer perspectives
- Seek to change negative perception with high reach and frequency campaigns that reach the majority of your target audience
- Innovate to alleviate customer concerns about your product
Salt & Straw
Who wants pear and blue cheese ice cream?
Kim and Tyler Malek started Salt & Straw at the height of the Great Recession from a little cart in Portland, Oregon. Their ice cream cart was successful, partially due to its unique flavors, like bone marrow and smoked cherries.
In 2008, the duo began talking to banks, pulling money out of retirement, and creating a network of support to build the business.
By 2011, they opened their first store after their pushcart had acquired substantial word of mouth due to the high-quality ice cream and unique flavors.
On the Faces of Marketing podcast, Kim says that:
- marketing starts with a strategy
- The strategy builds a brand,
- A brand is a way of making people feel certain things related to your business
- Marketing speaks to those feelings.
The brand Salt & Straw is defined by Kim’s commitment to creating a community gathering place and crafting a solid customer experience, led by the company’s artisan ice cream flavors that change monthly. “Every single flavor of ice cream on the menu when we opened had a person behind it that we worked with, and we could tell that story.
Salt & Straw posted on social media early on, with their first photo on the official Salt & Straw page showing a recipe, a kitchen, and a bucket full of ice cream in the recipe creation process.
According to Kim, Salt & Straw does much marketing, relying on PR and social media in the early days.
They posted on Instagram and Facebook and connected with content creators on YouTube starting in 2012. The local news covered their launch, which was featured on their Facebook page. By all appearances, marketing, brand building, and creating a stellar product are all different facets of the same creativity that drives a person to launch a business.
Key Takeaways
- Test your product inexpensively, and then grow if you have product/market fit.
- Make customers feel something positive about your business
- Use the community to build your business
- Leverage inexpensive social media and public relations opportunities
Smashburger
This chain serving delicious burgers launched in 2007 in Denver, as the economy was tanking. Their burgers are differentiated by their style of rolling chopped Angus beef into balls and then smashing them on the grill, made to order.
The company thrived during the recession for a few reasons. First, their offering fell directly in line with changing consumer habits. Consumers were looking for lower-cost food options. Their concept made burgers a little more interesting. Smashing the thin burger patty on the grill almost instantly caramelizes the patty. They also offer unique menu items regionally.
The company identified 14 different types of consumers it served and marketed to them primarily with social content posting, local marketing, and word of mouth. Their word-of-mouth and influencer marketing tactics are based on finding locals on Twitter, Yelp, and blogs that will create content in exchange for an invite to eat at Smashburger. Having a fun story to tell helps make the Smashburger story shareable among influencers.
By 2012, with 160 restaurants, the chain launched its first large-scale marketing push, including TV and radio, to drive trials and generate repeat traffic to its locations.
To create new customers and gain their loyalty, Smashburger promoted their Smashpass, an offer allowing pass holders to order an ala carte item free once a day for 100 days.
By 2017, the restaurant chain had 380 stores in 38 states and nine countries.
In 2018, Jollibee Foods Corporation, a Philippines-based company, acquired 85% of Smashburger and continues to fund its international growth.
Key Takeaways
- Segment your audience and speak to them
- Let influencers tell your story
- Create a fun story for your customers to tell
Chrysler
During The Great Depression, Chrysler launched the Plymouth brand, going head to head with Ford and Chevrolet, the dominant car manufacturers of the time.
Up to that point, Chrysler was the third player in the US for car manufacturing. Plymouth was Chrysler’s first offering for low-priced cars. During economic downturns, consumers are seeking lower-cost options. By 1933, Chrysler had overtaken Ford, becoming the #2 manufacturer in market share. Plymouth sales were a bright spot among other dimming prospects for Chrysler.
To grow the brand, Plymouth advertised in newspapers with copy-heavy descriptions of the car, the manufacturing process, and personal messages from Walter Chrysler. With a revamp of their advertising campaign in 1932, Plymouth’s share of the low-priced car market jumped from 16% in 1932 to 24% in 1933.
