Advertising is a growth driver for business. Brands invest in advertising to launch new products, educate consumers, grow market share and sales or even to fight competition but what happens when a brand finds itself in the midst of an economic downturn?
In business, it is logical to reduce cost when revenue isn’t growing and advertising is usually one of the first cost lines to get affected. However, when brands cut back on advertising especially in a recession, they are at the risk of losing market share and profits in the long term.
Customers during recession, more often than not search for information about a product/service. To gain the trust of the customers, companies should highlight the right message with clear information including motives as durability, overall quality and safety (Hruzova, 2009; Shrager, 1991). A recession presents a golden opportunity for brands to take their markets. Brands that will be successful long term must seize the opportunity by increasing and optimizing advertising spend versus competition to grow market share and eventually profits. It is also an opportunity to be more innovative and creative with offerings and value to the customer.
Market Insights: The instinctive inclination to cut down on advertising spend in a recession can be seen in the figure below, capturing the difference in digital ad spend across three major brand categories in 2014 (pre-recession) and 2016 (during recession) in Nigeria. The general consensus maybe that this “shrewd” approach is needed but history proves otherwise. During the 1981-82 recession in USA, a study by McGraw-Hill showed businesses that maintained or increased their ad spending in this period averaged higher sales growth during those two years and in the following three years.
Taking into cognizance the Nigerian market, we’ve outlined below five (5) practical ways in which a brand marketer can thrive in the midst of a recession.
1. Data-driven Marketing
Once you know your goal (reach, results or engagement), you can leverage on a data-rich marketing channel like programmatic media buying, sit back and let data lead the way. It all starts with knowing who your target audiences are and how they engage digitally. It is also important to know where they spend their time.
More advanced data-driven concepts include finding people who are similar to your current customers (look alike modeling) or using predictive analytics to determine customer responses as well as promote cross-sell opportunities.
As a brand marketer, you’re able to unmask deeper insights about your audiences and target them better.
2. Optimize Budgets To Achieve Your Goal
To properly optimize your marketing spend you will need to find your best converting channels and scale upon them. To find the best channels you will need to experiment with a number. Every campaign is different depending on your goals and there are data points available to guide optimization. Your goals determine your approach and there’s a need to track the channels/sources of traffic that are delivering specific results for your campaign.
Focus on people not placements. Pay for audiences not impressions. The best media plans don’t focus on inventory, they focus on users. Examine every inch of your data to capture everything you can about your customer’s purchasing behaviors and journey.
3. Buy Media Locally
Brand marketers need to be able to focus on connecting with their customers without having to worry about the hassles of buying media in foreign currency or having their address able audience shrink by half from media planning to execution stage. The same audiences who can be reached via a foreign platform a real so available via local platforms hence, buying media locally will safeguard brands from the impact and complexities of the constant fluctuations in exchange rates of the Naira to the Dollar.
4. Push Your Creative Boundaries
As shared earlier, the ultimate outcome of marketing intelligently during a recession is that it eventually offers you the opportunity to grow marketing share and profits. However, all marketing doesn’t have to be paid. Brands can get organic or earned media with creative offers and campaigns i.e. coming up with more campaigns that engage your customers in such a unique way that word-of-mouth and unpaid customer referrals become one of your biggest advertising channels.
As the acclaimed “founder of modern management”, Peter Drucker said– “A good product sells itself”. In our case, a good marketing campaign sells the product/service.
5. Embrace Native And Video Ad Formats
As the lines between advertising and content blur, content marketing has become more popular and native advertising has been the key driver of the concept.
Native ads generate 53% more impressions and 85-93% higher CTR than banner ads. Customers’ purchase intent is also 53% higher for native ads.(Source: blog.hubspot.com). Native ads are customised to blend with mobile web content i.e. color, font, style on a site or app making them non-intrusive and helping to deliver high post-click engagement.
Mobile video has also witnessed an explosion around the world and it’s been established that 69% of Nigerians online watch videos on their mobile phone daily. Mobile video consumption in Nigeria has an average of 110m views and 6.7m hours watch time per month.
Video accounted for around 50% of mobile data traffic in 2015 and almost 70% of all mobile data traffic will be from video by 2021- it will grow by 55% annually during this period.
All these and more give clear evidence to justify cutting advertising spend on TV and allocating more to mobile videos instead.
Source: Twinpine Network