There is an upside to every downturn. History shows us that some of the most memorable marketing campaigns are born out of tough economic times. Insight and planning are the keys to finding opportunity in difficulty - even during a global pandemic.
Albert Einstein once said, “In the middle of every difficulty, lies opportunity.”
(Wise words from a genius who lived through two world wars!)
As Einstein suggests, we can choose to focus on the “opportunity” rather than the “difficulty”.
Why? Because while economic downturns do come and go, good people and good brands always endure.
Skeptical? Let’s take a look at a few examples:
BMW rebranded itself as a luxury sedan maker with the “Ultimate Driving Machine” slogan during the oil scare of 1974.
Apple launched the now-iconic iPod in the depths of the dot.com bust.
Knowing that it offered a compelling alternative to expensive cable services, Netflix powered ahead with an international expansion during the 2008 recession.
In spite of our COVID-19-induced economic downturn, the vast behavioural changes caused by the pandemic have already opened up new opportunities for brands - but only if they are willing to grab them by the horns.
Airbnb's successful pivot to ‘virtual experiences’ is a case in point. This innovation doesn't just capitalise on people’s temporary inability (or unwillingness) to travel; it's a sustainable long-term offering for a new segment of consumers who desire cultural experiences throughout the year.
Tough economic times will either kill you – or it will kill your competitors. But if you survive, you can thrive.
1. Identify Your Customer’s Needs
Henry R. Luce launched Fortune Magazine just four months after the 1929 stock market crash. Despite its expensive cover price, Fortune had half a million subscribers by 1937.
In the words of Professor Andrew Razeghi of Northwestern University "Fortune worked for the very same reason that all great new products work: it made a uniquely relevant contribution to its customers’ lives.”
“The stories found between the pages of Fortune magazine could not be found in the Wall Street Journal or the black-and-white lines of the many statistics-laden trade periodicals, or even in Luce’s other successful media property, Time Magazine (which he founded in 1923). While others recoiled, Luce built an empire with Fortune at its foundation."
The key takeaway here?
Fortune magazine worked not in spite of the Great Depression. It worked because of the Great Depression.
The stock market crash piqued interest in the culture of business. So, Luce did what all the great innovators do: he found an unmet need in the market and filled it.
As Razeghi says, economic uncertainty does not make market needs disappear. “Not only do they still exist, but new needs also emerge.” And, he says, these needs are easier to discern because the market has become more discerning.
“We are simply more thoughtful, more aware, and more focused during economic downturns.”
Learning from Fortune and Luce, Razeghi urges businesses to use this time to be aware of the market, not afraid of it:
“The great mistake many organisations make during turbulent times is that they quit listening to the market. They pull back on research and development precisely at the moment when the market is speaking most loudly.”
Now is the time to listen to your customers. Now is the time to get out into the market and identify those unarticulated needs.
2. Take Advantage of the Quiet Room
During economic downturns, many brands clam up and stop communicating. This is a major opportunity for your business.
Because in a quieter room, your voice will be heard better.
Research on so-called 'recession marketing' is vast and extends back to the 1920s. Again and again, research shows that companies who kept up their advertising spending during tough economic times came out the other side with a greater market share.
DDB London’s Sarah Carter explains how the UK’s Barclaycard used a bold new ad campaign to increase its position dramatically in the early 1990s recession.
While competitors halved their spend, Barclaycard upgraded its product with additional services, introduced an £8 membership fee and increased advertising spend by 250%, launching a famous campaign featuring Rowan Atkinson.
“It’s one of the best examples I know of how difficult times economically can sort the marketing men from the boys – offering opportunities to those who are smart and brave enough to recognise and exploit them,” Carter says.
“You should cash in on this invaluable opportunity your more cautious competitors may be creating for you. If they pull back, your media investment works much harder. In fact, you can still pull back and benefit – so long as you pull back less than your competitors!”
3. Have a Clear Strategy to Maintain Investment
Of course, spending money on advertising is not a fix-all, as Patrick Barwise, Emeritus Professor of Management and Marketing at the London Business School, points out:
“Every brand is in a different situation, and the quality of the advertising strategy and execution matters a lot. When the going gets tough, the tough get creative, as well as having a clear strategy and doing their best to maintain investment.”
All businesses are different. For fast-food companies, retail, consumer packaged goods, and automotive industries, advertising is like air – they need it to survive, so cutting back on ad spend is not a viable option. For other industries, advertising is more discretionary.
But for the vast majority of businesses, the need to advertise falls somewhere in between.
Due to the unique circumstances of the pandemic, we’ve seen industries be hit very unevenly by the resulting economic downturn. With people spending more time at home, eCommerce, streaming services, and home fitness offerings have seen unprecedented growth - while clothing apparel and hospitality have seen a massive drop in demand.
Sharon Krinsky, president of Hoffman/Lewis in San Francisco and St Louis, writes: “If you are in one of these businesses [in between] you can do yourself a lot of good, or a lot of harm. It all depends on whether you’re using creative and media strategies that are appropriate for the times.”
“The clearer the strategy and the better the evidence to support it (based on classic account planning principles and consumer insights), the more likely that the CMO will persuade the CEO and CFO to maintain advertising investment."
Acknowledging that your advertising budget will be under strain during tough economic times, it’s more important than ever to add solid, strategic thinking to your communications – especially when you want to remain on consumer’s radars for when recovery begins.
For some firms right now, the need to preserve cash in order to survive may override issues of long-term shareholder value. But this should be continuously evaluated to ensure that your brand doesn't fall into a slump that is hard to reverse.
The conclusion is clear: Being bold, not cautious, is what pays off during tough economic times. Businesses that choose to push forward with new offerings and strong advertising spend are much better-placed to capitalise on the economic recovery.
So, put yourself ahead of the pack. Start thinking about how YOU can create opportunity from difficulty.