Key Takeaways
- Give consumers lower-priced options during recessions
- Advertise your business to get the message out
- There is opportunity in times of change
De Beers
De Beers, the world leader in diamond manufacturing, faced a challenge during the Great Recession.
How does a brand build on exclusivity and the luxury market at a time when consumer spending is dramatically reduced? The answer is a change in their messaging.
Their research revealed that consumers perceive diamonds to retain their value in the long term. That insight was leveraged in the 2008 holiday season when the company doubled its advertising spending with messages including “Here’s to less” and “Fewer better things” because a “diamond is forever.” The company saw profits drop in 2009 and rebound 261% by 2011.
Decades earlier, it was De Beers who created the simple notion that diamonds are the inevitable gift that a man gives a woman when proposing marriage. This notion has only sometimes been the case.
In 1938, while the US was still in The Great Depression, Harry Oppenheimer worked with an ad agency to make giving a diamond ring upon proposal as ubiquitous as apple pie.
The marketing plan set out to make giving a diamond ring the only symbol of romance by inserting that imagery into pop culture through movies, photography, and societal iconography. Diamonds can be harmed, turned to ash, chipped, and discolored, even though the repeated message consumers see about diamonds is that “diamonds are forever.” Between 1939 and 1979, De Beers’ wholesale value increased from $23MM to $2.1B.
Key Takeaways
- Use advertising at scale to reinforce a consumer idea that will create demand for your product
- Change messaging during the recession to align with consumer values.
- Run advertising to assist in sales rebounding as consumers get back to spending money as the recession subsides.
What Do These Companies Have In Common?
A brief analysis of these companies shows that marketing can be as scaled up or down as appropriate for businesses. Sometimes marketing is deployed to reach a large group of customers with broader messaging strategies. Other times, marketing is very narrow, with the intention of influencing hundreds of key stakeholders. These companies demonstrate that marketing can be deployed effectively during economic downturns by:
- Social media content posting to capture free attention
- Influencer marketing to generate word of mouth
- Press and PR to tell long-form stories about the business
- Advertising to reach a specific consumer audience
- Promotions
How To Grow During Recessions
Realign Your Business
When the economy slows down, the undeniable human instinct is to hoard cash if the economy worsens.
But as you see, many companies succeed while the economy drops. In doing so, companies cut nonessential costs, lay off employees, and limit expenditures. Startups take significant risks to create new ideas that leverage current customer attitudes and preferences.
Often viewed as a cost center, marketing gets largely slashed or stopped altogether. The irony is that marketing drives attention. Attention drives consideration. Consideration leads to purchases. So, by controlling marketing, the company is preventing the engine that will grow the business and counter the economic uncertainty.
With every change, there is opportunity.
When consumer purchasing power is reduced, businesses must adapt. During the Pandemic Recession, six types of businesses were immediate wins:
Comfort Businesses
Examples: Amazon
Comfort is anything that will help a person feel OK with stressful world events. This includes spirits, cannabis, indulgent food, convenience, and any home materials that make stay-at-home orders easier to bear.
Entertainment Businesses
Examples: streaming platforms, including Netflix
Entertainment speaks to ways to pass the time, including board games, video games, streaming content, and traditional media.
Health and Safety Businesses
Examples: Mask manufacturers and cleaners.
Anything that keeps a person safe and secure, including medical, insurance, alarm security, and preparedness measures.
Online Communications Businesses
Examples: Zoom and Microsoft Teams
Anything that keeps people genuinely social on social media, e.g., internet connectivity, webcams, online meeting tools, e-learning, and productivity tools.
Staple Businesses
Examples: Instacart and Uber Eats
This is what people need to live, including food, shelter, medical, and clothing. Food delivery and restaurants live in this category and the comfort category.
Essential Business-to-Business (B2B)
Examples: Shopify and Adobe
Any service that helps companies improve in the current environment, including IT consulting, technology solutions, legal consultation, marketing, and work-from-home solutions.
