How to Advertise During a Recession in 2023
“Recession” is a scary word. One of the all-time worst. It makes us think about our favorite stores and restaurants cutting their hours – or even closing for good. Of people losing their jobs. After the Great Recession of 2008, the not-quite-over-yet Covid pandemic, and now jaw-dropping inflation, it’s easy to panic about news of the next big, bad thing coming ‘round the corner: another recession.
Nonprofits are always struggling to stay afloat, living in survival mode at the best of times. And during all this financial upheaval? It’s not pretty. As tough as it is to see through the fog, it’s important to keep investing in your organization’s growth with very strategic marketing. But it might look a little different from a few years ago.
With all that in mind, here’s our guide to the recession – what it is, and how to advertise during it.
First off, what is a recession, really?
A recession isn’t just a blip on the economic radar. The National Bureau of Economic Research defines it as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months” – two financial quarters is the rule of thumb. So since the GDP (Gross Domestic Product) declined in both Q1 and Q2 this year, we’re technically in a recession.
But experts agree, it’s a weird one. Because even though the economy has shrunk a little this year, employment is actually going up. That hasn’t happened during any other recession in the last 80 years. The fact is, there are still more job openings than there are people to fill them – 11 million openings, actually – so lots of companies are hesitant to start laying people off at the first sign of smoke.
While we’re talking about big scary words, let’s talk inflation. Inflation is when the dollar gets less valuable and the things you need to live get more expensive. A little inflation is usually a good thing; economists generally consider it a sign of healthy growth. But the inflation rate broke 9% in June this year, and that – more than anything – is shaking consumer confidence.
Why should you advertise during a recession?
So what does this mean for your organization? And why should you invest in advertising if there are signs of hard times ahead? There are lots of good reasons – we can think of about 20 – but here are the top three:
- People are still trying to find you. While the rest of us stay home and make sourdough starters, the world keeps spinning. During a recession, less profit and less spending form a feedback loop. If you’ve lost customers, the last thing you should do is stop advertising – you’ll be less likely to gain new ones to replace them.
- Your message will come through more clearly. You shouldn’t spend less on getting your message out there, but other people probably will. And that can work to your advantage. When the economy is booming, it’s harder to make your voice heard; but when other companies are pulling back, you have the chance to expand your reach and make a bigger impact with your advertising budget.
- Good marketing will help you learn and pivot. The economy isn’t static. You can’t just go into hibernation while you wait for good times to return. If you did that, you’d be a bear – and last time we checked, bears don’t make any money. If you start figuring out how to adapt now, your organization will be stronger by the end of it.
The Great Recession hit legacy retailers hard, but discount stores grew and thrived. The Covid shutdown closed countless businesses, but it fueled massive growth in e-commerce. Smart advertising doesn’t just get your message out there – the performance data that comes back will help you understand the marketplace. It’ll let you see the changes that are taking place as they happen. When the economy gets better – and it will! – you don’t want to be stuck playing catch up.
What should you focus on?
When you’ve got plenty of money, you’re open to buying all sorts of things. A new pair of shoes? Why not? A new phone? It’s been a while, sure. Heck, you deserve it! But when money’s tight, you focus on priorities real quick. Every decision is tougher, and anything you can put off, you will put off. That’s why it’s important to adopt some timeworn strategies when you’re advertising during tough times.
- Emphasize value. Inflation affects everyone. When filling up your car or buying a bag of flour costs a couple dollars more than it did a year ago, people start looking for bargains wherever they can. 66% of shoppers are willing to switch brands to get a better deal, so now’s the time to promote discounts with ad formats that let customers know that your prices are competitive. Yes, new customers may be traitors, but they’re your traitors.
- Create urgency. If people can put off spending money, they will. So don’t just tell people why they need what your business has to offer, explain why they need it now. But be honest. People know when you’re putting their feet to the fire. (They typically don’t like that sort of thing.)
- Engage your customers. Above all, don’t lose touch with your customers. Get to know them. Figure out what draws them to you. Even if they’re spending less, if you stay engaged with them you’ll know how best to reach them when the economy picks back up.
How should nonprofits market themselves during a recession?
Nonprofits have it tough under the best of circumstances. Getting people to donate their time or money is always a hard ask. Between inflation and the recession, nonprofits have a unique set of challenges:
- Donors feel less secure. Like everyone else, they spend less when they feel less comfortable about their own financial situation. As donors feel the pinch from inflation, their discretionary income starts to dry up, and their willingness to contribute vanishes alongside it.
- Recurring donations have less purchasing power. You either have to ask donors for more money, or watch the value of their contributions decrease each month as inflation devalues their contributions.
- Fundraising events become more expensive. Though it’s sometimes necessary, higher ticket prices can lead to a drop in attendance which, in turn, means fewer donations.
- Grant money doesn’t go as far. Incoming money from grants, which is likely to be fixed or adjusted on a quarterly or annual basis, might not buy as many necessary line items as before. It takes careful strategizing for an organization to make up the difference.
- Donor fatigue sets in. Current donors, or people who’ve donated in the past, may find themselves overwhelmed with requests to contribute to new charities, or to increase their current giving.
But don’t give up! As you figure out how to shift your strategies for 2022, here are some smart tactics to consider.
- Refine your messaging. Crafting compelling nonprofit appeals isn’t just about stating your mission: it’s about telling a story. Personalize your message by telling stories about the good work you do and how donors can team up to make that happen.
- Focus on retention. Make sure you reach out to current donors and let them know how urgent it is they continue to contribute whatever they can. At the same time, though, you don’t want to accelerate donor fatigue by overwhelming them with constant requests. A smart marketing strategy will strike the right balance.
- Offer alternative ways to contribute. Even if former donors can’t give as much right now, keep them engaged! If someone cares enough about your cause to donate money, they’ll probably sign a petition or post on social media – any of the lighter-touch activities that nonprofits need to thrive.
- Invest in and prioritize activities at different stages of the donor cycle. Are you working so hard at finding new donors that you’re neglecting the ones you already have? Or are you so worried about keeping donations steady that you’re failing to explore new opportunities for fundraising? One way or the other, a recession is likely to expose weaknesses in your planning, so make sure you’re giving equal time to parts of the process you may have neglected in the past.
- Be upfront about the effects of inflation. Usually businesses try to hide inflation-related price increases, sometimes by decreasing the size of a product or by cutting back on materials to keep prices steady. (Candy bars really do get smaller; you’re not imagining things.) But the rate of inflation this year has received so much media attention that some brands are choosing to be upfront with their customers about where price increases are coming from.
Some have even notified their customers in advance, turning the news into a sort of de facto promotion, resulting in a sudden bump in sales before the new price takes effect. Nonprofits should take note. Don’t just ask for more money; explain why you need to. As always, communication is key.
Choose the right partners
No matter what the economy has in store for 2022 and beyond, we’re going to get through it. A carefully planned digital advertising strategy will make sure you don’t just weather the storm – you dance in the rain. Contact Big Sea to learn more about our expertise in digital marketing, branding, and messaging.