Media Brand

Recession-proof your ad spend with these 3 tips

By Hunter Sunrise | Senior vice-president and head of marketing

August 2, 2022 | 6 min read

As the possibility of economic downturn becomes an increasingly more likely reality, Postclick’s senior vice-president and head of marketing Hunter Sunrise shares timeless tips for making a brand’s ad dollars stretch through performance optimization.

From rising inflation to stock market turbulence, tech layoffs and lower GDP, all signs point to an impending recession. ‘

When times get tough, advertising budgets end up on the chopping block. But that can have mixed results. Marketing, if deployed strategically, is fundamental to success — no matter the financial climate. Shifting focus to optimize existing budgets can turn lackluster performance into knockout success — even during a recession.

Piggy bank collage

/ Adobe Stock

Whether a brand’s approach is to increase or decrease ad spend during a time like this — don’t panic, prepare. Here are a few simple steps to help marketers make more from their advertising budgets, despite turbulent conditions.

Identify untapped audiences

Securing referrals, capturing look-a-like audiences, accelerating rural expansion, launching a new subscription or add-on-offering — all of these, and more, are on the table during an economic downswing. Marketers must ask themselves, “Who are the audiences we’ve wanted to tap into, but haven’t yet? Where do analytics point to test new audiences?”

Digital advertising spend is already on the downswing. However, mounting evidence indicates that recessions are among the best times to increase investment in marketing. Doing so demonstrates financial stability to customers, provides additional brand recognition, further positions the brand as a category leader and challenges the competition who have quieted their advertising presence. As timid brands exit the marketplace, they free up potential customers, which can drive down the cost of ads.

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Pair cash-strapped customers reconsidering their purchasing habits with less expensive access to new target audiences, and one has a recipe for efficient spend that grows the customer base. Maintaining continuity with advertising can reach new customers and strengthen an existing audience. A classic example: McDonalds cut ad spend during the recession of the early 90s, creating space for competitors like Taco Bell and Pizza Hut to swoop in.

While diverting some budget in search of new audiences, don’t forget bread-and-butter customers. Diversifying segmentation and budgets will help a brand continue to succeed.

Pro tip: Some of those high-intent, (often expensive) mid-funnel search terms may be at a discount soon. Keep an eye on proper company promotion search costs in the coming months; the market is already seeing a decline.

Fine-tune campaigns

Take a hard look at performance metrics and commit to fixing low performers. When making strategic changes, reallocate rather than slash budgets. For instance, consider shifting to a shorter — or more direct — path to conversion on ad sets.

Start by examining digital advertising campaign audiences and ad creative — but don’t stop there. Evaluate all channels, including email, SMS and landing page performance, and look for opportunities to improve conversion rates. If audience segments show high click-through rates but low conversion rates, a key problem has been identified. A click that doesn’t convert is the number one factor in wasted ad spend.

Use every chance to refine what the brand is already running in market — there’s a steep cost incline when deploying new ad sets. Then, as competitors quiet, stay the course to increase share of voice. Then, reduce costs by increasing branded search terms while also honing a retargeting strategy as brand awareness soars.

Pro tip: Look closely at opportunities to double down on growing lifetime value and net promoter score through loyalty, repeat purchases and referral programs as spend is tuned.

Optimize conversions

One of the biggest fears of going into a recession is a narrower top-of-funnel. When a brand has a smaller audience of leads due to economic inactivity, higher conversion rates can lead to the same amount of revenue. So, what are marketers supposed to do? Meet conversion rate optimization — the marketer’s new best friend.

To optimize conversion rates, marketers will need a set of audience data and performance data to work with. Then, begin testing to optimize performance of various marketing efforts.

Clearly define the conversion journey for the brand’s audience segment. Consider: “How many steps are required between click and purchase? What stage of the funnel are we focusing on? What is the primary action I want them to take?” Then, use audience data — demographic, psychographic, behavioral and geographic data points — to understand specific audiences. Construct clear hypotheses about audiences and their motivations. Then validate or disprove hypotheses through testing, adjusting accordingly.

If manual experiments are too heavy a lift for a given organization, consider investing in a platform or tool that supports conversion rate optimization by leveraging AI and machine learning to speed testing. When designing CRO experiments, think of the ad-to-page relationship as a hero’s journey. Know the audience, create an ad that begins the story and pays off after they click and arrive at the destination.

Recession-proofing ad spend through activities like these isn’t just effective during hard economic times. Optimized campaigns help every marketer’s digital ad spend work harder in any circumstance. With careful planning and a bit of confidence, any brand can make it through a recession more successfully than ever. Smart brands are both born and grown during recessions.

Hunter Sunrise is senior vice-president and head of marketing at Postclick.

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