For more Pandemic Recession winners, read this article from Financial Times entitled Prospering In the Pandemic: The Top 100 Companies.
Aswath Damodaran, NYU professor and guest on the Professor G Podcast, shares that companies that fit the following financial criteria are also good bets:
- Ability to scale operations up or down as demand ebbs and flows; think Tesla with fewer manufacturing locations than GM or Ford
- The more people-centric the company, the more it will be affected by stay-at-home orders, so non-people-centric companies are good.
- Companies with high levels of cash that can buoy against tough times
- Companies offering products that are not discretionary because discretionary spending is affected by the current malaise, such as travel and luxury goods
- Companies with low debt, because as debt payments come due, lower product demand will make settling those debts harder in the short term
- Companies with lots of cash can and will buy other companies “for pennies on the dollar.”
On the last point, as of March 18, 2020, Disney had a market capitalization that was three times higher than the entire airline industry ($154B) at that time. All of the airlines in the U.S. were worth $51B. In another example, advertising technology The Trade Desk was, in March 2020, worth more than American Airlines, Macy’s, and Gap combined.
If your business is in one of these industries, and you could pivot into them during the Pandemic Recession, that would have been a good bet. Whether you are riding or staying the course, marketing is essential to remind buyers that you are in the market providing services people want.
Market Your Business
1. Decide If You Should Market
In making this decision, ask some tough questions, some of which you should have done before the economic downturn.
Do you have a product/market fit? In other words, do people want your product or service at the price point you offer? If your marketing messages generate new customers, you may have a product/market fit.
Do you have a marketing strategy? This plan will help you understand how to achieve your business growth goals and know when you are successful.
Do you have the money for marketing? You are in a good position if you can withstand a few months of higher outlays than income tied to your marketing. During a recession, people are less interested in buying, so you may have a more challenging time to sell.
Do you first need to pivot your business? If so, marketing can be used to find faster product/market fit through creative testing offers and products for your customers. But, during this process, you’ll need cash to fund these tests.
2. Understand Immediate Customer Needs
In times of uncertainty, keep an eye on the cause of the economic challenges. Keep track of the news, especially as events unfold, and rely on reputable news sources and trade publications.
For example, at the start of the pandemic recession, there was an uproar about Airbnb’s decision to give cancellations to vacationers who revoked the property owners’ cancellation policy, effectively causing property owners to bear the financial burden of those cancellations. An astute marketer, insurance business, management company, or other service can sweep in on this opportunity to offer a solution of reassurance to the aggrieved parties.
In March of 2020, many people were newly unemployed. A company that could match the freshly unemployed with businesses needing experts could unmask a new opportunity.
Likewise, experts pivoted to social media to reach new people, create goodwill, and provide their valuable knowledge to those who need it for free. Reference Gary V and JT Foxx.
3. Change Your Marketing Segmentation
When the economy is strong, there is an underlying psychological assumption about consumers: they will buy. Certainly, then, there is the segmentation of that consumer: over or under 25, male or female, high income or low, and many others. In the modern marketing world, customer segmentation can be much more granular, such as people in the market for Oreos, chief information officers as business decision-makers, and people who own a Nintendo Switch and are interested in racing games. The underlying foundation that people will buy holds true.
During an economic malaise, different consumer assumptions have to be made, which revolve around scarcity, panic, and basic needs. There are four groups:
Slam-on-the-brakes.People who are immediately hit hard financially. They reduce spending and buy only the essentials because they are anxious about the present and the future. For the Pandemic Recession, these were people in a high-risk health group, either immune-compromised or over 65, or recently laid off.
Pained-but-patient. This group sees a possibility of a good future in the long term but is concerned about the near term. With worse news comes a likelihood to become the slam-on-the-brakes segment. These are people with savings who see their retirement accounts lowering in value. But, because they have another 20-30 years for the market to recover, and they may be employed, this is a stressful moment, but not the end of the world.
Comfortably-well-off. This group can ride out the economic uncertainty. These are people in the top 5% income bracket, and so generally don’t have an issue.
