Marketing in a recession is a fine balance – every penny you spend must contribute to your bottom line results. However too much caution is as much of a problem as too little. How do you decide what will deliver the best return on your digital marketing investment?
Recession? Yes or No?
When the economy gets smaller for two consecutive quarters it’s normally called a recession. The second quarter of 2023 saw marginal growth in the UK’s economy. Does that mean predictions of an imminent recession were wrong?
Increases in housing, energy and food costs are all expected to continue into next year. This reduces the likelihood of any economic growth, while unemployment and debt are still expected to rise. As consumers have less to spend, it’s likely all businesses will feel the effects.
Overall, the conclusion is that we might avoid a recession in 2023. However economic growth will remain slow and a question mark remains for 2024. So, whether there’s officially a recession or not, a good return on your digital marketing investment is more important than ever.
Minimising costs, maintaining a stable revenue stream and planning for growth are the top priorities. Companies that invest in marketing in a recession are also more likely to outperform their competitors as the economy improves.
Making robust digital marketing plans in a recession
Economic uncertainty could lead to reduced marketing budgets. Around the world most marketing leaders are feeling more pressure than ever to demonstrate return on investment (ROI). However, there are powerful arguments to be made based on what a robust digital marketing plan can deliver.
Making sure you can account for every cost centre in your marketing budget is essential. Targeting your digital marketing strategy to meet the needs of your key audiences makes sure you achieve the best returns. These are the basics.
The next step is to improve your understanding of increasingly complex customer journeys to give you a competitive advantage. As third-party cookies are phased out from mid-2024 creative marketers can take the high ground with improved personalisation.
Building strong customer relationships will support a customer retention strategy, which is more cost-effective than customer acquisition.
Price versus value
Many companies have relied on online promotions to maintain sales. With margins under even greater pressure during the economic downturn this approach requires refinement and careful targeting. Ongoing price reductions could damage profitability, so a value-based approach is more sustainable.
In-depth market analysis will provide insights into your customers’ greatest needs and pain points. Providing relatable examples of how you solve their problems should become a cornerstone of your marketing strategy. Highlighting your sustainability credentials should also be on the priority list.
Over half of your customers are likely to buy elsewhere if your product information isn’t good. Now is the right time to review and improve your product information management processes.
Increases in housing, energy and food costs are all expected to continue into next year. This reduces the likelihood of any economic growth, while unemployment and debt are still expected to rise. As consumers have less to spend, it’s likely all businesses will feel the effects.
Overall, the conclusion is that we might avoid a recession in 2023. However economic growth will remain slow and a question mark remains for 2024. So, whether there’s officially a recession or not, a good return on your digital marketing investment is more important than ever.
Minimising costs, maintaining a stable revenue stream and planning for growth are the top priorities. Companies that invest in marketing in a recession are also more likely to outperform their competitors as the economy improves.
Share of market
As customers change their spending habits in the economic downturn competition for discretionary spending increases. An efficient, effective and measurable digital marketing strategy will help you secure your share of the market.
As customers look for the best products and offers online research will be more important. Carefully planned search engine optimisation (SEO) will lead customers directly to your ecommerce website. Understanding their needs and preferences allows you to optimise your choice of keywords and your pay per click (PPC) advertising. Easy, pleasurable and engaging online experiences with minimal barriers to purchase can tip the balance in your favour.
Online ‘window shopping’ could mean your ecommerce website traffic looks stable. However, closely monitoring conversion rates could tell a different story. Modelling different purchasing patterns based on accurate near real-time data will help you prepare. If you don’t already have a comprehensive business system integration strategy this should move up your priority list quickly.
An agile approach will allow you to quickly shift audience targeting based on accurate information. This will allow you to focus on the segments most likely to convert, helping to maintain your revenue streams.
Touchpoint optimisation
It isn’t always easy to know who is simply browsing and who is likely to make a purchase. Analysing all your online and offline touchpoints can improve your sales funnel with micro-conversions throughout the buying journey.
Even without third-party cookies, machine learning (ML) and artificial intelligence (AI) can help you refine your approach during a recession. Collecting available data using intelligent tools helps you make informed decisions about your digital marketing strategy. You can analyse large amounts of behavioural data to predict the probability of conversions. Campaign planning and budget allocation are more effective, providing a better return on your advertising spend.
Effective attribution
More traffic to your ecommerce website doesn’t guarantee increased revenue. ML and AI can also improve attribution and enhance the quality of traffic to your site. You can assess which site visitors are most likely to convert in the future. You can even predict conversions before they happen to improve your smart bidding strategy.
You’ll have more details about the most effective customer journeys and how different touchpoints affect conversion rates. You can improve your ecommerce website’s navigation and collect valuable data for future marketing campaigns.
Conclusion
Digital marketing has a direct impact on the performance of your business, even during a recession. A proactive approach will help maintain your current position and prepare for the future. A focused strategy will help you navigate financial uncertainties and respond as the economy improves.
The experienced team at Williams Commerce can help you build a robust and sustainable digital marketing strategy.
