How Does the Economic Downturn Effect Marketing?

Marketers, buckle up those seat-belts! We are on a roller coaster. During an economic downturn, businesses find that many serious consequences will hit them. There is a clear need for companies to develop innovative and efficient marketing solutions to survive and continue thriving through a recession. An economic recession will invariably become an essential lesson for marketers. It is necessary to examine the effects of marketing in a downturn for advertising strategies and marketing spending. And yet, marketing is an absolute necessity that cannot be ignored.

How to Modify My Marketing Strategy for Economic Downturn?

Marketers must understand the psychology of the recession. In a thriving market, consumer confidence is crucial. However, it is even more critical for marketing in a recession. During a recession, consumers only purchase products they view as necessities.

  • Perform an audit to make sure that you continue marketing your more profitable and necessary products and services
  • Get creative with your budget
  • Focus on ROI
  • Nurture Existing Customers
  • Create Partnerships

In some cases, a recession can cause fears and uncertainty. Marketing strategy in an economic downturn is essential, but the quality of the products and services must be able to backup the marketing efforts. Previous recessions show that marketing is not an optional expense for businesses during economic hardship. Marketing is imperative for maintaining business market share when the economy is down.

Article Outline

The Effect of a Recession on Marketing and Advertising

  • Don't Stop Marketing

Marketing Market Your Best Stuff!

  • Rethink Your Product and Audience
  • Consumers Change Their Habits in a Recession

Find Ways to Stretch Your Marketing Budget

  • Cost Efficiency Will Dictate Advertising Strategy
  • The Power of SEO
  • Social Media for Your Brand Recognition
  • AI-Driven Digital Marketing for Smart Lead Generation

Marketing Needs to Be More Effective (ROI)

  • Marketing in a Downturn Requires Efficiency
  • Target Your Marketing Strategy

Account-Based Marketing Becomes More Important

  • Include ABM in Your Marketing Strategies
  • Provide Case Studies and Assets

Create Partnerships With Other Businesses

  • Leverage Share of Voice
  • Pick Partners with Similar Values

Additional Recession Marketing Tips

  • Branding Recognition Increases Sales
  • Send Positive Marketing Messages
  • Use Innovative Thinking


  • Do Your Market Research
  • Choose Low-Cost Marketing Channels
  • Make Your Marketing Efficient
  • Prodigitude Can Give Results

The Effect of a Recession on Marketing and Advertising

During a recession, many businesses cut advertisements for the sake of saving. Compared to prior years, owners may want advertising expenditures to decline as a company struggles to make ends meet. Advertising costs usually go up as inflation drives all overall prices higher. Logically, businesses have to lower costs, and advertising should get retracted. But logic is incorrect in this situation, and cutting marketing activities is a bad idea.

Don’t Stop Marketing

During the last recession in 2008, advertising spending had decreased by 13%. However, according to Forbes, the companies that maintained or even increased their advertising during the recession were able to increase sales and market share of their brands during the recession and afterward as the economy recovered.

Studies dating back a century have shown the potential benefit of advertising during a recession. Even during the great depression, while many companies initially tried to cut their advertising spending, by 1935 many product categories had reached levels that surpassed 1928 spending. So then, what began as marketing in a recession continues through the economic recovery period to help a company grow.

Market Your Best Stuff!

Market your best stuff

Rethink Your Product and Audience

Audit to ensure the advertising budget focuses on the most profitable product categories and services. During a recession, marketing budgets should focus on products able to make an exceptional profit in a favorable market. Spending any of the marketing budgets on less than stellar items would be wasted money. Completing an audit on all products will allow the marketer to know the most profitable marketing strategy, maximizing your return on investment (ROI).

When you get an overview of your goals, it might be necessary to reconsider how you sell, how you market your product, what products your feature, and why you need them targeted. Incorporate your products/services into these emerging needs of a recession to meet your customer's requirements. Focus on results, not on features and products. Decide what brands are less affected as the economy continues in a recession and how this will affect your market strategy.

Consumers Change Their Habits in a Recession

Things that are seen in the luxury product category will often suffer in most recessions. A brand may need to fine-tune the products launched to reflect supplying the changing needs of their typical customer base. Remember that consumers are struggling with reduced buying power even if their income levels remain the same. Companies should consider products that have the potential for repeat purchases.

Consumer confidence is quick to waver and they are prone to changing brands during a recession. According to Harvard Business Review, the research shows that advertising can benefit by analyzing the modified behavior of consumers and segmenting them based on the amount of impact that the economic downturn has had on them. A risk assessment of your brands will stabilize your business cycle by providing guidance on what is your best product category.