Live-for-today. These consumers carry on as normal but may need to catch up on large purchases. They remain employed. They have liquid cash, and the downturn doesn’t dramatically impact their economic situation.
These audiences are intersected with four purchasing categories:
Essential products to keep their lives moving forward
Treats and indulgences that can be justified
Postponable items that are wanted, but the purchase can be postponed.
Expendable items that can’t be justified
Each person has a different view of the items in each category, with some exceptions. Food, clothing, medical, and general comfort products will be essential.
The expendable items are going to be expensive luxury products.
Below are are examples of products in each category during the Pandemic Recession:
Essentials: medications, grocery market food, streaming entertainment, and home security
Treats: Starbucks coffee, flowers, burgers from Tommy’s, and gaming devices
Postponables: home buying, travel, concerts, and a new laptop
Expendables: Gucci belt, a yacht ride, diamonds, and new furniture
Everything else is up for grabs. Small purchases become bigger purchases. Speaking anecdotally, a beautiful sunset becomes much more important when there are pandemic stay-at-home orders. A new iPad Pro with the ability to draw using the Apple Pencil may be an indulgence to some, expendable to others, and comfort to yet other groups. Comfort in the form of premium Haagen-Dazs ice cream and Cadbury Easter Eggs is great for some, while a simple run around the neighborhood is necessary for other more exercise-inclined people reeling from gym closures.
Context and meaning change.
Businesses must account for this new world and new consumer mindset, and act with the consumer in mind.
4. Create a Marketing Plan
The fastest way to fail is to take action without a plan. Answer these questions.
- What do you want to happen when you market?
- What do you think will happen in the best-case and the worst-case scenarios?
- What can the marketing campaign teach you so that the campaign is both a way of driving business and also informing your business?
- Who will you reach (age, gender, interests, media consumption habits, recent purchases, lifestyle)?
- How will you reach them?
- How often will you change the messaging?
- What product, price point, and messages will you send out?
- How are you helping the customer?
- What are your business economics, such as customer acquisition cost, cost per lead, and average order value?
Marketing will iterate, learn, optimize, and push your business forward. Your marketing plan should have a defining set of expectations and a plan for how to achieve those key performance indicators.
Some marketers, during a downturn, will want to influence immediate purchases. Others want to build brand for when the economy turns around.
Once your business has answered the questions above, define the strategies, tactics, promotions, and messages that you will use to achieve your goals.
5. Define Your Value Proposition
Who are your customers, and what do they want from you? This is the age-old question; the answers get redefined during an economic downturn. If you don’t know your value proposition in this new economy, you can get help by asking your customers to give you feedback. This feedback comes from customers engaging with your ads and marketing efforts. You can redefine how your brand brings them value through either money savings, comfort, dependence, reliability, entertainment, or discretion. Do this by running advertising and marketing messages with multiple variations and identifying which variable resonates most with consumers. These variables can be:
- Messages
- Price points
- Offerings
- Multiple ways of product consumption
For businesses that don’t sell effectively during an economic downturn, their messaging can turn to:
- Smaller-sized products or more minor spending levels
- Lower-cost items
- A new brand that costs less
- Low-cost financing
- A do-it-yourself version of the product
- We’ll get through this together
- Depend on us
- Works in any economy
- Value booster
If your product can be a treat or indulgence, language can include:
- Reward yourself
- Morale boosters
- Because you are worth it
- Because you are x (e.g., a survivor, a warrior, a leader, a mom, a parent, a teacher, employed, unemployed, staying at home, cooped up, doing the right thing, flattening the curve)
For products that are luxuries or in some way expendable, or for consumers who are comfortably well off:
- Focus on brand, quality, and exclusivity
- Enable discreet buying so customers are not flaunting
- Don’t miss out
For the folks who are living for today:
- Raise awareness
- You can’t live without it
- Seize the moment
- Quality of life improvement
Promotions are a part of this value proposition. Consider the following:
- Cash back on purchases
- Improve or introduce loyalty programs
- Introduce a lower-cost product or promotion
- More, more significant, or better loyalty programs
- Give away more for free
Give your loyal customers special perks. Even though they may not buy as much, they continue to believe they’ll be back when the economy improves, and in the meantime, they’ll be your evangelists. Consider featuring your customers in marketing messages and allowing them to be the star of your marketing activities. This will make them feel good and give them more reason to be deeply connected to your business.
