A volatile economy can lead to increased speculation when planning a budget.
Often, the first budget to take a hit in a bear market is advertising and marketing. With low costs and high-efficiency, digital marketing can be the solution.
The volatility of the world economy lately has led to major speculation across almost every industry. Although we are entering into the 10th straight year of a bull market, the unease of investors leads many to believe that a bear market could be around the corner. According to investment strategist, Michael Tedeschi of Perspective Wealth Planning, "Bear markets on average last 1.4 years."
Marketing executives are rumored to always feel that their budget is the first on the chopping block if the market turns sour. They could have real reason to worry if they were in that position ten years ago. In the last major recession, promotional and advertising spend saw significant cuts.
Looking at the graph above however, there is definite skyrocket in spending following the 2009 recession. At that time social media and digital marketing were developing into the extremely powerful tools we know them as today, offering better insights and customer retargeting capabilities. This resiliency is why digital marketing offers you recession resistant promotional opportunities.
Here are five reasons why your business should maintain a digital marketing strategy and spend during a market downturn:
1. Cutting ad spend causes long-term damage
You most likely won’t feel the effects right away. A study done by ThinkVine showed how a firm that cut media spending maintained relatively level sales for about four months. When sales dipped by 20% they returned to the prior level of media spending but were never able to recover.
2. Use the downturn as a chance to outpace competitors
When one brand lifts their foot off the accelerator, the brand beside them will most likely pull ahead. Use the market volatility and any recession as an opportunity to out perform your competitors in terms of brand awareness and customer acquisition.
3. Capitalize on the media conversation
In 2009 Wal-Mart made lemonade out of lemons. By introducing an ad campaign explicitly saying “Save Money. Live Better.”, Wal-Mart saw an almost 3% increase in sales while compadetitors saw losses.
4. Capturing media attention is a requirement not a luxury
Marketing gives brand strategists insight into your competition and a hand into the consumer world. Without a well-written strategy, you’re flying blind against competitors. Marketing and advertising are not a luxury item, but a necessary component in the deployment of a brand consumers know about and want to buy.
5. Better performance management than traditional marketing
When you launch an online marketing campaign, you can spot underperforming content and perform a/b testing on parallel strategies. When it comes time to report back to management on the ROI a marketing campaign has had on sales, this alone makes digital marketing much better than its traditional counterpart.