With the COVID-19 pandemic still lingering, the ongoing war in Ukraine putting more pressure on surging interest rates and lockdowns in China potentially disrupting supply chains, the economic outlook is clouded by uncertainties.
Economists warn the United States could be headed for a recession by late next year or early 2024 as inflation reverberates throughout the global economy. With a looming recession, businesses and industry leaders find themselves in poorly charted waters.
Is digital marketing during an economic downturn a good strategy?
“Digital marketing is not something to turn off during a recession,” said Josiah Wiles, Vice President of Client Experience at Thrive. “People will continue to search for products and services online, even if the overall demand has decreased. In fact, this is probably the most valuable marketing investment you can make during an economic downturn because it allows you to get in front of the people who are either actively looking for what you offer or who most closely fit your target audience.”
Digital marketing campaign experts agree that from a long-term standpoint, robust online marketing tactics are the best investment you can make to protect your business during an economic decline. Recession proof business marketing strategies matter now more than ever. Strengthen your digital marketing strategies and protect your business from a recession with help from Thrive.
The Risk of Recession in 2023 and Beyond
The recession chatter has been building over the past couple of months, causing worry among businesses and organizations across the U.S. Economists fear the Federal Reserve’s plans to rapidly increase interest rates to combat inflation could lead to a severe economic downturn.
In April 2022, Deutsche Bank was the first major bank to predict a U.S. recession, and investors share the same outlook. According to a Bloomberg Markets Live survey, approximately 48 percent of investors anticipate an economic slowdown by 2023. Another 21 percent expect it to happen in 2024, while 15 percent forecast a 2022 recession.
On Easter Sunday, Jan Hatzius, chief economist at Goldman Sachs Group Inc., published a report indicating a 35 percent chance of U.S. recession over the next two years. Hatzius’ claims were based on historical patterns showing that 11 out of 14 tightening cycles or interest rate hikes since World War II were followed by an economic downturn within two years.
Data published by Statista Research Department back these prognoses, forecasting a 6.14 percent probability of falling into another economic slowdown by February 2023. And then there is former Treasury Secretary Lawrence Summers under President Bill Clinton, who sees an 80 percent chance of U.S. recession by 2023.
Could we be looking at a 2022 recession?
Although an economic slowdown is likely imminent, experts say a 2022 recession is improbable. The White House and the International Monetary Fund share the same optimism of a strong gross domestic product (GDP) growth in 2022, estimated at 3.7 percent.
However, Susan Wachter, professor of real estate and finance at Wharton School of the University of Pennsylvania, stated that “… the longer inflation persists, the more likely we are to enter into a wage-price spiral requiring the Fed to hit the brakes hard.”
With so much riding on the timing of a recession, the best course is to learn how to prepare your business for a recession.
“Digital marketing is an investment that helps during good times and tough times,” said Amber Warner, a conversion rate optimization strategist at Thrive. “During a recession isn’t a time to ‘fix’ your website. Gear up your marketing budget leading up to a recession so your business will be prepared. If anything, make an investment. Now is the time to make sure your website is working for your business so that it’s working during difficult times.”
Build recession proof business marketing tactics now to move the needle in your organization and protect your business against economic upheaval.
How To Prepare Your Business for a Recession
If there’s one thing that sets recession proof businesses apart from the competition, it’s their commitment to investing in business planning for a recession as early as possible. Before and during downturns, marketers must balance their digital marketing campaign efforts to limit the impact of the potential upheaval on their business.
According to Aaron Whittaker, Vice President of Demand Generation at Thrive, building the right digital marketing strategies now is the best way to ensure your business is prepared for what’s to come. It’s crucial to leverage the right digital marketing ideas, strategies and technology to guarantee your business’s longevity through the next impending economic slump.
Have you begun business planning for a recession? Follow these digital marketing tips on how to prepare your business for a recession and protect your brand as much as possible:
1. Invest in Better Online Presence
One of the pillars of recession proof businesses is their ability to build and maintain a robust digital presence no matter the economic condition. According to Tim Clarke, Thrive’s senior reputation manager, maintaining a strong digital presence allows you to take a larger market share of eCommerce sales now and if and when a recession starts.
