Insights: Marketing Strategies For An Unpredictable Economy

With the state of the economy in flux, this week’s Westwood One blog looks at marketing effectiveness recommendations that advertisers can employ during times of financial uncertainty.

Economically, the gross domestic product growth rate has steadied, agencies and marketers have cooled on GDP growth sentiment, and most agency and marketer media spend intentions are leveling off with the notable exception of AM/FM radio.

In light of this, there are six best practices advertisers can follow to ensure their brands stay relevant and sales are protected:

1. Ensure share of voice exceeds the share of market. According to Millward Brown, during times of economic uncertainty, keeping a high share of voice is effective. In “Marketing During Recession: To Spend or Not To Spend,” they state, “If you increase your marketing investment at a time when competitors are reducing theirs, you should substantially increase the saliency of your brand. This could help you establish an advantage that could be maintained for many years.”
2. Continue to advertise: According to WARC/Millward Brown, it can take up to 5 years for brands to recover from “going dark.” Going dark is risky. According to a Nielsen ROI study commissioned by Westwood One for an auto aftermarket retailer, among those not exposed to AM/FM radio ads, the retailer saw decreases in the number of buying occasions (-13%), spend per trip (-15%), spend per buyer (-27%), number of buyers (-30%), market share (-42%), and total spend (-50%).
3. Optimize creative by testing ads for more memorable brand effects. According to a Nielsen Catalina Solutions study of nearly 500 TV, digital, and audio campaigns, creative is the number one sales driver. Combined, creative and reach represent 69% of total sales lift. Developing creative that resonates with consumers is time well spent for brands during times of economic uncertainty.
4. Shift more resources to brand building versus sales activation. During an economic recession, brands need to look at their long-term sales strategies as short-term sales spikes won’t ensure brand longevity. Focus instead on developing a deeper relationship with consumers through branding campaigns that will take root and make a lasting impact.
5. Place a greater emphasis on emotional campaigns to build your brand more strongly. Across all metrics, Binet and Field find emotional campaigns result in very large effects among consumers, far outweighing the impact of rational campaigns. During recessions, putting a stronger emphasis on campaigns that will touch consumers on an emotional level builds a brand more strongly. Emotions, feelings, and associations are more important than the message.
6. Shift budget to AM/FM radio to grow reach even if total budgets are reduced. In a recession, overall budgets tend to be reduced. However, even with a lower spend, AM/FM radio’s impact on a TV campaign is significant. By using an optimized plan of reallocated dollars, advertisers can utilize AM/FM radio’s power as a mass reach medium to make up for losses elsewhere. For example, for a furnishings retailer, even with a 10% total budget reduction, shifting 20% to AM/FM radio adds +49% in incremental campaign reach.