Marketing during a recession: 5 common mistakes

Marketing during a recession: 5 common mistakes

It is difficult not to worry about the macroeconomy at this time.

Unless you are a brand marketer in a recession-proof industry, or an agency marketer who has clients in recession-proof sectors, you will be working against a lot of stress and performance pressure.

Some marketers may find these emotions help them achieve hyper-focus. They can also lead to many making hasty decisions that are detrimental to their business’s long-term and short-term health.

This article will help you identify common marketing mistakes and provide thoughtful solutions that will allow brands to thrive and survive over the long-term.

1. Make the mistake of cutting instead of reducing

Marketing is, as you’ve probably heard, a flywheel.

This means that, with major platform algorithms’ ability to self-learn, cutting spend will result in a hard reset that will have lasting ramifications that go well beyond the time it takes for campaigns to be turned back on.

Instead, here are some ideas

Keep the lights on for campaigns that are delivering results whenever possible. Reduce your spending

• You are in good company.
• Take a deep breath, and then dial back where you see less immediate results.

You may need to segment more precisely if you don’t see the opportunities in specific campaign segments.

• At the campaign level, you can choose to be at the top of your funnel, in the middle of your funnel, or at bottom of your funnel.
• At the ad set level, by objective.

This will allow you to determine where performance is low and which areas are eligible for reductions.

Second mistake: Do not refer to account history when cutting

Startups are particularly affected by this. They don’t have enough benchmarking data to be able to compare past accounts for better budget cuts.

For established brands, there are less excuses not to look into the history of account performance (especially when it goes back to frenetic times like the first six month of the COVID-19 pandemic). But I have seen it happen.

Instead, here are some ideas

If you’re a startup without a good archive of performance data but you have an agency managing your account, they can draw insights from similar accounts that they might have had in the past. Your agency should be involved in all major decisions.

If you have an established set of accounts, go back at most to your 2020 data to analyse:

• What can you do to reallocate your budget?
• What worked over the long-term and short term.
• These had long-lasting effects, good or bad.

This will provide you with a solid strategic base for product and service campaigns that are relevant to your business.

3. Mistake: Not referencing CRM data when cutting

This is something I have seen a lot of over the years, and not just during recessions. Marketers who only focus on surface metrics without understanding their actual business impact make poor budget choices.

Examples:

• B2B brands tend to spend more on cheap CPLs than they do understanding the source that is driving qualified leads that lead to opportunities.
• Ecommerce brands reduce budget for their highest-CPA audiences without realizing that this audience has an average LTV of 50% higher than other audiences.

While it may be possible to achieve immediate budget goals by reducing spend, kneecapping your most valuable segments, audiences or campaigns will not only reduce your revenue but also make it more difficult over time.

Instead, here are some ideas

It’s time to sync your marketing data with CRM data.

You should at least have a basic understanding of the channels that are driving your highest qualified leads. If you don’t have dev resources, you can track this information on an Excel sheet so you can identify other areas where you can reduce spend.

4. Make a mistake: Stop cutting new campaigns too soon

Today’s algorithm-heavy world of marketing:

• Optimizing campaigns requires time and data.
• To be statistically significant, tests must be run for a sufficient time.

Early indicators may not be the complete picture. They should not be the only information that you use to make decisions.

Instead, here are some ideas

Instead of panicking and cutting, you can rotate in new creative and messaging and adjust bidding types. You can go through all of the optimization options as you would normally, but resist the urge not to understand the true performance limit of your campaigns.

B2B is a slower industry, so set higher volume growth indicators to return more information quickly.

CTR can also be used as a proxy for conversion rates, provided you respond to low CTR/low conversion scenarios with optimizations at the weakest point of your funnel.

5. Mistake: Blind to Opportunity

Although it might seem like the worst case scenario for marketers, there is a good chance that at least one of your competition is in worse shape than you. This could mean they are likely to leave market share or lower costs for you to grab.

If you work for a brand that is recession-proof and have a large budget, this may be relevant to you. You might see lower CPMs or CPCs on your social channels after the holiday and election seasons.

Many of us are defensive and for good reasons. You might miss opportunities to grow if you focus all your energy on preservation.

Instead, here are some ideas

You should pay attention to weekly trends in cost so that you can identify any market weakness and jump on it.

Keep an eye out for any industry news that may indicate any downward trend in costs, especially if you aren’t yet testing platforms.

Another thing to be aware of is emerging market shifts and trends that you can address with your campaigns. If your ideal customer profile (ICP), is changing, you should be aware.

• These are the most important things to address in your marketing.
• Your executive team should be informed so that they can adjust any offers.

Do your best to look at your campaigns from the long-term perspective. This will keep you away from spending too much time on survival strategies.

Recessions are a great time for marketers

You might notice that all of these errors should be avoided at any time, not only during economic downturn.

There is a reason why great marketers emerge from recessions.

The foundations of great marketing are not affected by the recession.

These are important to keep in mind while you go through the news cycle and difficult internal meetings.

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