Find Ways to Stretch Your Marketing Budget

Find Ways to stretch your budget

Cost Efficiency Will Dictate Advertising Strategy

Marketing departments of every business are hugely affected by recessions as customers become hesitant to spend. Consumers become more price sensitive and often more receptive to price promotions. So naturally, many marketers will find themselves under scrutiny as companies turn a watchful eye to their promotion expenditures.

The effect of a recession on advertising is that advertising can be more expensive due to inflation, reinforcing the need to strategize to drive sales. It will be necessary to consider advertising space and potential lead generation for each campaign.

The Power of SEO

One of the most important moves a marketer could make is to maximize effective Search Engine Optimization (SEO). Great SEO uses the most popular keywords for the products and services the business offers. The keywords are optimized for websites, landing pages, and blogs. The more accurate and strategically placed the keywords are, the better the SEO for your digital marketing.

Selecting the right keywords and phrases can put the business at the top of the Search Engine Results Page (SERP). Be sure not to overload the exact keywords repeatedly because that could make the web crawler see the business's website as spam.

Good website design, technical correctness, and excellent user experience also assist in great SEO but have the added benefit of converting more consumers for your business. Look for ways to improve the digital experience of your customers, and that is an expense that will continue to improve your conversions and leads.

Social Media for Your Brand Recognition

Consider social media as part of the marketing strategy. Creating profiles on the most popular social media sites will increase visibility. Target social media efforts toward the preferred demographic. Optimizing social media efforts for specific ages, locations, and marital statuses can get the products and services to the ideal consumer first, decreasing the money spent on advertising.

Consumer confidence is often driven by social media. A positive effort in social media can assist customers in making a switch to the store brands that they prefer. Properly managed, social media can be a very savvy way to gain consumers for business and increase brand loyalty. All of these factors are important in driving sales during a recession.

AI-Driven Digital Marketing for Smart Lead Generation

Automated lead generation is the usage of AI and machine learning tools to establish leads across all your advertising channels. It essentially leverages artificial intelligence to generate more accurate, helpful, and fruitful leads for companies to increase consumers. There are many benefits to using an AI Marketing Strategy, including the ability to gather data quickly and connect with potential consumers, along with the elimination of manual tasks that can be laborious and error-prone.

Consumers are more loyal to brands that provide customized customer content. This is important to the bottom line of your business and helps lessen the low points of your business cycle.

Marketing Needs to Be More Effective (ROI)


Marketing in a Downturn Requires Efficiency

Value-based promotions become crucial as marketers combat consumer distrust in a super-competitive economy. The marketing effectiveness of your campaigns is needed to drive the company's overall business. Pressure on marketing teams will be more significant despite the economic recession. The reason is simple: It means that advertising needs to be efficient, and your reporting needs to get better.

Marketers need to optimize marketing plans to make reporting on various campaigns easier. If you don't know what is working to produce sales, then you are unable to focus on the winning campaigns. Make sure that you are regularly reviewing your marketing reports.

Target Your Marketing Strategy

In a recession, marketing efforts need to be more targeted. Targeting includes optimization of advertising and marketing actions but also creative brainstorming to send the right message to the right people. Work with the creative team to get the target audience a clear, concise message. Online advertising is also helpful by being quickly adaptable with the ability to be AI-driven to improve results.

The marketing team can then decide on the most lucrative efforts with psychological segmentation. Segmentation determines the target demographic and allows the business to gear all efforts toward that group. The segment could be a group with a specific gender, age, marital status, parental status, or location. Targeted marketing could save money and increase ROI because the advertisements are going to the people likely to use the marketed brand.

Account-Based Marketing Becomes More Important

Include ABM in Your Marketing Strategies

Customers are the priority. New customers can require more resources to be spent in order to gain them as loyal consumers of your personal store brands. Companies must consider this when weighing how to ration out their marketing expenditures.

Existing customers have purchased from the company before, so nurturing a current relationship will prove effective for the business's return on investment. Ensure existing customers feel appreciated and have the latest updates on the product launches. For example, the company can build customer loyalty and increase sales through people already familiar with the brand.

Provide Case Studies and Assets

Case studies and customer success stories become more important. Hearing about other people's successes with the marketed company compels potential customers to attempt to achieve the same result with the same product. Announcing the success of existing and past customers shows what future customers could be capable of and makes the product or service more desirable.

