Recession-Proofing Your Ad Spend

Recession-Proofing Your Ad Spend

Rising inflation. Stock market turbulence. Tech layoffs. Lower gross domestic product

All signs point to an impending recession. 

Many industries have begun preparing for the impact of a recession. If you have worked in marketing long enough, you know your ad spend budgets get cut when times get tough. Even though marketing remains a pivotal practice that determines a brand’s success, many leaders feel like they have to reduce it to create a leaner organization. 

Regardless of industry, marketers need to proactively anticipate the conversations that will take place. They need to recognize marketing’s invaluable impact on growth and financial stability (just like finance and sales). And they need to develop optimization strategies to create additional business value. 

Marketing during a recession can turn a brand’s lackluster performance into success. Just ask Domino’s. Toyota, Amazon, Pizza Hut, and Taco Bell are other excellent examples. 

Our Professional Services team has started to get questions about recession-proofing, so we want to share the insights with other marketers who want to do the same. If you’re already bracing yourself for the recession on the horizon, here’s how you can turn the anxiety into productivity. 

Identify untapped audiences

If you worry your existing audiences may undergo behavior shifts due to recession trends, stay ahead of potential performance issues by broadening your customer base.

Dan Schlung, Postclick’s VP of Professional Services, adds: 

Investors are often wary of increasing ad spend during a recession. However, mounting evidence indicates that recessions are among the best times to increase investment in marketing.

That’s because recessions provide marketers with more access to “blue oceans,” or niche markets without a lot of competition. 

What aspects of recessions make it possible to reach new audiences more easily?

  1. Noise reduction: Some marketers will cut their spend down to keep their jobs, which frees up space for those who don’t stop advertising.
  2. Cost savings: When demand decreases for the aforementioned reasons, so do advertising costs.
  3. Less brand loyalty: When brands stop advertising and staying top of mind, their customers forget about them, leaving the door open for competition.

Use these facets of a recession to your brand’s advantage, with one small caveat. Though you may divert some of your budget in search of new audiences, don’t forget about your bread-and-butter customers. Diversifying your segmentation and budgets will help your brand continue to succeed. 

Fine-tune campaigns

Take a hard look at your performance metrics and devote energy to fixing the lowest performers. If you decide to make strategic changes, reallocate, rather than cut, budgets. 

Your first instinct may be to examine your digital advertising campaign audiences and ad creative. When those appear to be working well, here are some other elements to review:

  • Email and text message database audiences—which are also a good place to identify underserved segments
  • Audiences segments with high CTRs, but low CvRs
  • Landing pages with low conversion rates

Once you identify gaps, experiment and optimize to gain insight and work out the kinks before the recession hits. It doesn’t have to take years or months—AI and machine learning make it more possible than ever to obtain results without sacrificing performance. 

As Dan adds:

Manual testing can be extraordinarily resource-intensive, but investment in AI/ML capabilities to inform and automate the process gives brands an edge in the face of economic pressure.

A recession is the worst time for a leaky bucket, but it’s not too late to plug up the holes. Make sure you use every chance you can to refine what you’ve already created.

Optimize conversions

One of the biggest fears we’re hearing about from our brand partners is about a narrower top of the sales funnel, and Dan says that’s likely to happen. “That’s why CRO is so crucial—when you have a smaller audience of leads due to economic inactivity, higher conversion rates can lead to the same amount of revenue.”

CVR percentages

CRO remains one of the easiest ways to control positive outcomes. Postclick’s Advertising Conversion CloudTM makes optimization more efficient and attainable for brands that need to act quickly. Our proprietary technology (combined with our human expertise) makes it possible to test landing pages to get the best possible conversion rates without sacrificing leads. It learns what performs and gets better with every conversion experience. 

That means more conversions, better ROAS, and greater revenue per visitor, without adding headcount.

Become a recession winner

Some of the most recognizable brands today found success because they seized recession opportunities. 

We created the Advertising Conversion Cloud to respond to adverse conditions—we refined it with more than a decade’s worth of data to meet any marketer’s needs. Discover what the platform is already achieving for marketers and schedule a consultation with our team to see the conversion lift Postclick can achieve for your business. Request a free conversion analysis here.

Sarah Flores
by Sarah Flores

Sarah is a copywriter at Postclick, where she specializes in creating customer-focused advertising in the digital age. She prides herself on developing content that unearths valuable insight while being simple to comprehend. When she’s not typing away on the keyboard, you’ll likely find her running on one of Austin’s many scenic trails.

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