At the time of writing, the Bank of England has raised its interest rates for the sixth time this year and inflation is at a 32-year high. It is strongly believed that Britain’s economy is now in recession. But what does that mean for businesses?
Put simply, people have less money to spend. Less disposable income to splash out on the things that they do not necessarily need. In most instances, spare cash will be more carefully prioritised on needs over wants and businesses will no doubt struggle through this time of reduced spending, to get their share of the smaller disposable income “pot”. Should we then, as businesses, be considering a reduction in our marketing budgets and if so, where should we be spending if at all?
Why should advertisers keep spending during a recession?
In the 1981-82 recession, brands that continued to advertise saw growth of over 250% when compared to their competitors who either shrank or removed their marketing budgets.
In 2008, recession hit again, and many advertisers still reduced or removed their spends. The whole advertising market declined by 13%. What happened for those companies who continued their advertising? They had over 3.5 times more brand visibility.
Unfortunately, during a recession, many businesses do reduce their advertising spends or stop spending altogether. This creates opportunity for those who continue to market their brand. Utilising the reduced competitive landscape by increasing or even maintaining your spend is a sure fire way to boost brand awareness during a financial downturn and thus drive sales and maintain brand equity
2 key ways to advertise in a recession
Capitalise on recovery
“Brand advertising is not about profiting in recession; it is about capitalising on recovery.” – Peter Field, Independent marketing & advertising professional, public speaker & consultant.
Adjusting your advertising strategy to focus on building your brand throughout a recession can strengthen your recall and brand perceptions, especially with reduced competitive activity. By investing during the difficult times, you are future proofing your brand and supporting its future growth, post-recession.
By utilising the clearer competitive landscape, you could benefit like those businesses in 2008, with over 3 times your visibility. Better yet, you could see huge growth by riding the storm like those businesses after the 1980’s recession.
The proof is in the cereal
In the late 1800’s and early 1900’s the biggest name in breakfast was Post Cereals. It was founded in 1895 by C.W Post and around a decade later, W.K.Kellogg founded Kellogg’s Cereal. By the 1920’s, they were both the forefront of the cereal market.
In the 1930’s recession hit and guess who continued to spend on brand awareness campaigns? The one that did remains one of the most recognisable brands on the planet and the other is lost in obscurity.
Direct to disposable income pot
As you read in the first section of this article, consumers disposable income is reducing, but it is important to remember it is not gone altogether. In fact, according to the Office for Budget Responsibility and the ONS, real household disposable income will reduce by 2.2%~ in the 22-23 financial year on a per person basis.
Although this is the worst reduction since the ONS began, it does not mean people will stop spending. What we should take from this, as advertisers, is that consumers will be spending more cautiously and wisely.
Our below the line strategy then, should appeal to the spender’s better nature during this time. Copy should pull on the financial heartstrings, imagery should sympathise with the current climate and call to actions should be tailored to the situation we are all currently experiencing. We also need to pick the right media. Media that, when read, can really hit home and drive actions.
Why leaflet advertising in the home during a recession?
When it comes to brand awareness, your goal as a marketing team is predominantly impressions. Digital impressions as we all know are cheap, but usually inaccurate. A recorded impression in the digital world usually means ad served rather than ad seen.
In the print world, if your leaflet lands on the doormat, it essentially must be seen. Even if it is heading for the recycling, it literally must be engaged with.
It is also engaged with where people are most comfortable and where they are more likely to be during tough financial times, at home.
It was a similar story during the pandemic. Lockdowns forced people to stay inside. Guess what happened to the engagement rates of leaflet advertising during that time? They grew 15%^ year on year and each leaflet reached over 4^ people on average.
They also drove actions, with almost 9%^^ of all leaflets driving the reader online to the advertiser’s website. Leaflets are often mistaken as broadcast media, simply growing your brand but their targeted nature also supports your action based digital media. Both impacts are true, and we have proof, from a similar time of economic struggle.
Literally lifesaving leaflets
The Royal National Lifeboat Institution relies on donations to stay afloat and save lives at sea. During the height of the coronavirus pandemic, this did not change but, donations dwindled. Their target of £880K in donations looked unreachable and their typical action based digital ads where not delivering as they should.
Savvy spenders as they are, RNLI turned to print. Utilising door to door leaflet advertising, they reached the right homes and hearts with tangible, hard-hitting print media. They exceeded their target after just nine weeks, with £951k raised from 27,716 donations, 45 per cent of those from new donors.
No matter your business size or sector, you will no doubt be heading for some tough times as the economy struggles. As we all ride the storm and stay afloat, it is important to keep your marketing budgets going where possible and switch your strategy to focus on strong brand awareness and action driving campaigns. Leaflets are a proven way to grow your brand and drive commercial actions inside and out of tough financial times. They are also cost-effective too and can be targeted, printed, and delivered for as little as 7 pence per leaflet.
Sign up to Leafletdrop today or speak to our Doordrop experts to see how you can make the most of the recession with door-to-door leaflet advertising.