6 min to read
Why does your business need Digital Marketing during a recession?
Digital Marketing Recession.
Remember Game of Thrones? Well, the recession is coming...
In the same way that the characters in the medieval epic series feared the arrival of the "White Walkers," today, every type of business, from large to small, prepares to confront the obstacles that a recession brings.
What are those obstacles?
Recessions put everyone in trouble. The entire productive sphere enters into crisis due to continuous economic stagnation. Consumers decide to save for only necessary expenses, companies seek to economize what they have to be able to survive in troubled times, and as a result, we see how they cut production costs; lenders are much more picky with credits and on the employee side, many fear that the following email in their inbox will be a layoff one due to the crisis facing the company.
Marketing is not foreign from all these cut costs, and many companies decide to save reserves by cutting advertising expenses. However, digital marketing can be a torch through all these dark times, which is why, in this article, we will discuss how digital marketing can help you get through these times.
We take it one step at a time, so let's answer first.
What is a recession, and could it happen in 2023?
A recession is a decline in economic activity that extends considerably. As Investopedia explains, a common symptom that a recession might be coming is that there have been two consecutive quarters of negative gross domestic product. National Bureau of Economic Research (NBER) professionals evaluate these situations based on factors like nonfarm payrolls, retail sales and industrial production.
But why is there a recession as of 2023? Or even more, is there really a recession happening now?
Since we faced many disastrous events during the last couple of years, including the COVID-19 pandemic, growing inflation and the conflict between Ukraine and Russia, many of us could think that we are on the edge of economic troubles. But luckily for business owners and investors, it could be quite the opposite.
While media and other economist experts predicted that 2023 would be the year of the inevitable recession, according to a CNN report on this topic, hiring has accelerated, adding an impressive 339,000 jobs in May. Experts consider this value a good factor as more jobs than the US economy added in 2019.
Regardless of this, we have seen some massive layoffs in technology companies. Some are closer to us, as happened on Facebook and Twitter.
While economists look at the future brightly due to high employment rates, Americans don't feel that way. In a survey, 76% of respondents described the economy as "out of shape."
Whatever the case, we never know what "surprises" could come at the end of the year or even in 2024, so it's always better to be ready.
How does a Recession impact customers?
As a business owner, you need to know how customers handle a possible recession so you can better plan how to manage them during one.
Nonetheless, there are two different types we want to explain: B2C and B2B customers.
For B2C, the first thought when a possible recession is coming is to panic. Consumers worry about how economic changes could affect their finances and lifestyle and decide to change their consumption. This change means spending less on wants and saving more for needs.
However, what happens within B2B?
A recession will entail structural changes within any company, the typical cost cuts, price changes or, in the worst case, staff reduction.
Even so, businesses need each other's services to survive during a recession, so abandoning alliances would be detrimental.
In times of recession, companies' minds should focus on strategies that help them improve their brand awareness, business growth opportunities, potential leads and business health.
This is where the dilemma lies within this article. In times of recession, the tool that can help you most achieve the objectives that will keep you afloat is digital marketing, which can be more accessible and efficient than traditional marketing strategies.
Although cutting marketing expenses seems like a viable solution for businesses, the reality is that saving what is necessary for these occasions is what can help you keep your business afloat.
Why is Digital Marketing essential during a recession?
One of the most common actions at the time of a recession is to cut costs in everything that is not essential. But marketing is still something of utmost importance for any brand during an economic downturn since these tools are what allow you to continue growing in the long term.
Disappearing on social media or other digital channels during a recession can make people forget about you in the spotlight, and that can cause more damage than giving your brand a break.
So, let's see what other reasons make digital marketing an appropriate option to surf the unstable waves of the economy.
Digital Marketing is more approachable than traditional marketing.
While mixing these two forms of advertising can be good for your brand, it is fair to give a point in favor of digital marketing during economic difficulties since digital strategies can be more monetarily accessible and, fortunately, as or more effective than the traditional ones of radio or television.
We could look for statistics on how much more people use the Internet than traditional media, but it's easy to see when going out or living with others.
The arrival of social networks as a means of communication and their accessibility through smartphones makes it easier to see advertising through our cell phones than through television.
In the same way, social media gives a more accessible opportunity to all types of companies to send their message through mass media, something that would be more difficult to do on TV.
Therefore, if you are worried about expenses, it is fair to say that digital marketing could save you some. If you want to know more about the debate between digital and traditional marketing, click here.
Data is gold!
You can understand how your customers behave with the data from your digital channels and website. This ability is important in a recession since, as we have seen, both types of clients take precautions during these times, and by being able to evaluate their behavior you can better see where you should cut costs and what not.
Data and analytics are essential to give your customers what they want and even offer personalized experiences that adapt to the consumption changes that could occur during these times.
Segment your audience.
Connecting with the personalization aspect of data and analytics, as you evaluate how your audience behaves during a recession, you can separate them into groups according to their preferences and new consuming habits.
In the first level, you can organize them depending on their preferred products or services. Still, you can go a little more specific and pick some inspirations on the categories the Harvard Business Review identified four customer segments you must keep in mind when marketing during a recession:
- Slam-on-the-breaks: customers that quit from spending.
- Pained but patient: customers who cut back on spending but want to be sure they’re getting the best deal.
- Comfortably well-off: customers who experience minimal impact from a recession.
- Live-for-today: customers who are still willing to spend despite a recession.
Since customers will still use Google, SEO and PPC are a necessity.
Economic debacles will never be an impediment for people to continue consuming content through Google, and that is why your brand or website must appear in the searches of your potential users.
For this, in digital marketing, we use search engine optimization. This tactic consists of finding out the "keywords" or terms that your general audience most often searches for to create content on all those topics they search for. By creating valuable content for all their questions, these users begin to see that you are an authority within your niche, and therefore, your chances of becoming customers increase.
These SEO strategies become long-term investments, creating current content for everything your audience searches for.
Once you have gained important spaces in the search engines, you can move on to the next step, pay-per-click (PPC), which consists of creating personalized ads that appear in your audience's searches, ultimately allowing you to expand your market.
There is less competition.
If many brands follow the instinct to cut costs on marketing and advertising during the recession, then this is your chance to finally surpass them. With fewer people spending and competing for people's attention, it's your time to launch the right campaigns and take advantage of a time of crisis.
With less competition, the most searched keywords can lower their price, and this allows you to rank more easily if you take advantage of the momentum.
Although the arrival of a recession seems to be ambiguous at the moment, it is always good to have a contingency plan for when the crisis may arrive.
Suppose you do not take accurate preventive measures. In that case, it is most likely that you will make wrong decisions at the time that hinder the growth of your company, such as completely removing expenses from your company's advertising and marketing.
In digital marketing, we learned that if you want to stand out within this entire tidal wave of business on the great World Wide Web, the most important thing is to know how to attract users' attention with accurate strategies.
If you need further advice with your digital marketing strategy, our team of experts can help you apply personalized strategies to your niche and, above all, to any socio-economic situation that may be occurring. If you want more information, contact us!