By Josh Wood, CEO, Ruckus Marketing
Disney. Lyft. Buzzfeed. Whole Foods. From big brands to small businesses, from layoffs to closures, the recession is affecting everyone.
People are looking for safety. They’re more likely to cut spending. Companies are the same.
The smart move for brands and marketers is to stay calm and make sound decisions now. Then they can emerge stronger on the other side of an economic downturn.
Resist the knee-jerk reaction
A recent survey found that 30% of brands plan to cut their 2023 media budgets because of economic uncertainty. While digital-only campaigns come with cost savings, even a viral moment needs a long-term strategy in place to sustain momentum. To connect with consumers on a personal level, brands need to use traditional media, digital media and social media in a 360-degree approach. Recently, major digital channels have lost substantial numbers of users and have been showing diminishing returns, in part due to privacy changes.
History shows that avoiding knee-jerk responses to unfavorable economic conditions can deliver positive outcomes. Consider:
- Amid the 1973-75 recession that was fueled by an oil crisis, Toyota maintained its advertising budget and continued brand-building, boosted by a government report that ranked the Toyota Corolla behind only the Honda Civic in fuel efficiency. In 1976, Toyota beat Volkswagen as the number one import in the USA.
- During the 1990-91 recession, Pizza Hut increased sales by 61% and Taco Bell by 40% by sticking with their advertising budgets after McDonald’s cut its budget completely. McDonald’s sales dropped 28%.
Assess your internal situation
In a downturn, one move marketing agencies can take is to identify what’s working and what isn’t.
During the pandemic, a lot of businesses hired many people very quickly. This led, in some cases,to a lack of proper training for hires, who often had to figure out things themselves. In slow periods, agencies can ensure team members receive up-to-date training on tools and processes. This can help them deliver high-quality work.
Consistency in messaging is critical. When employees understand the agency and clients’ goals and have a way to measure success, they are more likely to stay on course.
Of course, managers can look for areas to cut costs without sacrificing quality. Can teams be combined or take on new types of work? Are there possibilities for them to conduct research and innovate for the agency and clients?
Not every campaign needs a committee
Recognize the winners on your team because sometimes, the creative process is better without the committee. Businesses, including agencies, can be more agile with fewer cooks in the kitchen. A creative lead with a strong brand vision can provide a clear direction for the work. This can save time and money.
Agencies still need talented team members who can successfully execute the idea.
Step out of your comfort zone
Creatives need to be creative about doing business. It would be a good time to re-examine the business model and operations. A few potential game-changers:
- Develop service bundles. It could include an a la carte menu for one-offs or a range of services from basic to premium.
- Revive traditional negotiations. If a potential client is on the fence, consider what is negotiable. Would they commit to a 360-degree marketing approach up front?
- Be flexible. If a brand brings a creative idea and asks an agency to execute, why not do it? It’s not ideally what an agency wants to do when the team’s passion is in the creativity. But in a downturn, agencies can still build client relationships by offering deep knowledge, skills and talents.
Agencies have to be open about offering more creative pricing.
The Bottom Line
Nobody is in the business of losing clients right now. Brands and agencies can move ahead with more confidence if they are willing to adjust with the ever-changing market.