Mar'23·Jordi Capdevila·2 MIN
How brands can succeed during uncertain times
Today’s economic uncertainties point towards a possible recession in the near future. The first and natural reaction of consumers at times like these is to tighten spending and scrutinize the value of every cent being spent. Businesses also tend to react similarly and take their foot off the pedal when it comes to spending on marketing and advertising. The assumption is that consumers aren’t buying, so why advertise? There’s adequate evidence that shows otherwise.
Continuing to advertise during such uncertain times is strategic and needs to be carefully managed. Brands that are able to show genuine concern for the wants and needs of the consumer at this juncture will see themselves gaining lifelong customers. Brands need to portray that they are not merely fair-weather friends and are looking at a long term association through all kinds of economic conditions.
When the 2020 pandemic hit, numerous brands chose to either curb marketing activities or just sound like more of the same. The World Economic Forum calculated that total investment in advertising decreased by 10% in the USA and 12% in the UK during the first half of 2020. Big brands like IKEA and Nike that continued to invest in marketing at all the right places during the pandemic saw a positive recall with consumers.
How companies treat their investments in branding during uncertain times will be the difference between those who thrive once the economy stabilizes.
Companies need to spend wisely to ensure they are creating a positive image in the minds of consumers. Some guidelines are –
- Ensure your messaging isn’t tone-deaf to the plight of consumers in a specific region. Economic uncertainty impacts different people differently. It’s important to address everyone
- Demonstrate the value you are bringing to the user that would encourage them to make an expense at this point
- Be consistent with the messaging and ensure it focuses on long-term brand growth
While this is easy to preach, the question is how to implement this practice. Here is where contextual advertising plays a key role. Contextual advertising helps position content based on the surrounding content on the page rather than based on user behavior. Contextual advertising is the way forward with the eventual death of cookies and users demanding more accountability and control over their information usage.
While consumers tighten their grip on spending, the need for products and services does not stop. Brands need to prioritize hanging on to market share during the lean period. Studies show that the average brand could lose almost 15% of its business if a similarly sized competitor doubles its marketing investments. It’s a known fact that the cost of obtaining a new customer is significantly higher than that of retaining a customer. As long as brands place contextually relevant ads that deliver sincere messaging related to the consumer, ensuring brand growth and sales should be manageable.
Brands should audit their current classification of users based on possible spending priorities. Consumer spending is expected to change, impacting how consumers look for new products or services online. Adding ‘spending priority’ into the mix of context will play a crucial role in delivering the right kind of message. This would also include going back to product teams with feedback on how consumers want to consume products allowing them to create the proper packaging of the same product that would appeal to different buyer groups.
By continuing to invest in marketing and advertising, brands portray a sense of stability and comfort for consumers looking to spend their money. Contextual advertising also covers the critical areas of brand safety and brand suitability. Consumers will continue to be overly critical of how a brand projects itself and if they are adding additional value during such times.
It’s never too late to embrace contextual advertising. Not just in the context of economic uncertainty but to look at a long-term view of a ‘privacy-first’ cookieless digital world. Contextual targeting generates 2.5x greater interest in consumers than regular ads. Leveraging a data-driven approach to advertising with a long-term view in mind will help any brand. Do contact Seedtag to understand how we can wield contextual advertising to help deliver growth at this time.