Invest in market research, build a responsive website and play the long game with search engine optimization (SEO) and pay-per-click (PPC) marketing to stay top of mind with your target audience.
“Having a major focus on SEO and PPC is probably the safest bet,” said Wiles. “If you are doing these successfully, it is almost guaranteeing that your brand is in front of people who are looking to buy.”
Building an online presence has become a top priority for companies over the last few years. And with a recession looming, maintaining a better digital presence is even more vital in staying on potential customers’ radar online. This way, regardless of whether prospects are looking for your brand in particular or in need of the services or products you offer, they will find you and eventually become your clients when they are ready to convert.
2. Don’t Cut Your Marketing Budget
During an economic fallout, brands face the dilemma of whether to cut their marketing budget, pause marketing campaigns or double down on their digital marketing strategies.
For some, it is quite logical to stop marketing in a recession. After all, spending big on digital marketing services can seem counterintuitive when revenues are down. Take 2020, for example. Digital marketing campaign spending plummeted around the same time 255 million full-time jobs were lost worldwide. Even Google had to cut its marketing budget by 50 percent due to reduced advertising earnings during the COVID-19 pandemic.
So why should you continue building your digital marketing plan and investing in digital marketing services?
Studies have consistently shown that brands that continue marketing in a recession are the most likely to survive. As the noise level drops during an economic decline, many companies cut back on their ad spending. This is an opportunity to project your corporate stability during challenging times. Continue your digital marketing campaign activities or at the very least scale it back a little, but never to the point where you completely cease them.
“In order to keep business flowing, make sure your digital marketing strategy is in place,” said Warner. “Business won’t completely stop. If you stop digital marketing, be prepared for your competitors to get your potential customers more easily. Those who make a consistent investment in digital marketing services will see the most benefit.”
Wesley Wessels, Thrive’s paid social media strategist agrees with Warner, highlighting that when businesses start to feel the pinch of the recession, there will be less competition in the digital marketing space. This is your best chance to attract new customers to your business and ensure you don’t suffer during the economic downturn.
3. Optimize Your Website Now
Examine your website. Does it generate leads for your business 24 hours a day or does it need improvement? Get an expert consultation from a reputable web design company if you’re not sure what part of your website could be more optimal.
Web design and development agencies have in-house conversion rate optimization (CRO) specialists who perform thorough website audits and analyses to gauge your site interactions and determine elements you need to optimize to achieve your desired results.
“Conversion rate optimization helps make the most of the traffic you have,” said Warner. “Take a look at the data on your website in order to boost the customer experience. Some examples of things to look at include: what pages are visited most often, which pages get the least engagement, cart abandonment and overall customer behavior.
Gather this information to form a data-based plan. That way, you’ll know any improvements you make to your website are more likely to have an impact on your bottom line. This, in turn, will offer a return on investment.”
Conversion rate optimization can lower your acquisition costs by making the most of your website. For example, if you want to sell more products online, now’s the best time to optimize those product pages on your website. By doing this, you are increasing revenue per visitor.
Have an expert take a look at your website. They will be able to provide digital marketing tips on reducing the number of people who bounce out of the page or don’t take your desired actions.
4. Develop a Results-Driven Marketing Strategy
Don’t lose out on leads that could have been customers if you had invested in a more laser-focused digital marketing strategy.
“People continue to do a lot of their shopping and search online no matter what the economic conditions are,” said Clarke. “You have to invest early [in a holistic digital marketing strategy] to be ready to capitalize when the economy inevitably goes up again.”
A comprehensive approach to digital marketing boosts your business performance. It also allows you to generate more traffic now so that when the recession comes, you have a steady stream of traffic already. This will reduce the negative impact of an economic slump on your business.
Consider setting up an eCommerce store to sell your products or services. Add an email capture on your website. Use marketing automation to streamline your SMS and email marketing campaigns. When you execute a digital marketing plan well, nothing can hold it back — not even a recession.
5. Ramp Up Your SEO and Link Building Efforts
Invest in SEO and link building to create a strong organic SEO foundation to rely on for years ahead and continuously bring in a steady amount of leads. As we approach a recession and consumer behavior starts to shift, ranking at or close to the top for valuable keywords will be an incredibly valuable safety net.
