While the world collectively sighed a breath of relief as the pandemic subsided heading into 2023, it simultaneously readied itself to weather the storm of a looming recession.
The pandemic had a profound impact on the global economy with some industries greatly benefiting, while others virtually stood at a standstill. However, the likely 2023 recession is expected to negatively impact industries across the board. As consumer behavior starts to shift as a reaction to the recession, so will business priorities and marketing strategies of brands across the globe. Read along as the digital marketing experts at Response Labs share how digital marketers and advertisers can emerge from this storm better prepared for the present and future state of the global economy.
Let’s start by exploring trends emerging in today’s marketing and advertising industry and what they mean for brands that want to stay competitive in a likely recession. In the industry we are seeing trending buzzwords including frequency, personalization, and data-driven. As we enter a time of change across major platforms (Google’s shift away from using third-party cookies), focus on these trends in order to build a strong marketing runway and come out of the recession unscathed.
Maintain A Strong Advertising Presence; Protect and Grow
When economic turmoil threatens to affect a brand’s bottom line the first reaction is often to cut marketing budgets, resulting in reduced engagement with target audiences. However, when faced with the challenges brought on by a recession and inflation, maintaining and enhancing advertising plans has been proven to keep brands top of mind, while protecting market share and driving revenue (see Taco Bell and Pizza Hut in the 90’s and Samsung marketing investments in 2009).
Advertising throughout a recession is a necessary investment that helps build and maintain frequent connections with consumers. Brands may need to find more efficient or cost-effective ways to spend advertising budgets in a recession, but ultimately, advertising spend will continue to grow even in a recession. In fact, according to eMarketer and IAB, annual digital ad spend will surpass $300B by 2024 with the majority of projected ad spend growth in 2023 in the B2B, travel, dining/alcoholic beverage and financial services industries which means if your brand isn’t actively advertising and engaging with audiences at the right time with the right message, your competitors likely are. Don’t give your competitors an opportunity to push their way to the top by scaling back your advertising support.
Personalize Your Message To Consumers
Consumers in today’s market expect custom experiences and personalized messages. Personalization in marketing has been trending for some time now, but it becomes even more important in times of economic uncertainty. Advertising campaigns that include personalized touch points will help combat declines in performance benchmarks that are often reported as we approach periods of economic turmoil. According to recent reports, we are already starting to experience these declines. Google Search ads Cost per Lead has increased an average 19% year over year, leading to an average 14% decline in conversion rates across most industries in 2022. Trends like this will likely continue in 2023, which underscores the importance of personalization. Invest in personalized advertising touch points that support a mutually beneficial relationship between your brand and the customer in order to improve performance and support positive ROI.
Increase Focus on Data-Driven Strategies
Most advertisers are already aware of major shifts in the industry surrounding consumer privacy by way of eliminating third-party cookies, among other changes. These shifts, along with economic uncertainty ahead, call on brands to develop best practices in identifying and collecting data that informs marketing and advertising decisions. With a focus on consumer privacy concerns at the forefront, brands will need to recognize the relationship between effective and safe use of data in marketing, personalized experiences, and realization of business goals and increased revenue. Particularly true in paid media, brands should use data in 2023 to inform and optimize existing digital ad campaigns and improve audience targeting. According to IAB, 52-53% of ad buyers plan on focusing significantly or somewhat more on acquiring first-party(1P) data and placing ads on publishers with 1P data in 2023. By doubling down on effective usage of consumer data, brands will be able to drive more efficient ROIs and help combat the effects of a global recession on advertising and marketing.
The 2023 economic landscape will impact marketing and advertising strategies and outcomes, requiring brands to stay nimble and consistent as their businesses adjust to the changing market. Focus on maintaining a strong advertising presence, personalize consumer messages, and harness the power of data to be effective. These tips will help you implement and maintain impactful marketing strategies to ensure your brand emerges from the recession successfully. If your brand needs support navigating the complex digital advertising world, reach out to the Response Labs experts. We’ll set your marketing plans up for success.