During the Pandemic Recession, adAge writer Lyndsey Fox said that “we are now connectors and protectors” as brands and individuals.
6. Incorporate Overarching Societal Changes Into Messaging
When consumers feel vulnerable and uncomfortable with economic prospects, it is time to discuss empathy, safety, and risk aversion. Brands must send messages reinforcing their understanding and empathy of the consumer situation. Reliability, durability, perseverance, safety, reassurance, performance, longevity, and togetherness will likely be strong messaging bets during economic uncertainty.
A light touch helps in this moment. Words like “unprecedented,” “unbelievable,” “crazy,” and “uncertain” are undoubtedly descriptive, but for consumers, they aren’t necessary to communicate that things have changed. Consider staying away from directly referencing “recession” in your marketing messages. Most consumers are aware of the state of the world.
7. Determine Your Marketing Channels
You can find some precious deals during downturns, depending on your circumstances. You can work with exceptional talent who are unemployed.
Secondly, advertising space is usually underpriced during a recession, and the most robust channels are digital: search, social, display, and connected TV.
Decide how to allocate your time and money to grow your business.
Determine Your Marketing Channels
There are many different opportunities to spend your time and money growing your business. Here are some guidelines.
When To Run Advertising
Ensure advertising is in your marketing mix if you need the most direct, targeted, and attributable method to drive sales.
When To Run Social Media
If you want to save money and grow slower, with a 6-12 month horizon, get good at creating posts that resonate with your audience.
When To Work With Influencers
If your product or service can benefit from someone with an audience talking about your business. Influencers are mainly used for B2C, but some B2B businesses work with influencers.
When To Run Other Channels
Certainly, SMS texting, email marketing, landing page optimization, conferences, trade shows, and search engine optimization have relative importance to business growth. Ideally, you’ll want to deploy the right mix of marketing efforts to grow your business. The question really needs to be which marketing efforts you should run. It’s about combining efforts that work for your unique business needs.
If you focus on advertising, there are still many decisions to make. Let’s look at the overall advertising landscape.
- Search: $118B
- Social: $72B
- Display: $62B
- TV: $61B
- Out of Home: $9B (inclusive of traditional and digital)
- Influencers: $5B
Statistics: Search, Display, Social, Influencers, TV, Out Of Home
Not surprisingly, Google and Meta are the most trusted platforms for ad spending in the US, taking up 49% of all US ad spending in 2023.
Not surprisingly, Google and Meta are the most trusted platforms for ad spending in the US, taking up 49% of all US ad spending in 2023.
How To Think About Advertising Campaigns
Digital advertising is the chosen method of growth for many businesses. In fact, on Meta alone, there are 10MM businesses, primarily small businesses, advertising on the platform.
- You can scale spending up or down quickly.
- Get fast insights about your business.
- It’s inexpensive to create digital ads with images and banners.
- Data is your friend and is abundant for optimization.
- There is a compelling precision audience targeting.
- You will know when your advertising is having an addressable impact on your business.
- The next-largest medium is in decline: TV.
- The combination of digital targeting and big-screen TV media consumption can be delivered with connected TV ads by targeting Roku, Hulu, Pluto TV, Tubi, and other ad-supported streaming platforms.
- You pay based on supply and demand, so you pay less if you target a broader audience, and you pay more if you target a narrower audience.
- Algorithms assist with your campaigns, letting businesses leverage vast and valuable consumer data.
- Campaigns can be routinely adjusted and changed based on your business needs.