“SEO is a vital part of any business,” said Matt Garrett, Thrive’s SEO Growth Engineer. “Ranking for your core discovery terms is always important. You can future-proof your business by thinking about how people would need you during different economic statuses and making content/pages for those things.
For instance, if it’s looking like avocados are going to have a shortage, and you are a recipe site, making recipes for common avocado dishes with alternatives to avocado gives you the time to gain traction and traffic for those things before people start searching for it.”
Fear of making the wrong decision is a primary motivator in consumers’ purchasing decisions. Creating quality content and improving your SEO efforts enhance your perceived expertise and increase your chances of getting your website to the top of search results.
Additionally, incorporating SEO and link building efforts into your digital marketing plan allows you to attract the maximum sales and leads within your niche market.
“From a long-term lead generation standpoint, SEO is the best investment you can make in your digital marketing outside of ensuring that your site is built in a way to convert leads or sales effectively,” added Wiles.
“To use a simple analogy, paid advertising is like going to the grocery store. You pay a premium to get what you need, but it is convenient and fast. However, when you turn it off, you lose almost all of the value. On the other hand, SEO is like planting a garden. It takes time and effort, but long term, it provides leads at a significantly lower cost and builds equity in your domain that you don’t immediately lose if you stop investing.”
6. Lean on Consistent Branding
In times of uncertainty, customers rely on their trusted brands. If you don’t communicate the value of your brand offerings, other companies will. It’s why it’s essential to effectively convey a consistent message of strength and stability to your customers.
Don’t ignore the fact that people are wary about the looming recession. Tailor your brand voice to your target audience and appeal more to consumers’ emotions to show awareness and sensitivity.
More importantly, you need to be consistent with your branding. Brainstorm digital marketing ideas with your team and develop a monthly digital marketing plan to stay relevant without maxing out your budget.
Clarke also pointed out that online reputation management (ORM) is another critical aspect of business planning for a recession that should not be overlooked. Leverage customer reviews to project a trustworthy brand image. Make free profiles and claim them on various review sites to control the narrative. And lastly, ensure you respond to both positive and negative online reviews to maintain a stellar brand image during a recession.
7. Continue Your Social Media Efforts
During an economic crisis, many people tend to stay home to spend less money and save more. This also means potential customers are spending more time on their mobile devices. This is a perfect opportunity to attract new customers to your business and nurture leads through your sales funnel via social media marketing.
“Continuing social media marketing during an economic crisis ensures your audience knows you’re still present online,” said Rachel Czeszewski, paid social media senior manager at Thrive. “Whether you decrease the number of posts sent per week or your advertising budget, a little can still go a long way in keeping the lights on and attracting new/existing customers.”
As early as now, ensure your brand is front of mind when customers look for your products or services. Set up your social media profiles and solidify your brand if you haven’t yet. Other valuable digital marketing tips include keeping a close eye on evolving consumer trends, solidifying sales and marketing alignment and running strategic paid social media advertising campaigns to boost your goal completions.
8. Offer Innovative Video Content
Certain online marketing tactics pay off exponentially because of their cost-effective, creative approach to audience engagement. One notable example is video marketing.
Video marketing remains one of the most engaging ways to connect with your target audience and present consumable information. It builds trust and engenders commitment in a way that content alone cannot accomplish.
“Consider video content that is evergreen and can be used at any time throughout the upcoming years,” said Czeszewski. “This will ensure your dollar goes further versus spending more on campaign-specific content.”
Post videos on your social media pages. Ask customers to create video testimonials that you can place on your website. Live-stream on Facebook, Instagram or YouTube to allow followers to interact with your brand and ask questions in real-time.
During a turbulent period, Americans are likely to spend more time online to keep up with friends and current events. Video marketing is an excellent opportunity to engage with your target audience where they spend the most time and expand your client base.
Take the Dollar Shave Club’s launch video, for example. The video went viral in 2012 in the middle of a recession and has garnered more than 27 million views since its launch. Another surprising outcome, approximately 12,000 people signed for the subscription service within only 48 hours of its debut. Dollar Shave Club eventually earned hundreds of millions of dollars in revenue. And yet the video production only cost about $4,500.
When done right, video marketing could be one of the most profitable digital marketing ideas to keep your revenue flowing during a downturn.
