From inflation, to ongoing geopolitical conflict, to the looming threat of recession, today’s economy is challenging brands in extraordinary ways. The sustained pullback in consumer spending is necessitating out-of-the-box thinking for brand marketing leaders and forcing them to once again re-think how best to utilize marketing budgets to connect with their consumers.

LoopMe recently ran a survey with nearly 18,000 consumer respondents in the U.S., U.K. and Australia on the topic of cost of living and adjusting to the new economic climate. The findings revealed that 47% of consumers are consciously spending less due to cost-of-living price increases.

First things first: despite consumers worldwide watching their wallets, brands must continue efforts to stay top of mind. An old adage rings true: “when times are good, advertise; when times are bad, advertise.” Nearly a century ago during The Great Depression, most cereal brands cut their advertising budgets while Kellogg’s doubled it. The company’s profits rose almost 30% and it became the category leader, overtaking Post.

This trend has proven itself numerous times during other economic downturns – a McGraw Hill study conducted in the 1980s looked at 600 companies – some that continued to advertise during the two-year recession and some that cut back on advertising. The findings showed that brands that continued to advertise saw 256% higher sales after the economic slump while brands that cut back had virtually 0% market share increase and only 18% rise in sales. It’s no wonder that in 2020, mid-pandemic, CMO Survey found that only one in 10 respondents (11.1%) felt that marketing had decreased in importance while nearly two-thirds (62.3%) felt that marketing had actually increased in importance.

That said, tighter budgets do have implications for consumers on how they prioritize what they buy in the near term. Brands should be prepared to demonstrate more marketing agility as they ride out a tumultuous market while simultaneously continuing to invest in branding to deliver a balanced approach.  Here are a few ideas to consider to bolster brand campaigns and measure their effectiveness when purse strings are tight:

Connect with audiences in meaningful ways

During economic shifts, marketers must invest in brand building efforts to make authentic connections with consumers. When marketing is not centered around buying a product or service, it should be about fostering a real connection — whether that’s through a sustainability message, overall brand loyalty or cause-related messaging. Brands can also engage their audiences with bolder and more creative strategies that take into account today’s economic climate.

Focus on sincere messaging in creative

Presently, GenZenials control $5 trillion in spending, and their modus operandi is to select and stay loyal to brands based on their purpose. This may range from a brand’s commitment to sustainability, to its philanthropic initiatives, and everything in between. The key is figuring out an authentic and genuine middle ground that respects consumers and helps your company focus on its core business. By using tools like surveys and audience segmentation – addressing qualified, recent audiences with custom questions – brands can determine what matters most to their key demographics and communicate the most appropriate, genuine brand messaging.

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Play the long game with your consumers 

While keeping marketing efforts agile is critical, it is also important not to cross the line where your efforts become reactionary to performance. Branding effectiveness will have a performance lens at times, but it is key to understand the big picture in what drives brand outcomes, which may change with economic and consumption patterns. For example, an automotive brand should build brand loyalty with consumers who are considering purchasing a vehicle within the next year, rather than just doing so with those who are currently in-market.

Keep up with the latest technological advancements 

Artificial intelligence (AI) continues to evolve and provide brands with new ways to personalize advertising content, test assumptions, and gauge the impact of marketing offers. A brand’s AI program is key to keeping up with changing consumer behavior. For example, the research study referenced above also found that more than two thirds (67%) of professionals in office-based roles prefer working from home full-time, with nearly 1 in 5 opting for a salary cut to do so. This exhibits significant motivation for consumers to keep commute time to a minimum – perhaps even to eliminate it – which could change the types of advertising content they may connect with and may also alter the balance of their online browsing time. These types of nuances in consumer behavior can be picked up by AI algorithms and factored into how a brand can best connect with target audiences in different ways as AI enables brands to optimize media delivery in real-time and create measurable, incremental uplift against sales and other marketing goals. Effective media mix modeling is necessary to maintain trust and move the proper levels of engagement and attention.

Execute an effective measurement strategy

When evaluating your approach to measuring your marketing program’s impact, consider strategies that extend your measurement footprint and enable flexibility. When looking through this lens, brands may consider moving beyond traditional panel-based measurement methodologies. In doing so, it’s critical to evaluate your criteria in outcomes versus audience measurement. For example, brand lift survey data can be gathered at scale across non-panel-based native and open web surveys. This can simultaneously enhance quality and reduce the cost and necessary threshold for your measurement tactics. Reach and frequency, however, may still work best as a heavily modeled or hybrid approach to address demographic assignment and duplication.

Branding is critical during economic headwinds, and brand leaders need to remain relevant in the hearts and minds of consumers. As the economy continues its twists and turns, brands should implement strategic marketing efforts around maintaining awareness and consideration with the right audiences, while sustaining their brand sentiment more long term. Continuing these upper funnel efforts now will help to drive shoppers down the funnel when the time comes. Experimentation with leveraging AI for understanding your target audiences and executing campaigns more effectively, along with taking advantage of the latest developments in measurement methodology to achieve better precision, can significantly expand your options in how to approach customers with lower spend budgets in today’s changing economic conditions. And remember that results may affirm or challenge previously-held assumptions – and ultimately impact performance expectations and budget allocations.

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