By Rob Blake, Country Manager UK, Channel Factory
Every impression counts, even during the best of times. During an economic downturn, the value of quality impressions increases drastically. As a result, navigating the advertising landscape in a recession is a daunting task, but when done right it can unlock many opportunities.
The temptation, for many brands, is to batten down the hatches and weather the storm. Survival is being prioritised. However, those that put their heads above the parapet and seek growth through advertising are able to seize a unique opportunity that a recession presents.
How can advertising be done effectively and efficiently during a recession in order for brands to seize growth whilst their competitors brace themselves for impact?
A misunderstanding of advertising in a recession
Throughout history, when the economy is on the precipice of recession, brands seek to immediately reduce spending as they expect to be hit with decreased sales and increased costs. Often advertising and marketing departments are the first to see budgets shrink.
In addition to reduced ad budgets, the advertising teams are often the first to experience a reduction in personnel, leading the remaining team to be extremely time and resource poor. Misaligned content, media wastage and a low return on investment are the bane of an advertiser during recession. It is imperative that every penny produces the greatest impact possible.
Thereby the remaining team looking to weather the economic storm and reduce advertising spend have a crucial misunderstanding of advertising’s role during a recession. In a study by McGraw Hill, companies that continued to advertise during the recession in the 1980s saw a 256% higher sales than competitors post-recession. This clearly demonstrates how advertising in a recession is misunderstood by many brands.
Whilst a recession impacts us all negatively, brands must try and see the opportunity ahead of them.
Seizing the opportunity
In order to seize this opportunity brands must take meaningful steps to understand their campaign ‘success’ in greater detail whilst ensuring their advertising practices are aligned with good content and much, much more.
When creating advertising campaigns, brands must define what ‘success’ looks like for them. Is it X number of new leads? Or Y number of new customers? So on, and so forth. However, in a recession the ‘success’ of advertising campaigns goes far beyond these numbers, and undergoing an in depth audit of what this new ‘success’ looks like is crucial. Brands, and their partners, must identify what counts as a quality impression, what is wasted media and where there are opportunities to build loyalty or diversify audiences. Once these are identified, advertisers and brands can begin achieving great results based on these ‘success’ metrics.
Misaligned or grey content can halt advertising progress immensely, leading to a large percentage of media wastage and diminishing purchases. On average, agencies and brands see 28% of their media run against wrong or misaligned content on YouTube. Add into the mix the fact purchase intent decreases by 6% for Gen Z and 8% for Millennials when brands run ads against questionable content vs. standard content, then the impact of misaligned content can be overwhelming.
Brands must see the value of employing extensive brand suitability and advertising alignment during a recession. By aligning content, brands can bring in 17% (at minimum) more ROI, without having to increase media spend or budgets.
Brand suitability and inclusivity
Brand suitability can also help maximise ROI through its ability to target diverse audiences which engage more positively with your brand. By combining contextual advertising, brand suitability and a custom curated inclusion list of diverse creators you can reach increasingly diverse audiences who will connect with your brand, leading to fantastic results.
One particular Channel Factory client saw a 22% increase in View Through Rate (VTR) using the combination of inclusion lists and brand suitability. Evidently, brand suitability and inclusion lists not only diversify your audiences but can increase engagement with your advertising, which is essential for maximising your ROI during a recession.
The importance of being conscious and understanding
Brands must remember that their consumers are struggling during a recession, and their advertising must reflect this. Simply carrying on with the same campaigns will not reap good results. WARC points out that 44% of successful campaigns in a recession use an emotional approach, meanwhile Channel Factory’s own research found that 69% of consumers would prefer to buy from brands committed to socially conscious causes.
Moving forward with campaigns that are socially conscious, and reflect the struggles consumers are facing will increase engagement from key audiences and build long-term brand loyalty. Importantly, it will boost brands ROI in the immediate term.
Advertising in a recession takes a deep-level of understanding. Brands and advertisers must understand the temptations a recession provides – to restrict budgets and stick to survival – but they must also understand what really counts as ‘success’ for their campaigns.
Once success is clearly understood, brands and advertisers need to ensure their adverts are correctly aligned with the content they are placed alongside, that they are brand suitable and inclusive, whilst also being conscious and socially responsible in their content. This will allow brands to maximise their ROI and eliminate media wastage during a recession, and most significantly achieve growth whilst their competitors sought to hunker down.