Economic fluctuations are regular, and completely normal.
As consumers begin to explore new brands and offers that meet
their changing demands, now is a crucial time to plan effective communication strategies.
Studying various third-party research, Clear Channel’s Survive to Thrive Playbook takes a reflective look into previous economic downturn periods to understand brand performance, consumer sentiment, and how to effectively implement marketing strategies to ensure long-term success and recovery.
In understanding market behaviours, let the power of Out of Home assure, guide and motivate consumers towards finding the right solutions for new individual needs.
The strategic advertising playbook to survive economic downturns
Survive
to Thrive
What we’ve learnt
Although major financial crises can be unnerving, history has demonstrated there is great bounce back, recovery and growth after every period. The most recent 2019-2021 crisis reported the most powerful recovery yet. This is not a period of panic, but a period of opportunity.
Avoid the mistake of ‘going dark’
in sensitive times.
There is a cost of shutting off brand communications.
Research from the University of South Australia studied 57 brands that cut mass marketing from their plans. As a result from ‘going dark’, brands experienced dramatic and long-term sales decline.
1990-1991
Savings and
loan crisis
2019-2021
Covid 19
crisis
2007-2009
Global
financial crisis
2001-2002
Dotcom
bubble
Real GDP percentage growth, quarterly
Note: shows percentage change from same period of the previous year
Sources: US Federal Reserve, organisation for economic co-operation and development
Learning from past mistakes, and taking a look at recent global recessions
60%
of brands that went dark saw
2008 financial recession
Coronavirus
Brand use -24%
Brand image -28%
Brands that went dark reported Brand Awareness
-39%
Sales down 16%
after 1 year on average
Sales down 58% after 5 years on average
Maintaining or acquiring share of voice is a key strategy
Keeping the light on.
Both businesses and everyday consumers believe it is worth the fight to push through.
Recession is a time of change; and change brings opportunity as well as risk.
In fact, recession gives you a rare opportunity to put clear space between you and the competition, and leave you in a stronger share position for many years to come.”
– Carat, 2022
“
1in4
Brits believe the economy will bounce back even stronger after a downturn
Sources: Millward Brown (2008), Kantar (2020)
Why SOV is a key recession strategy?
It is vital for brands to stay front of mind. Strengthening market positioning increases the likelihood of a strong recovery.
In a recession, total ad volume in market is likely to decline significantly, which presents a key opportunity for businesses to maintain their share of voice with a lower budget than usual.
Historically, brands that took courage, stood their ground and maintained share of voice during economic instability reaped long-term benefits later on.
Cut spend
Increase spend
Maintain spend
Market share recovery is significantly improved where advertisers have invested through a recession* (+%pts)
+0.7
+1
+1.6
Understanding Recession Psychology
During economic downturns, of course, consumers are more cautious and set stricter budgets to their spending. Nevertheless, purchases are unavoidable, and money is still spent. The trick is to understand, react and predict consumers’ altered lifestyles.
Purchases depend on consumers having disposable income,
feeling confident about their future, trusting in business and embracing lifestyles.
There are four consumer segments to target during a recession. They have differing scales of affordability and varying needs that need catering for. To understand these consumers will lead to brands unlocking market opportunities in times of a recession.
Source: Ebiquity, cited Polman PIMS Database 2020
Consumers will adapt their purchase behaviours to endure economic fluctuations. Effectively, there will be a continuation of spend in certain categories, and reduced spend elsewhere. To cater for different needs and demands, delivering targeted messaging to these consumer segments is crucial.
Focusing on stable and mixed markets is key.
Consumer segments’ changing behaviour
…feels most vulnerable and hardest hit financially. This group reduces all types of spending.
…tend to be resilient and optimistic about the long term, but less confident in immediate recovery.
…feel secure about their ability to ride out current and future bumps in the economy.
They consume at near-prerecession levels, though now they tend to be a little more selective.
…carries on as usual and for the most part remains unconcerned about savings. Will continue to spend across all categories.
Slam-on-brakes
Live for today
Pained-but-patient
Comfortably
Well-off
Essentials
Treats
Postponables
Expendables
Low
High
Risk of economic downturn
High
Low
Behaviour Change
Hover
Stable market
Mixed market
Declining market
No significant changes to market opportunities.
