How brands should react to market slowdowns

This article was co-authored with Ed Crain, President and CEO of Kingstar Media and 26-year veteran of the marketing and media industries. 

Over 30 years of working in the media business, I’ve seen a fair share of market slowdowns. That time horizon has taught me these are more of an eventuality than a possibility, especially given the increased volatility of a global market. Downturns can hit industries unexpectedly, causing brands to reevaluate strategies, especially when it comes to marketing and media buying. 

As media agency experts, it’s up to us to apply the wisdom and lessons learned to help brands stay the course and emerge successfully. A slowdown doesn’t necessarily mean pulling the plug. Instead, it’s an opportunity to refine, recalibrate and return stronger. Here’s how.

Embrace a long-term perspective

A market downturn is a momentary glitch in an otherwise long game of building brand equity and trust. Many brands may instinctively cut back on their ad budgets during a slowdown. However, savvy brands recognize that staying invested in media during slowdowns can pay dividends. In a less cluttered media space, they tend to capture market share from less aggressive competitors — while also taking advantage of reduced media rates with agencies.

Historically, one can look to prominent examples such as Lululemon (1998), WestJet (1996), SkipTheDishes (2012) and Shopify (2006) — all either launched during the economic crisis or emerged in an environment of economic recovery. At the time, most of their dollars went into linear television and radio since digital options weren’t available, but even today, linear can still drive increased engagement during a slowdown.

Despite the uncertain climate, these brands either maintained or increased their ad spend. The result? They emerged stronger, capturing a larger market share, while their competitors lagged behind. The simple logic was visibility. With fewer advertisers in the market, their brand messaging stood out more, resulting in a higher recall value, ensuring that when consumers are ready to spend again, these brands are top-of-mind. 

Embracing a long-term perspective is not about spending blindly during slowdowns but understanding the broader strategy. It’s a mix of seizing opportunities, ensuring consistent brand visibility, capitalizing on cost advantages and solidifying brand equity for the long haul.

Dig deeper: How to overcome marketing budget cuts and hiring freezes

Focus on value and affordability 

Messaging that works during times of prosperity isn’t likely to resonate when times are tough. Each recession reflects similar consumer behavior: people go out less, spend more time at home and tend to watch more television. Typically, they pause or reduce spending, especially on big-ticket items and are less receptive to hard-sell messages. 

If they do have the finances, they want value before they’ll be ready to execute a purchase. Consequently, brands should review and adjust their creative to highlight cost savings, discounts and promotions that resonate with price-sensitive consumers. Test different products or lines within the brand and play with offers or incentives to help find your audience and gauge their willingness to spend. For example, pre-COVID, we saw CPO ratios of 2:1, yet during the pandemic, this jumped to 4:1 as captive audiences spent more time on screens and switched spending patterns to focus on home-related products.

This is also the time to engage with your audience and create meaningful emotional connections. Brands that show empathy and understanding tend to create deeper bonds and maintain greater trust with their customers in the long term. Storytelling, brand values and community building can be strong strategies.

Dig deeper: 3 recession-defeating marketing strategies

Leverage digital and data analytics

Digital media offers an unrivaled advantage during slowdowns: flexibility. It can be tested and scaled up or down depending on real-time metrics, a dynamic approach that helps brands optimize spending. 

With an abundance of data points, digital platforms allow us to gauge the effectiveness of each campaign, track conversions and understand user behavior. This data-driven approach enables us to continuously refine strategies, ensuring resources are invested where they generate the most impact.

It also allows us to target consumers more effectively and tailor creative to the viewing audiences. Whether it’s demographic, behavioral or interest-based targeting, we can ensure that a brand’s message reaches the most relevant audience.

Thanks to lower production costs, digital also allows us to develop more creative options, testing up to seven different creatives to focus brand spend on high-converting segments. Those learnings can then be applied to create mass media commercials for linear channels and tailored to various networks for different audiences to maximize response. 

Digital platforms also foster interaction. Whether through comments, shares or likes, consumers can engage directly with digital content. During market slowdowns, this engagement becomes crucial. Brands can gauge real-time sentiment, gather feedback and build a more organic relationship with their audiences.

Dig deeper: Data plus analytics is the route to the truth

Re-evaluate your media mix 

Just as investors are advised to diversify their portfolios to mitigate risks, brands should re-evaluate their media mix during a slowdown. This might mean rebalancing the combination of digital, print, radio and TV, as well as shifting from awareness to more performance-based goals. It’s more important to test which channels are working, where there is a response, and to find your audience where they are. 

Linear channels typically reinforce brand awareness, but in recessionary times, brands should challenge agencies to come back with plans that demonstrate response. This will depend on the product/service and how creative is executed. You can deploy differently while maintaining brand image, but the goal is to create an emotional connection and elicit an action that will give you a return on advertising. Whether it’s offering a coupon or QR code, agencies should be tasked with delivering transactional advertising that creates action and builds revenue. 

This includes changing your creative. Things like graphics, the size of fonts and changing the color of background — can all make a difference. 

Additionally, reflect on which media and metrics truly drive brand growth. Brand awareness is great during high times, but it’s crucial to focus on the KPIs that drive real business results in a slowdown. Whether it’s customer lifetime value, retention rates or cost per acquisition, ensure your media buying decisions are grounded in metrics that matter.

While challenging, market slowdowns can also be moments of opportunity for brands. The key is to remain strategic, agile and consumer-centric in media buying decisions. By adopting a mix of long-term vision, digital flexibility and value-driven choices, brands can not only navigate downturns but thrive in them.

Dig deeper: Why tight budgets mean maximizing content