How Advertisers Can Navigate A Recession With Brand Response

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The signs are hard to miss. From rising interest rates, to inflation, to stocks in bear territory, to consumer sentiment best described as “wary”, everyone seems to be whispering the dreaded “R” word: “Recession”.

Searches For Recession Increase

The fears are reflected in a July 2022 poll from YouGov and The Economist, which found that 58% of Americans believe we are already in a recession. Similarly, searches for the term “recession” increased dramatically over the first half of the year, according to Google Trends, peaking in mid-June. How long or how severe this recession will be is anyone’s guess. But the fact remains: Consumers are tightening their purse strings.

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And it’s not just consumers who are worried about their 401k plans as they drain savings to pay for basic needs such as gas and groceries. On Monday, July 25, Walmart saw its stock price decrease overnight by 9% after it lowered its profit projections for the year due to the slowing economy. This was followed by comments from Citi analyst Paul Lejuez: “Higher inflation (up double-digit percentage and greater than 1Q) is affecting spending on discretionary categories and is occurring beyond Walmart's lowest income tier of consumers.”

While recession worries are very real for all involved, if there’s anything that the team at Media Culture has learned over nearly 30 years of driving revenue for a diverse set of clients, it’s that when the economy tightens, advertisers would be wise to consider the other “R” word, Response.

Brand Response

Not to be confused with the yell-and-sell tactics of traditional Direct Response, Brand Response, also known as Brand Performance, is a blend of brand storytelling focused on engagement and positive sentiment with specific messaging and targeted calls to action meant to drive immediate response. When properly aligned, what results is a powerful vehicle for driving measurable sales and revenue today while building brand awareness that will continue to drive the business for years to come. 

However, Brand Response is more than just a creative execution. Understanding the buyer’s path to conversion and what tactics or channels are most effective in driving revenue are crucial to making the right decisions on where to invest marketing dollars.

At times of increased economic volatility, having a holistic measurement approach that accounts for both the long- and short-term impact of advertising spend is crucial. Unlike Brand advertisers that are accustomed to Brand Awareness as their primary KPI or Direct Response advertisers charged with measuring the immediate impact of their ad spend, a Brand Response measurement approach considers both immediate results as well as the long-term health of the brand, ensuring that one does not take precedence over another.

As consumers look to reduce their discretionary spending, so do advertisers look to cut back on advertising spend. How advertisers go about selecting which tactics and channels will see those reductions will determine how they fare during the inevitable economic upturn. Even sectors normally resistant to a recession (discount retailers, healthcare, CPG) would be wise to consider shifting to an ROAS strategy.

But it's not all negative. Choosing a media partner with the right measurement methodology could be the difference between navigating the economic storm or being overcome by it.

Article By Jennifer Moore, Chief Revenue officer, Media Culture

About the Author

Based in New York, Jennifer Moore has over 20 years of media planning and procurement experience across all sectors. Over the course of her career, Jen was instrumental in the successful launch of IPG’s corporate trading platform, ORION; Horizon Media’s Trading Division, Eden Road; and The Miroma Group’s US subsidiary, Outcomes. The ultimate people person, relationships are everything to her, whether they be with business partners or colleagues.  A guest lecturer in Communications programs at her Alma Matter Seton Hall as well as NYU, Jennifer is a Mother, Wife, Volunteer, Board Member, and an enthusiastic Soccer/LAX/Track/Dog Mom.