How to advertise during a downturn

As the cost-of-liv­ing cri­sis tight­ens its grip, it’s becom­ing ever more vital for brands to high­light the val­ue for mon­ey their offer­ings pro­vide and dif­fer­en­ti­ate them­selves from the com­pe­ti­tion. The prob­lem for many firms is that they’re hav­ing to find sav­ings them­selves – and the mar­ket­ing bud­get is often among the first to get trimmed.

With purse strings tight­en­ing every­where, adver­tis­ing agen­cies and their clients must there­fore inno­vate and find the most cost-effi­cient ways to deliv­er returns on what in many cas­es are dimin­ish­ing invest­ments. 

This could include har­ness­ing meth­ods that adjust the tone of ad mes­sag­ing to reces­sion psy­chol­o­gy or deliv­er greater lev­els of per­son­al­i­sa­tion. Oth­er tech­niques, such as gen­er­a­tive AI and micro ads with deep­er tar­get­ing, could be used along­side prod­uct labelling with dig­i­tal IDs or QR codes that link to visu­al sto­ry­telling. 

“Dur­ing chal­leng­ing eco­nom­ic times, inno­va­tion can be the dif­fer­ence between sur­vival and down­fall,” stress­es Sarah Salter, glob­al head of applied inno­va­tion at media agency Wave­mak­er.

Accord­ing to Wave­mak­er UK’s lat­est research into the cost-of-liv­ing cri­sis, strug­gling con­sumers are look­ing to brands for assis­tance. This could include tai­lored infor­ma­tion to help them make bet­ter pur­chas­ing deci­sions. Salter notes that emerg­ing tech­nolo­gies such as con­ver­sa­tion­al and gen­er­a­tive AI are enabling such per­son­al­i­sa­tion. 

Inno­va­tion in this con­text is about solv­ing each consumer’s prob­lems, she says. “Per­son­al­i­sa­tion can make a solu­tion feel indi­vid­ual and rev­o­lu­tionise their expe­ri­ence.”

Salter’s approach to inno­v­a­tive adver­tis­ing dur­ing a down­turn also entails focus­ing invest­ments on hero prod­ucts and “sell­ing the future”. 

She explains: “Dur­ing past reces­sions and even the world wars, adver­tis­ers were work­ing to give peo­ple hope for the future. Focus­ing on emerg­ing tech­nolo­gies that would help to shape a new way of liv­ing, they placed them­selves as key play­ers in build­ing a future that peo­ple want­ed.”

A sea of sameness on the high street

For agen­cies, under­stand­ing clients’ appetites for risk and what they real­ly mean when they say they want to inno­vate has become key to deliv­er­ing ROI. Some brands may be keen to invest in tech­nolo­gies of the future – the meta­verse, for instance – while oth­ers may sim­ply want to pro­duce a series of pod­casts for the first time. 

The so-called 10:20:70 rule in mar­ket­ing rec­om­mends that 10% of the bud­get should go towards inno­va­tion and 20% should be devot­ed to rel­a­tive­ly new meth­ods that have with­stood an ini­tial test and are worth a sec­ond try. The remain­ing 70% should be used on well-proven tech­niques.

A glob­al sur­vey of more than 1,700 senior B2B mar­keters by LinkedIn in Octo­ber found that 76% had high hopes for their strate­gies for the next six months, despite bud­get cuts. Two-thirds of respon­dents were plan­ning to main­tain or even increase expen­di­ture on brand-build­ing activ­i­ties.

Matt Rhodes is chief strat­e­gy offi­cer at House 337, an ad agency with clients includ­ing M&S, San­tander and Tesco’s own appar­el brand, F&F. He sug­gests that increas­ing eco­nom­ic uncer­tain­ty will prompt more con­sumers to look for new prod­ucts to try for the first time as they seek more val­ue for mon­ey.

“To cut through the sea of same­ness on the high street, mar­keters must think inno­v­a­tive­ly about how they talk about qual­i­ty,” he advis­es. “There is huge inno­va­tion with­in dig­i­tal prod­uct IDs that hold infor­ma­tion about a garment’s man­u­fac­tur­ing and sus­tain­abil­i­ty cre­den­tials on the blockchain. This helps brands to prove the val­ue of their prod­ucts through infor­ma­tion trans­paren­cy.”

It’s also impor­tant to focus on cus­tomer expe­ri­ence, accord­ing to Anne Stagg, CEO of Merkle in the UK, who works on this with clients includ­ing Hilton, Sub­way and Cur­rys. She believes that build­ing loy­al­ty through inno­va­tion and rela­tion­ship-build­ing is espe­cial­ly impor­tant dur­ing a reces­sion, not­ing that the most effec­tive approach a brand can adopt when times are tough is to “put your cus­tomer first”.

Stagg adds that dur­ing a down­turn “the usu­al demands from con­sumers become essen­tial needs – and a business’s sur­vival becomes depen­dent on its abil­i­ty to adapt to this”.

Listen and respond to consumers

Sid McGrath, chief strat­e­gy offi­cer at Wun­der­man Thomp­son, observes that many con­sumers feel that they’re los­ing con­trol of their sit­u­a­tion dur­ing peri­ods of aus­ter­i­ty. Clear and sim­ple mes­sag­ing helps to reas­sure peo­ple in such cir­cum­stances.

“All you need to do is lis­ten and respond to con­sumers. It’s not nec­es­sary to rein­vent the wheel,” he argues.

McGrath sug­gests that mak­ing things sim­ple could extend to mea­sures such as express­ing dis­counts in pounds and pence rather than per­cent­ages. This ensures that “con­sumers don’t need an eco­nom­ics degree” to under­stand the val­ue of a spe­cial offer, for instance. 

He also advo­cates set­ting out all the “ratio­nal ben­e­fits” of the prod­uct or ser­vice, while not mak­ing dras­tic changes to the type of mes­sag­ing from the brand that con­sumers are accus­tomed to.

For Salter, set­ting your offer­ing well apart from the com­pe­ti­tion is the most impor­tant mar­ket­ing pri­or­i­ty in a reces­sion. Firms that come out of down­turns in a stronger posi­tion than their rivals tend to have achieved “dis­tinc­tive­ness by focus­ing on the mas­ter brand and a few hero prod­ucts”, she says. 

“It’s not the time to invest in a long list of sec­ond- or third-placed stock-keep­ing units that peo­ple are switch­ing away from. Using inno­va­tion to dri­ve dis­tinc­tive­ness is key.”