During a recession, brand building and performance marketing cannot stop being essential practices for your e-commerce or direct-to-consumer business. As a digital agency that specializes in brand development, brand photography and videography, and more, our opinion may be a bit biased, yet we have seen many businesses thrive during recessions by staying true to their marketing strategies and continuing to invest in their brand.
A perfect example of the importance of investing in both brand building and performance marketing during a recession is the story of Burger King and McDonald's during the 2008 economic downturn. Before the recession hit, both Burger King and McDonald's were similarly popular fast-food chains. However, when the recession struck, Burger King decided to reduce their marketing expenses to cut costs while McDonald's continued to invest in their marketing efforts despite the challenging economic conditions.
As a result, McDonald's managed to maintain its brand recognition and popularity, while Burger King's market share and customer base began to decline. McDonald's capitalized on their continued investment in their brand building and performance marketing efforts, resulting in an increase in sales and customers.
This story is a powerful example of the importance of investing in marketing, even during times of economic uncertainty. Cutting marketing budgets may seem like a logical way to reduce costs, but it can have long-term consequences that negatively impact your business. When you stop investing in your brand building and performance marketing efforts, you risk losing your customers to your competitors who continue to invest in their marketing strategies.
So, what can businesses do to ensure that they continue to invest in their marketing efforts during a recession?
First and foremost, it's essential to have a solid marketing plan in place that includes both brand building and performance marketing efforts. Your marketing plan should be flexible enough to adjust to changing market conditions while staying true to your overall marketing strategy.
Secondly, it's important to allocate your marketing budget strategically. Based on our research and conversations with brands and fellow agencies/marketers, we recommend that 60-70% of your budget should go to brand building efforts, with the rest spent on performance marketing. This allocation ensures that you have a strong brand foundation to build upon while also maximizing your performance marketing efforts.
Lastly, it's crucial to focus on high-quality photography, videography, and user-generated content (UGC) to support your brand building and performance marketing efforts. These assets help you consistently create great content to pull from for your marketing needs. It's vital to remember that your visual content is your figurative handshake between you and your customers. It's how you make your first impression and either acts as a barrier to entry or an open and inviting welcome to what's possible.
In contrast with brand building, when you are deciding how to allocate your performance marketing budget, now is the time to put a little bit of money a lot of places and experiment. With the ever changing landscape of digital media, a low risk way to make a splash is to invest in various channels. During the pandemic, budget trends were favoring Facebook ads, but with the continued growth of TikTok, YouTube ads, and more, you'll likely find that these will be more profitable for your brand.
For many young entrepreneurs and marketers, this will be their first recession, so while challenges still lie ahead, staying faithful and working hard, having hope, and finding ways to inspire creativity will be essential. Remember, you don't need massive budgets to make an impact. You need a strong strategy, reliable partners, and a resilient mindset.