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Recession Ads: What Are They Should Your Business Use Them?

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While the US isn’t technically in a recession as of Q1 2023, businesses and consumers are certainly feeling the burn of nationwide economic strain.1 And while some economists are optimistic about Q2 and beyond, an overwhelming majority of Americans are preparing for more economic downturn.2

With consumers tightening their purse strings, businesses may be conflicted about their advertising strategies for the coming year. Should brands proceed as normal even if the US does earn an official recession diagnosis next quarter?

In this guide, we’re breaking down everything businesses need to know about a recession marketing strategy—some defining features of recession ads of the past, what recent historical data says about marketing during an economic downturn and advertising advice for businesses in the face of any bleak predictions.

While it might sound surprising, data from past recessions indicates that sticking with existing marketing plans—or even investing more into advertising—may be best if you are hoping to become a recession proof business in the long run.3

Hallmarks of the “recession ad”

Before we get into the statistics, let’s break down what recession ads have looked like in the past—the kinds of messages that retain customer loyalty despite financial insecurities during The Great Recession of 2008.

Leveraging humanity

2008’s recession ads often leaned upon the power of human optimism to send uplifting, warm messages to consumers.4 These generally positive, sometimes empathetic and often funny approaches produced a few profound effects during the 2008 recession:4

  • They defied expectations – Where consumers expected somewhat glum content, brands instead delivered lightheartedness. Messages were sensitive to consumers’ struggles but didn’t leverage despair.
  • They highlighted brands’ acts of generosity – “Feel good” ads from major household name brands generally weren’t abstract or lofty—instead, they highlighted how brands had been doing their part to alleviate everyday distress.
  • They prevented consumer alienation – Recessions typically force decreased consumption, but by creating contextualized content with empathetic messaging, brands avoided alienating consumers who had to be frugal to stay afloat.

Promising value

A 2009 Harvard Business Review report on consumer behavior and advertising in 2008 encouraged businesses to focus on value in their marketing campaigns and business operations, especially when targeting lower- and middle-class segments.5

The analysts specifically recommended:

  • Emphasizing low prices.
  • Promoting sales and discounts.
  • Offering loyalty rewards (even to infrequent or low spenders).
  • Highlighting product or service quality for the price.

Many brands followed these recommendations by blending value-related messaging into print advertising and some digital marketing campaigns. The HBR analysts noted that brands that both promised and delivered on value continued to have repeat customers throughout the recession—and enjoyed an uptick in business once economic activity began to recover.

Maintaining signature branding

With a combination of empathetic and value-focused messaging, recession ads in 2008 centered contextual sensitivity—but companies mostly did so without forsaking all-important brand personality.4

Despite uncertain economic conditions, businesses were still investing in their unique brands—the voices, personas and images that embodied their brands and resonated with consumers.

Both the Harvard Business Review analysis mentioned above and other accounts of 2008 recession ads note that this continued marketing spending was a long-game tactic. Household name brands kept their names at the front of consumers’ minds in hopes that loyal customers would return once they financially recovered—and this proved to be a generally successful strategy. (Don’t worry; we’ll share the full stats in a bit.)4

Learning from past recessions

Now that we’ve identified some common themes in recession ads, we can start laying the groundwork for a recession-era marketing strategy. What can we learn from brands who made it through past recessions, and how can brands incorporate these lessons into their marketing efforts?

Keep advertising

Data overwhelmingly suggest that businesses already investing in marketing should stick as closely to their current strategy as possible once a recession hits. During both the recessions in the early 1980s and 2008, brands who opted to keep advertising during economic crises came out on top over those that slashed their marketing budget:3

  • A study examining 600 companies’ advertising practices during the 1980s recession discovered that:
  • Brands that maintained or raised their level of marketing during the downturn had significantly higher sales after the economy recovered.
  • Brands that aggressively advertised during the early 1980s secured over 250% more sales than companies that stopped advertising completely during the crisis.
  • A review of 2008-era tactics revealed that 60% of the businesses that stopped all TV ad spending for six months saw a 24% decrease in brand use and a 28% decrease in brand image.

At least according to historical precedent, maintaining as much marketing horsepower as they can during a recession could be a savvy choice for businesses facing economic uncertainty. In the past, brands that kept investing in ads generally found post-recession success.

Make a recession-specific strategy

The messaging and tone changes in advertising during the 2008 recession (and the generally positive impacts of that strategy) indicate the need for a recession-specific marketing strategy.

While we’ll break down some more strategic tips later in this article, let’s take note of a few potential recession-specific tactics your brand might consider as Q2 2023 approaches, like:

  • Shifting marketing spend toward media channels with the highest ROIs
  • Performing ongoing market research and tweaking your strategy accordingly
  • Partnering with another brand for marketing to share the cost and risk

Businesses that aren’t sure where to start may even consider calling in reinforcements, like a growth marketing firm with recession expertise.