9. Build a Robust Digital Analytics Setup
“Having a tight digital analytics setup will help business owners examine and forecast changes to their businesses,” said Garrett. This will allow you to make data-based decisions when adjusting your digital marketing strategies.
Key performance indicators (KPIs) and marketing analytics help you determine which online marketing tactics yield the best results and which ones are underperforming. A robust digital analytics setup also tells you whether your site interactions effectively generate business for your brand.
For example, Google Analytics provides a good way of comparing different pages on your website to see how they support your conversion goals. It tracks your page views, average time on page and bounce rate, among other metrics, so you can optimize underperforming web pages.
10. Make Careful Budgeting Choices
Danielle Russell, Thrive’s eCommerce manager, noted that while shoppers may cut back on spending during an economic crisis, consumers will continue to make the most necessary purchases. To ensure your products stay among those select purchases, it’s critical to stay in front of shoppers. And to do so, you need to make careful choices about how to spend your marketing dollars.
“Plan your advertising budget wisely,” said Czeszewski. “Consider seasonality and busy times of the year to take advantage of when your customer is likely shopping or inquiring about your services.”
Paid search advertising is one of the most efficient means of marketing you can leverage to maximize your marketing budget. Whether through retail channels like Amazon and Walmart or search engines such as Google and Bing, paid search positions your brand in front of shoppers who are actively looking for your brand offerings.
“Because ads are only paid for when they’re clicked, this prevents wasteful spending and allows brands to focus their ad dollars on the terms that are most relevant and highest converting for their products,” said Russell.
Paid shopping ads speak to those shoppers who are ready to add to cart. To make the most of your advertising campaign, you need to ensure your products are competitively priced. And if profit margins allow, include discounts, coupons and other sales incentives to drive conversions.
Don’t waste your time second-guessing whether marketing in a recession is the best way forward. Build your online marketing tactics today to mitigate a downward economic turn.
Do Recessions Yield Any Benefits?
Economic downturns don’t necessarily have to be a bad thing. In fact, many recession proof businesses have experienced significant growth off the back of an economic crisis by implementing strategic digital marketing strategies.
Let’s take a look at some of the companies that were able to pivot during previous recessions:
Tech giant Google’s core business in 2008 was its search-based advertising, which put it in an enviable position of being relatively impervious to the impacts of the recession. Many companies that relied on traditional marketing methods crumbled during the economic upheaval. But Google managed to weather the storm and become a household name.
Warby Parker is an example of a brand founded during the Great Recession and succeeded by leveraging digital marketing. The company filled an enormous gap in the marketplace by making affordable pairs of fashionable glasses available online. It addressed customers’ pain points and showed up where prospects spent most of their time.
Amazon thrived during the 2008-2009 recession by innovating its products and launching the now-famous Kindle. The company saw the consumers’ need for a more convenient reading experience, and on Christmas Day 2009, it generated more Amazon sales from eBooks than printed books.
Undoubtedly, investing in digital marketing services during a recession will be a challenge, mainly because you have to go against your standard operating norms and allocate your resources wisely. But it doesn’t mean you should halt your digital marketing campaign.
“Don’t hold back on your marketing; instead, increase it,” said Whittaker. “That way you’ll stay ahead of the competition as the recession gets worse and by that time, it will be much harder to get ahead.”
Optimize Your Marketing Budget and Be Smart About Your Priorities
“Digital marketing is not an on/off switch,” said Garrett. “It is something that flows. High tides, low tides, rapids, draughts – there will always be a flow. It is a matter of whether you allow nature and external forces to dictate that flow or take steps to adjust the flow yourself.
Even if the economy is not doing well at present, you have a responsibility to your team, company, customers, and community to figure out how to source, sell and optimize your business.”
That is why it is vital that you start optimizing your digital presence and invest in innovative digital marketing strategies that yield positive long-term results for your business.
Thrive Internet Marketing Agency has weathered economic storms itself using these exact methods. For more than 17 years, we have successfully grown through two major economic crises. We understand how to approach digital marketing in a way that will help shield your business from short-term fallout while building a long-term lead machine that is built to last.
Contact our digital marketing agency and let us help you boost your business performance to protect it from economic downturns.