OPINION: Where marketers should invest and cut during a recession

Edward Coram-James, CEO and Co-Founder of Go Up, explains the key areas where marketers should allocate their spending in a downturn.

The recession. It’s a term that strikes fear into the hearts of marketers and businesses alike. We are not technically in a recession yet (although it may feel like we are), however, most market analysts believe that one will go on to hit the economy once again this year.

So what does this mean for marketers? Well, it certainly doesn’t mean that we can sit back and relax. Prompted by a shift in customer behaviour, recessions present a cocktail of unique challenges for marketing professionals. Consumers become more conscious of their spending, and as a result, marketers need to get creative and find ways to reach audiences without breaking the bank. It’s therefore critical to closely examine your marketing budget to determine what can be reduced and what must be kept before taking any significant action.

However it’s not all doom and gloom. At Go Up, we’ve always believed that recessions provide an opportunity to build a stronger and more robust business, something that ensures it is more competitive when the grey clouds eventually lift. Here’s how to make certain that your business not only survives, but thrives within economic uncertainty.

Where to invest

Search engine optimisation (SEO)

Consider how often you use search engines to look up services and products you later go on to buy. This alone is enough to demonstrate how effective search engine optimisation (SEO) can be for businesses. Employing SEO practices ensures their websites appear high on search engine results pages (SERPs), helping them attract more customers than before.

There’s a reason I chose to specialise in SEO rather than other fields. I studied the sector before co-founding Go Up, now a leading SEO agency, with my long time friend, Tom Skinner. I had a hunch it would be highly powerful in the marketing world, and as expected, it now is one of most recognised and important tools around.

Why you should invest in SEO

Today, SEO is popular among marketers because of its relative low cost, ability to drive quality traffic, and capacity to improve user experience (UX), among many other benefits. It can, within reason, do it all — and should be at the top of your list of marketing expenditures.

For the most part, SEO is a time investment. You can reap all of the benefits of it without spending a dime, if you invest the time and effort to do things like research aspects such as keywords, produce engaging content, and optimise your website so that search engines can easily index it. All of this can help your business grow its consumer base and even potentially compete with the big dogs.

However, do bear in mind that SEO is more than about simply reaching a high click-through rate (CTR). You should also focus on providing great content that keeps current customers engaged during the crisis, letting them know that you are available regardless of the economic environment.

User experience

When it comes to the classic customer acquisition versus retention argument, we marketers love to mention one specific fact: gaining a new customer can cost up to five times more than retaining an existing one. Despite this, during the last recession, which occurred in 2020 in the height of the coronavirus pandemic, many businesses scrambled to acquire new customers, in turn neglecting existing ones and losing profit.

However, it can just take small, well-considered modifications on the user experience (UX) to help retain customers. “As consumers tighten their own spending on nonessentials, an exceptional UX can strengthen a customer’s perception of value. 86% of buyers are willing to pay more for a great customer experience,” Forbes explains.

The impact of UX

Customers are more likely to stay loyal if they have a positive experience with your product or service, and this is mostly done nowadays via a business’s website on their computers and mobile devices.

A user should therefore be able to quickly grasp the purpose of a given page and how it fits into the larger site structure. What can be clicked on and what cannot, as well as the location of commonly used features like links, addresses, and social media profiles, should also all be immediately apparent. A skilled designer will have no issue combining the needs of the company with those of its customers.

As you develop your UX, it’s also imperative to measure its quality in order to guarantee that customers always receive the best version of your product and services.

Where to cut costs during a recession

Pay-per-click (PPC)

In times of financial hardship, businesses often consider slashing their marketing expenses in the belief that this will help them survive. However, studies have shown time and time again that this can be counterproductive. Research going as far back as the 1920s proves that companies that maintain their marketing efforts typically weather the economic storm and continue to profit.

However, constraints on spending are sometimes unavoidable. If you have to make adjustments to your spending, you should limit the impact on your return on investment (ROI) by trimming expenses where it will have the least negative effect, as well as maximise the efficacy of the funds left over.

One question I am often asked is, “which is better for my business, SEO or PPC?” Of course, SEO is a major focus for us at Go Up, and I can say with confidence that organic search outperforms paid search in terms of lead volume and cost per acquisition.

Why you should cut PPC advertising

This is because sponsored adverts are often disregarded by consumers. PPC advertising on Google is labelled as such, as are promoted social media postings by social media sites themselves. As a result, customers can easily skip over them to get to the organic results.

What’s more, PPC advertising is most effective when integrated into a larger digital marketing plan rather than used alone. Its full potential won’t be unlocked until a full-funnel strategy has been implemented, and therefore, is not a recession-proof marketing tactic if you’re cutting costs elsewhere.

Paid social media

The price of digital adverts has skyrocketed in recent years, with almost every major digital advertising platform — including Meta, Google, Amazon, and TikTok — increasing their ad pricing.

According to Insider, the price of Meta’s cost-per-mile (CPM), also referred to as cost-per-thousand impressions, has risen by 61% between 2021 and 2022. Additionally, TikTok’s CPM increased by a huge 185% during this time. Even if you keep a close eye on your PPC advertising, your cost-per-click (CPC) can still increase.

Organic social media

Now is the moment to revert to marketing’s fundamentals and invest in less costly advertising tactics instead. You should create an effective content strategy centred around informative and helpful material that highlights your company and its products organically.

Organic posts can grow your following without you having to spend money on ads, and indicate that you care more about contributing to the community and making genuine connections with its members than making a quick buck.

Facebook and Instagram Lives are a particularly great way of engaging your audience and gaining new customers. They don’t cost anything, and you can produce them in any way you see fit. You may also want to make user generated content (UGC) — original, brand-specific material developed by customers and published on various social media platforms. This type of content is not only a useful way of generating brand awareness and customer loyalty, but is generally cost-effective too.

The bottom line

Growth during a recession may seem implausible, but with the correct marketing methods, it is still feasible. Invest in activities that provide long term value to your brand, like SEO, improving your website’s UX, and creating more branded content.

A recession can be a tough time for marketers, but by being strategic about where you cut costs and where you invest, you can maintain a healthy ROI for your campaigns.