Assets are anything free that provides added value to your customers. During a recession, consumers want to get more value. Information is frequently a valuable freebie that can be given to your clients, and it will help to increase sales during a recession.

Create Partnerships With Other Businesses

Create Partnerships with other Businesses

Leverage Share of Voice

Rather than trying to win the marketing race with competitors, co-branding with another company or creating product partnerships can benefit by helping both companies grow. Joining companies allows the collaborators to pursue more ambitious marketing tactics because the former competitors will be able to share costs and risks. Partnerships will also enable the companies to reduce capital needs, allowing them to position themselves to emerge stronger once the economy improves.

Pick Partners with Similar Brand Values

While brand partnerships can provide an increased share of voice for both companies at a lower individual cost, it is important to create a pairing that makes sense. Some partnerships are for non-competing related industries like hotels and airlines, where the sales are both related to travel. Other partnerships are about similar business values to successfully improve the reputation and sales of both companies.

Additional Recession Marketing Tips

Branding Recognition Increases Sales

Creating a strong brand is essential for any business that wants to thrive in the long term. Simply put, branding is the process of creating a unique identity for your business. Branding also involves creating an emotional connection with your customers. When done correctly, branding can make your business more visible and memorable, which can lead to increased sales and customer loyalty.

In a competitive marketplace like a recession, having a strong brand is more important than ever. By taking the time to develop a well-rounded brand, you can set your business up for success now and in the future.

Send Positive Marketing Messages

During difficult economic times like a recession, it's more important than ever to make sure that your brand is sending a positive message. Your messaging should encourage and empower your audience, which will help to build a strong emotional bond. An emotional bond will help to drive sales.

An analysis of nearly 880 case studies published by the World Advertising Research Center found that campaigns that focused on emotional engagement turned out to be more profitable than marketing campaigns that prioritized transactional messages. So while special offers or discounted prices are always appealing to clients when money is tight, don't be afraid to focus on the emotional side of your brand—it could be the key to success.

Use Innovative Thinking

During a recession, firms often slash R&D budgets the same way they are tempted to cut marketing in order to save money. An article published in Research and Technology Management found firms that increased their R&D spending during a recession experienced higher long-term growth and better performance. The study also found that innovative products launched during a moderate recession had higher survival rates than the average newly launched product.

This is likely due to the fact that there is less competition during a recession. So firms that are able to launch new products during a recession or immediately after a poor economy begins to recover have a first-mover advantage. In fact, a significant number of companies are able to turn a recession to their advantage and actually thrive by creating and marketing their innovation.


Do Your Market Research

In a recession, marketers must complete research to reach prospective customers effectively and create marketing campaigns that best serve the brands. Research shows correct streamlining of product portfolios allows companies to cut costs while solving at least 80 percent of the customer's problems with one product.

Ensuring the customer's needs are met increases the likelihood that a prospective customer will choose your brand. The consumers gain what they need while the company earns a return on investment and the sales needed to weather a recession. An economic downturn requires strong products that fill consumer needs.

Choose Low-Cost Marketing Channels

The current market conditions make improved affordability precious. A streamlined marketing strategy allows companies to cut advertising costs to maintain product affordability. Redirecting some of that excess money for the marketing budget to products increases the potential sales, lowering overhead and maximizing a pleasant customer experience.

Remember not to neglect account-based marketing. Maintaining a great relationship with the current customers encourages trust and maintains brand integrity. Allow existing customers to view specials, deals, and new products before the general public. Remind them of the many benefits the company offers and keep them happy with their decision to choose the company.

Make Your Marketing Efficient

Manage recession marketing investments efficiently and stop spending money on any marketing campaign not currently maximizing the ROI. Use all of the marketing resources available and streamline your advertising. Pay attention to the marketing reports and analytics, then readjust the marketing strategy accordingly.

It's possible to not only survive an economic crisis, but if marketing strategies are correct, some businesses can even thrive during a recession. Marketing is not something that can be considered optional but with the marketing budget strained, getting the most for your ad spend is of great importance.

Prodigitude Can Give Results

blog caas post

Prodigitude is professional and progressive digital marketing with a positive, creative attitude that can provide the results you are looking for.

If you are in need of marketing assistance, we are a full-service Marketing Agency. Our revolutionary “Creative as a Service” business model will allow you to have an experienced team providing maximum flexibility for promoting your company over competitors. All of it at a set monthly price to help you plan your marketing budget.