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Economic Factors Affecting Marketing and How to Mitigate Them

August 13th, 2019   ||    by Oriana Schwindt

Are we heading toward another recession? Expert opinion varies, though “a growing group of analysts and experts have started to talk more about the possibility of a recession on the horizon,” according to Vox.

Experienced marketers understand the economic factors affecting marketing, and that they may soon have to start doing more with less. Marketing budgets are often the first to be slashed at even the hint of an economic downturn. The last recession in the US in 2009 saw advertising budgets shrink by 10 percent in the first quarter alone, The Economist reported.

Here are three ways to keep your successful marketing strategy trucking along, even if the economy doesn’t want to play nice.

1. Quality Over Quantity

It’s tempting to opt out of TV buys as soon as budget cuts hit, and attempt to make do with cheaper (or free) digital alternatives.

The problem is that TV remains the most effective advertising medium, according to the Television Bureau of Advertising. So, how do you balance your company’s need to keep building a relationship with consumers with its need to conserve resources?

Smarter TV buys.

First, decide which consumer groups are most necessary to reach during this time of economic uncertainty. Then, focus your resources on finding the best way to reach those groups. This may mean buying only in a certain program, or shifting your spend from one daypart to another.

The key is to focus on the quality of the buy—the percentage of the audience that will be receptive to your creative—rather than taking a scattershot approach.

2. Automation Can Help

Using an automated ad buying system is a no-brainer when resources are stretched. Automated buying can offer improved targeting in addition to cutting down on time and effort put into media buying deals.

Advanced targeting, in particular, is crucial in an economic environment in which every dollar has to go further. If you’re a local auto dealership, you simply can’t afford to be running TV ads in programming that doesn’t reach potential car-buyers. But by allowing data to tell you where those potential car-buyers are, you can indeed afford TV advertising. And by automating the process that uses that data, you can afford to shift resources to the most important element of any campaign: creative.

3. Concentrate on Dynamite Creative

“Quality” doesn’t just refer to where you advertise. Quality creative can have five times as much impact on profits as budget allocation, according to Millward Brown.

Companies that have cultivated strong brand loyalty, and invest in continuing to strengthen that relationship with the consumer, will be far better able to weather the storm of consumer behavior changes that come with a recession.

That may mean convincing those who hold the purse strings that it’s wise not to cut back as much on the cost of creative. Creative is what consumers remember, after all—stories, not products, explained MediaPost. Brands that continue to tell stories will have an edge on those that opt out. By making this investment, you may emerge with a far stronger brand and consumer base once the economy has stabilized.

The word “recession” is an understandably scary one. But in an uncertain economic environment, these three lessons can help mitigate the economic factors affecting marketing. Perhaps the most important thing you can do is prepare: craft this kind of strategy before a recession hits so that you already have it ready to fire up.

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