For marketing leaders looking for additional insights, we recently published a guide for businesses looking to generate revenue in 2023: The CMO’s Guide for Igniting Profitable Growth in 2023. Review the highlight reel in our recent blog post or download the full guide for in-depth tips.

Follow through

Marketing experts have noted that brands that lived up to their promises of value and positive social impact earned more consumer trust, loyalty and sales than their counterparts during the 2008 recession.4

In 2023, businesses that adapt their messaging to highlight the humanity of their brands or showcase their positive roles in their communities during economic downturn should be prepared to continue embodying this message in the long term (and provide receipts when asked). As of 2021, more than half of consumers considered a brand’s social, environmental and governance activities before making a purchase—customers deeply care about the impacts their chosen brands make.6

Advertising in today’s recession

In addition to the important lessons from previous eras, what should businesses know about recession ads in today’s marketing landscape? Consider the tactics below as you start building your strategy.

Center transparency

Transparency is more important to today’s consumers than ever before. During a period when consumers will be spending more conservatively, customer trust is critical.

For businesses that choose to be more open with consumers during their recession marketing campaign, the following tasks could help increase overall transparency and help brands leverage the right tools for communicating with the public:7

  • Assess current positioning – Businesses interested in transparency don’t have to share every operational detail with the public. To best control their narratives, brands should identify which processes could be shared with the public (and which should remain confidential).
  • Determine consumer priorities – Businesses should focus on sharing the information that their customers are primarily looking for. If a brand’s user group is generally more concerned with environmentally responsible manufacturing practices than sustainable materials sourcing, for instance, the company should leverage the former more than the latter in its communication plan.
  • Communicate effectively – In their pursuit of transparency, brands should consider adding information about their operations to their website, using social media to share statistics, sending out an annual report via email or finding other appropriate ways to show that they’re willing to communicate with consumers. Evaluate consumers’ responses to data via different channels (and even using A/B testing to determine the most popular stance) and choose the methods that produce the best impact.

Leverage tech tools

Digital marketing is unavoidable for today’s brands—4.9 billion people use social media around the globe, and Google produces results for over 6.9 billion searches each day.8,9

That said, today’s digital marketing landscape requires attention to multiple channels (not just social media and search engine marketing). To reach digitally-fluent consumers in a time- and cost-effective way across numerous channels, marketers would be wise to invest in sophisticated marketing tools to optimize their advertising processes ahead of a recession.

Power Digital’s proprietary engine, nova, is one such platform. High-fidelity analytic and strategic tools that bridge the gap between human intelligence and data could be the difference between sub-optimal advertising spending and efficient, impactful recession-era campaigns.

Prepare a recession-proof growth strategy for 2023

In both the early 1980s and late 2000s, recession ads were critical to successful brands’ long-term survival after the economy recovered. And while the US isn’t experiencing a dictionary-definition recession as of Q1 2023, today’s companies should still consider the impacts of marketing in previous recessions, understand how tactics in recent history could be useful in today’s advertising and partner with an experienced digital marketing agency.

Growing during a recession is no small feat—and at Power Digital, we love a challenge. We’re a tech-enabled growth firm using powerful technologies (like nova) and decades of combined digital expertise to provide end-to-end growth solutions that uncover brands’ full potential.

For businesses ready to grow in 2023, the sky’s the limit. Reach out to Power Digital to get started.

 

Sources:

  1. NerdWallet. Are We in a Recession?. https://www.nerdwallet.com/article/finance/are-we-in-a-recession
  2. MarketWatch. Almost 80% of Americans Think the US Will Experience Great Economic Difficulty in 2023. https://www.marketwatch.com/story/almost-80-of-americans-think-the-u-s-will-experience-great-economic-difficulty-in-2023-11672768380
  3. VentureBeat. Why You Shouldn’t Cut Back on Marketing During a Recession. https://venturebeat.com/business/why-you-shouldnt-cut-back-on-marketing-during-a-recession/
  4. LinkedIn. Advertising in Recession – Long, Short, or Dark?. https://www.linkedin.com/business/marketing/blog/linkedin-ads/advertising-in-recession-long-short-or-dark
  5. Harvard Business Review. How to Market in a Downturn. https://hbr.org/2009/04/how-to-market-in-a-downturn-2
  6. Association for Supply Chain Management. Consumers Care About Corporate Social Responsibility – And So Should You. https://www.ascm.org/ascm-insights/consumers-care-about-corporate-social-responsibility–and-so-should-you/
  7. Forbes. Transparency Is No Longer an Option; It’s a Must. https://www.forbes.com/sites/forbesbusinesscouncil/2021/05/04/transparency-is-no-longer-an-option-its-a-must/?sh=4edd075fe7d0
  8. DemandSage. Social Media Users – How Many People Use Social Media in 2023. https://www.demandsage.com/social-media-users/
  9. TechJury. The Stupendous World of Google Search Statistics. https://techjury.net/blog/google-search-statistics/#gref