How best to use your marketing budget during a recession￼
With the current cost of living rapidly increasing and a recession all but imminent, it’s no surprise that people are scrambling to cut costs. Reports from the ONS state that 89% of adults in the UK reported an increase in their cost of living in July 2022, and this isn’t expected to settle anytime soon.
Small business owners are feeling the strain of this economic downturn more than ever, with nearly a third believing they could be out of business within the year. With difficult times ahead, it’s not uncommon to see businesses start the dreaded streamlining process. Insider Intelligence reports that July saw ad spending go through its worst monthly decline since July 2020, showing us that, unfortunately, marketing is often first on the chopping block.
But, could this be a fatal mistake?
In times of desperation, it’s easy to go into survival mode and think about how to fix things ASAP, but data from previous recessions suggests that businesses that reduced their marketing spend actually suffered lower growth rates than those that continued. Perhaps the key is not to spend as little as possible, but in fact, to spend as wisely as possible.
So, whether your business is deciding to increase or decrease their marketing spend during these uncertain times, don’t panic. Here are some simple tips on how best to budget your ad spending during this turbulent season.
1. Retarget your audience
If there was ever a time to look at retargeting, now would probably be it. Marketers should consider their current audience and ask about those they have yet to tap into. Do a deep dive into your analytics, and consider if they point to a new audience.
Whilst most businesses are cutting down on marketing, this subsequently means competition is also reduced. This could be the ideal time to seize the moment and target audiences who’d normally be out of reach while your competitors are hitting the brakes on marketing. Consider allocating your budget to campaigns that look to bring in these new audiences. With less competition, your business will find it much easier to stand out, demonstrating stability to both existing and new consumers. This brands your business as a leader that challenges others that may have gone into hiding.
2. Reallocate, don’t eradicate
As marketers, it’s no secret that keeping on top of your KPIs is essential to a successful campaign and/or strategy. But, now more than ever, you should be taking a hard look at your performance metrics. While instinctively it seems right to save money where possible, when considering strategic changes, aim to reallocate rather than cut budgets.
Firstly, start by examining your existing campaigns and evaluating your channels, including email and websites. Ask yourself if there is an opportunity to improve conversion rates. When looking at your campaigns, are the click-through rates high but conversions actually low? This could be a sign of wasted ad spending.
One of the ways that you could reallocate your budget is through influencer marketing. One of the strongest forms of marketing is through word of mouth, and the aim of influencer marketing is to build brand advocates who will essentially become your marketing mules. The truth is that we’re all designed to trust our peers and their reviews over what companies pump out. With 92% of consumers saying they’d trust another individual over a brand, it would be a massive mistake to overlook this marketing strategy.
Think quality over quantity. Once you’ve identified the channels and campaigns that are effective, increase the spending on those more efficient channels and reduce budget on the channels that aren’t performing so well. This is a great way of making the most of your budget and increasing your chances of a successful ROI.
3. Outsource your marketing
Marketing is more complex than ever, and especially in recent times, there has been a shift in the demand for more bespoke approaches and strategies across different industries. This means that it can be difficult to allocate multi-channel marketing strategies to an in-house team member who would need to have the skills required for this job.
Realistically, trends and approaches are constantly evolving and managing these approaches in a climate that is unsteady can be difficult. So, now might just be the time to bring in an outsourced marketing agency. Experts who understand the world of marketing and how best to allocate and use your marketing budget to bring in revenue, particularly during an economic crisis.
Essentially, bringing in a marketing agency means hiring solution providers. A team who can focus on delivering your marketing needs, likely at a lower cost than a full-time member of the business who might be time-poor. Forbes recently reported that a full-time employee has a substantially higher business cost than an outsourced solution performing similar tasks.
The truth is that, even during a cost of living crisis and recession, consumers will still consume. Yes, the way in which they buy might change, but transactions will happen none-the-less. Adaptation is key, and remember that you do have options. Perhaps being clever with your budget instead of saving it could just be the answer to surviving this economic downturn.
At Yours Sincerely, we know that it can be difficult to navigate your marketing during these uncertain times, but we are here to help. Get in touch for a free consultation and find out how we could help you.