2 February, 2024
While it might initially sound counterintuitive, the idea that companies should keep advertising during a recession is well established. Over a century’s worth of studies show that brands which maintain or grow their advertising budget during a downturn increase sales and market share, both during the downturn and following it. And it makes sense. The noise level is down as competitors drop back, which makes it easier for brands to increase their share of voice and grab attention. There is an increased opportunity to drive emotional connections with your customers and humanise the brand. And of course, the fact that the cost of advertising drops doesn’t hurt either.
Now, while according to most, if not all, economists we’re not currently in an economic recession, we think we are in what you could call a purpose recession. Gone are the heady days when it was hard to move for purpose-related marketing and advertising, as companies and brands jostled to show consumers their meaningful contribution to society and spent above-the-line budget brandishing their green credentials.
Instead, we have a world which is becoming characterised by reticence and the desire to keep a low profile. Businesses have been spooked by high-profile backfires: the poster child being Bud Light and the boycotts it faced following a partnership with transgender influencer Dylan Mulvaney which contributed to the brand losing its long-held spot as America’s top-selling beer. Mix in the growing crusade against ‘wokeness’ and the politicisation of ESG, and you get a situation where firms fear they will get as much outrage as praise for activity which posits them firmly on one side of the cultural dividing line.
In the face of this purpose recession, we think the lessons of advertising through economic ones should be kept front of mind. Companies with a purpose, which believe in the power of business to make a difference, which have invested deeply in their approach to sustainability and understand the existential threat the climate crisis poses to their future, should not stand by and keep quiet. Not only should they keep taking action, they should also find ways to show people what they’re doing. Consumer opinion is fundamentally unchanged – people might not need companies to have an opinion about every issue or get caught up in political debates, but they still prefer to buy from, work for and partner with companies that care about the impact they have on the world and strive to do business in a better way. So communicating now – in ways that reflect and respect the tenor of the times – will reap long rewards. Now is the time to show consumers the strength of your commitments, and the way you are following through on them.
This doesn’t mean doing what you might have done before. The times have changed, and the rules of engagement have too. Now is not the time for a brand to talk in broad brush strokes about its vision for the world or make a splash about a target set for a decade in the future.
Nor is it the time for marketing communication to focus only on themselves and their operations. While many companies have, rightly, spent a lot of time in recent years focusing on embedding sustainability into their core business and operations, this isn’t always easy for consumers to see. It’s also often difficult to communicate to them, particularly as the necessary changes that have taken place often lack immediate and tangible outcomes in the product or service consumers come into contact with.
Instead, marketing in the purpose recession needs to focus on real, tangible action that happens now, with messaging that has a point beyond telling people about what you’re doing in the hope of a pat on the back. This means running programmes and activations which are linked to your purpose that address the real and immediate challenges people are facing (there are many of them.) And it means using the communication around the activity to involve communities in initiatives and help people get more benefit from them. The right issue to tackle depends on your purpose and what you do, but think everyday community needs – whether it be litter, flooding, homelessness or school food. And think mechanics which engage consumers without making them do the hard work or making any financial contribution dependent on them taking action.
The purpose recession gives you an opportunity to demonstrate what you can do for people in a way that will cut through. And it shows that when things get tough you stand firm. Your purpose is something that drives you forward and guides the way you show up in the world. As times change, so does the way in which you manifest this. But your fundamental beliefs remain unchanged. And when it comes to the idea that business is part of society, rather than something that can sit outside it, you very much opt in.
By Larissa Persons