Little change for consumer favourites, but there may reduction for other competitors
Consumers will eliminate or significantly reduce purchases
Source: Harvard Business Review: How to Market in a Downturn 2009
Consumer profiles: how are they feeling and how are they spending
It is important to energise, assure, alleviate or calm specific buying groups with relevant messaging.
Live for today
Comfortably well-off
Pained-but-patient
Slam-on-brakes
169x
excited right now
Loyal, non-switchers
Most likely group to stick to familiar brands
127x
optimistic right now
77%
thinks it’s better to buy good quality, and fewer items
Least anxious consumer group
71%
unsure about wider economy
needing assurance on recovery
89%
most price conscious group
177x
brand switchers
Consumers want brands to reach out and bring hope in tough times
8%
say that brands should stop advertising during tough times*
Only
87%
said they expected to hear from brands just as much or more during economic instability
58%
agreed that brands should help customers through tough times
60%
of consumers were demanding support from brands to get through the tough economic times
Source: Kantar 2020: Coronavirus*, Reach Survey 2022
Source: Clear Channel Audience Insight September 2022
Why OOH?
The strength of Out of Home to reach and connect with your consumer in uncertain times with saliency, support and sensitivity
2in5
Public broadcast mediums have the highest levels of trust vs any other media
OOH best known for being ‘credible’ and ‘informative’
shoppers say posters and billboards guided them to clear brand preference*
+31.2% CPM
Since 2019
Source: Clear Channel JCDecaux The Moment for Trust
*Clear Channel Malls and High Street Survey 2022
Why OOH vs other media?
OOH fares favourable as rampant media inflation hits TV and digital.
OOH is able to maintain mass, cost-efficient reach compared to any other channel.
TV
3.1%
lower cost
Now vs 2019
OOH
+33% CPM
2019-2022
Social
Source: WARC August 2022, Media Inflation. NB: TV and Social, Global metrics
Survive to Thrive with OOH
Remember, maintaining your share of voice not only benefits short-term survival, but maximises business recovery.
History has seen many successful campaigns during recessions, often by those who were willing to take a financial or creative risk to pull ahead.
See how our campaigns have thrived in the last two years through the pandemic, its recovery and now through the recession.
What to do? Top 5 tips for your toolbox
49%
more likely to say it is more trustworthy than online
Be creative
in your communication and offerings
As consumer navigate this fluctuating period, innovation is an effective short-term strategy to cater for new demands. An easy way for retailers and brands to give additional perceived value to customers is to work together to develop new, appealing propositions for different customer groups.
47%
more “rising stars” during these challenging periods vs during stable periods
During a downturn, there are
Source: Bain & Company 2022
Be loud
Increase your voice
The coming months will test everyone. But this is much the same in [previous recessions] and it was the brands that held their nerve – and share of voice - that bounced back strongly when recovery came.”
– Peter Field, Researcher
“
Source: Kantar 2020: Coronavirus
70%
want brands to offer a reassuring tone during tough times
Be reassuring
Source: WARC 2021
44%
of successful campaigns in a recession take an emotional approach
Be real
Humanise your brand and build an emotional connection with your audience
Sources: Journal of Marketing Science 2020, WARC 2022
90%
of consumers say transparency by a brand is important to their purchase decisions
Over
Brands should directly refer to the current situation and what they are doing to ensure that any increases are minimised. Honesty and transparency could lead to maintained sales.
Be transparent
Brands who are transparent in how their prices are calculated can increase purchase
intent by more than
clearchannel.co.uk
Survive to Thrive with OOH
As consumers turn towards brands for guidance and support during changing economic periods, now is the time to offer relevant and timely messaging.
With Out of Home, advertisers can deliver contextual and memorable campaigns to best maximise short-term recovery and long-term growth.
Get in touch
(£100K+ HHI)
(£60-100K HHI)
(£30-60K HHI)
(<£30K HHI)
-25%
-36%
-54%
Source: TGI January 2022 during Coronavirus
20%
Hover
4
3
2
1
5
*Commentary on the pandemic downturn
Get in touch
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What we’ve learnt
Maintaining or acquiring share of voice
Survive to Thrive with OOH
Understanding Recession Psychology
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Why OOH?