- Advertising is a real-time focus group to understand what customers want from your business
Ad Examples
In this section, we’ll demonstrate brands that are took these marketing messages to heart during the Pandemix Recession.
During the Pandemic Recession (2020), brands put into place marketing efforts to reach consumers with messages reacting to a dramatically changing consumer environment.
The commonalities across brands include:
- Messages contained positivity in the wake of an uncertain future.
- Brands delivered multiple ad messages with slight variations to determine the best ad messages to run.
- Brands offered discounts.
- Businesses maintained continued consumer outreach for business-to-consumer (B2) and business-to-business (B2B) companies.
The marketing messages below were captured in March 2020.
Hersheys
Message: Product and brand
Hersheys ran creative tests. Notice the two ads have the same image and different Facebook primary texts. This is a great way to understand your all-star ad creative.
Papa John’s Pizza
Message: We’re open
Obvious in normal times, but during stay-at-home orders, it had to be noted. Also note the creative testing of different offers.
HP
Message: Savings
Dynamic creative testing is a powerful way to determine what your customers want from your business.
Jira Software
Message: Discount
Even during business uncertainty Jira maintained its discount offer to keep B2B clients prospect to Jira.
Curacao Tourism Board
Message: Positivity
May your mind continue to wander and dream of days spent under the Curacaon sun”
Ran: March 2020
Why It’s Important:
When travel resumes after the Pandemic come to Curacao
In 2023 the Curacao Tourism Board reports record visitations, 18% higher than 2022 visitations.
Crest
Message: Value ($90 value for $45) and relevancy (Smile brighter on that Zoom video)
Gary Vaynerchuk
Message: Ongoing connection.
Gary Vee continued to connect to his audience even when stay-at-home orders demanded people remained at home.
Grant Cardone
Message: Support.
The key messages of being helpful and providing support were some of the most important messages during the Pandemic Recession.
Adorama
Message: Respond to change in consumer behavior
During the pandemic when children needed to stay home, this brand repurposed their use cases for immediate consumer needs.
Square
Message: Respond to change in consumer behavior
Square helps people “make that first online sale,” a very relevant message when many small and large businesses were pivoting to online platforms.
Sketchers
Message: Value
Sketchers was testing value-driven offers for consumers. They also ran ad variations to get the best ad results.
SAP
Message: Help
“We’re here to help,” was a very important messages during the pandemic.
Qatar Airways
Message: Safety
“Travel with confidence,” was key message relating to safety measures during the pandemic.
Smeg and Southwest Airlines
Message: Positivity
Both social messages reflect happiness, experiences, and the collective need to get through the early stages of the pandemic.
Wrap Up
These advertiser examples demonstrate a few key facts.
- Marketing remains a factor in growing a business even during a recession
- Align messages changing consumer needs
- Businesses will pivot products and services to achieve new product/market fit
No recession will fit precisely into a prior framework, but the lessons of the path provide a starting point for future recession marketing.
During the Pandemic Recession, marketers remained hopeful with their messaging. They created opportunities based on customer needs and remained open to new ways of serving customers. Messages of hope, optimism, and togetherness filled ad spaces throughout the US.
In past economic downturns, we see evidence that companies that increased their marketing spending thrived with 4.3% to 340% increases in sales as the economy improved. New innovations were created out of The Great Recession, and businesses did well. The gig economy surged, personalities leveraged social media to catapult their business opportunities, communications changed dramatically, and even new food concepts thrived.
In change, we have the opportunity. The companies leading the future will gain attention using the existing communications framework. Attention will be called to solutions that serve our current world, even in the face of change. In every recession, new companies form, and existing companies grow powered by marketing.
The evidence shows that if your company has the cash and business discipline to deploy marketing efforts, your company will benefit. Businesses will benefit from a continued bond with the consumer, lower labor costs from laid-off experts looking to work, and the ability to stay top of mind as competitors stop their attention-gathering activities.
In marketing, you are powering the economic engine that will grow your business, keep your employees paid, provide needed consumer solutions, and help create a recovery that communities worldwide need.
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