A flexible marketing strategy is critical for brands, especially when including cultural shifts into a holistic view of that strategy. One of the cultural facets that can have a huge impact on brands is the economy. While Americans have spent the last two years tightening their purse strings in response to historic inflation, low unemployment has kept the U.S. job market strong, leading to divided opinions about the overall health of the economy.
Amid the push and pull of financial analysts’ opinions, many brands are developing marketing strategies that can account for a variety of fiscal environments. And while no one wants to face economic uncertainty, there are useful tactics that have helped brands stay successful and top-of-mind — even when consumer budgets have been stretched thin.
Historical data from as far back as the 1930s shows that brands that prioritize their marketing budgets during economic uncertainty come out on the other side with greater market share and brand awareness. One of the best examples of this is Target. In 2000, Target increased its marketing spend by 20% over pre-recession levels — an arguably unexpected choice given the cultural and financial environment of the time. That decision paid off, resulting in a 40% increase in sales over the course of the recession and positioning them as a brand leader coming out of the downturn.
As consumers reexamine their budgets, one of the first strategies to consider is targeting core audiences. Loyal customers are most likely to be brand ambassadors — and they typically stick with a brand they know and love even when their wallets are stretched. Studies show that companies that focused on their most loyal customers during an economically stressful period had higher sales growth than their peers in the years following a significant economic event.
Another option when considering campaign execution is to flatten the funnel by moving from brand awareness to consideration more quickly. While some brands focus their marketing exclusively on lower-funnel executions (mostly around conversion), awareness and maintaining a strong brand voice are also critically important. By placing a dual focus on conversion-minded advertising and awareness campaigns, brands position themselves well with today’s consumers without eroding their chances of winning new ones in the following years. Market research proves that younger consumers often move from awareness through consideration to conversion much faster than older generations, and studies show that solid brands gain momentum through economic uncertainty, emerging afterward with higher brand value growth than those that pull back on brand awareness.
“Moving forward, brands need to find the right balance of making sure that their brand promise – the essence that they want to communicate – is still present in their advertising, but also emphasizing the idea of value and helping the consumer get the best deal or afford the things in their lives that they need.”Anne Ryan, VP of Brand Strategy at Brownstein
In recent years, brands have been more collaborative, looking for partnerships on campaign launches and cross-promoting across channels where they perform well. This year, General Mills debuted new products exclusively on Walmart Connect, an omnichannel advertising platform that allowed General Mills to reach consumers through retail media, Walmart’s website, and display ads. In addition to the advertising exclusivity, the new products were only sold at Walmart, creating additional buzz for fans of both brands.
Of course, not all brands can partner with a retail giant to launch new products. Since the pandemic, influencer marketing has exploded in popularity as content creators across the social media landscape cultivate audiences interested in niches from fitness to DIY home projects. Partnering with these influencers gives brands cost-effective, ROI-driven campaigns that create awareness and, when appropriately executed, cultivate loyal fans.
Conversations around economic concerns seem to be everywhere, but brands should use those conversations as inspiration to adapt their marketing thoughtfully. Through a strategic approach that focuses on customer loyalty and flattens the funnel, brands can continue to succeed — no matter what the future holds.