Recession Proofing Your Sales Funnel: The Benefits of Awareness Advertising in 2023

Dive into the ways that awareness advertising can recession-proof your sales funnel and get insights on how to use it effectively. 

A recession may seem like the time to cut back on advertising, but it’s actually the perfect opportunity to increase your visibility and come out even stronger.

In fact, study after study has shown that cutting back on advertising during a recession actually hurts your brand, sales funnel and bottom line in the long run.

If you want to stay top-of-mind during a recession, you can’t afford to go dark. Brands that cut back on their ad spend during a recession put themselves at risk of losing customers and market share, as the data clearly shows.

• McGraw-Hill Research looked at 600 companies from 1980 to 1985 and showed that those that maintained or increased their advertising spend during the 1981 recession had sales that were 256% higher than those that didn’t by 1985. 
• In 2008, Millward Brown shared evidence that 60% of the brands that went ‘dark’ during an economic downturn saw a significant decrease in brand use and brand image. 
• More recently, Kantar Group estimates that brands who went dark to save costs in the early part of 2020 will see a 39% reduction in brand awareness and delay recovery.

If you want to ride out a recession and emerge on top, you can’t afford to skip awareness advertising — a type of advertising designed to make a brand or product more familiar to consumers at the top of the sales and marketing funnel. 

Don’t let a recession make your brand fade into the background. Keep reading to learn the benefits of awareness advertising during a recession, along with tips and best practices for adapting your marketing strategy to tough economic times.

Highlights:

• Historical data shows that advertising during a recession can give businesses a competitive edge and lead to success when the economy rebounds. 
• During a recession, sales cycles become longer, and awareness advertising can help businesses connect with potential customers earlier in the buying process, create a larger pool of prospects, and increase brand recognition and reputation to build trust and loyalty. 
• By understanding your target audience, telling stories that connect, and being authentic and transparent, you can create campaigns that resonate with your audience, build trust, and help your business succeed in difficult economic times. 

Why Awareness Advertising is Key to the Recession-Proof Sales Funnel

During tough economic times, sales cycles tend to become longer as customers become more careful in deciding what and when to buy.  

Your customers spend more time in the consideration phase, conducting more research, comparing products more closely, and taking longer to decide on a purchase during an economic downturn. 

In other words, the sprint becomes a marathon — and your business has to keep prospects engaged and interested throughout the process. 

But in some ways, a longer sales cycle is a blessing in disguise. It gives you more opportunities to connect with customers and demonstrate the value of your product or service. 

One of the best ways to keep a longer funnel flowing during a recession (without increasing ad spend) is to reallocate more budget to awareness advertising aimed at the top of the funnel (TOFU). 

Awareness advertising is designed to create a lasting impression that keeps your brand, products or services front and center. These ads are typically aimed at a broader audience to attract potential customers who may not yet be familiar with your brand.  

By casting a wider net and reaching more people earlier in the sales cycle, you can create a larger pool of prospects to warm up and convert into customers over time. Awareness ads help you connect with potential customers earlier in the buying process so that, once those prospects are ready to make a purchase decision, they are more likely to turn to your brand over others since you have already established a relationship with them. 

In addition, awareness advertising can help businesses to build brand recognition and reputation, increasing consumer trust and loyalty.  

By allocating more of your advertising towards TOFU awareness-based campaigns, you lay the groundwork for a more effective sales funnel that helps warm prospects and close more sales — even in the midst of a recession or other economic challenges.

Awareness Advertising vs. Other Types of Advertising

The primary objective of awareness advertising is to enhance brand recognition and promote customer engagement, in contrast to direct response advertising, product advertising, and promotional advertising, which serve different goals. 

• Direct response advertising: Direct response advertising is designed to elicit a specific response from the consumer, such as making a purchase, filling out a form, or calling a phone number. Unlike awareness advertising, which is focused on building brand recognition, direct response advertising is intended to drive immediate sales or leads. 
• Product advertising: Product advertising is focused on promoting a specific product or service. While awareness advertising can be used to support a particular product or service, its primary goal is to build brand recognition and customer engagement. Product advertising, on the other hand, is designed to showcase the benefits and features of a particular product or service to potential customers. 
• Promotional advertising: Promotional advertising is focused on promoting a specific deal or offer, such as a discount or free trial. While awareness advertising can be used to support promotional advertising, its primary goal is to build long-term brand recognition and customer engagement. 

In general, awareness advertising is most effective when used in conjunction with other types of advertising. By building strong brand recognition and customer engagement, businesses can position themselves for long-term success and increase their chances of success with other types of advertising. 

Does It Work? Case Studies on Advertising During a Recession Say Yes

The numbers don’t lie – history shows that advertising during a recession can be a game-changer for businesses looking to gain a competitive edge.  

In fact, some of the most successful companies in history have continued to advertise during tough economic times and emerged even stronger once the recession ended. 

Take the recent public health crisis. When COVID-19 forced people to stop traveling, VRBO and Airbnb responded in very different ways. While Airbnb scaled back its advertising, VRBO saw an opening and increased its spending to $90.8 million in advertising from January to February 2021. The strategy paid off, with VRBO seeing a 61% recovery in bookings while Airbnb’s bookings dipped by 15%. 

 In a sea of struggling travel businesses, VRBO found a way to come out on top – by investing in advertising when others held back.  

Another well-known example comes from the recession of 1990, in the responses of three fast food giants: McDonald’s, Pizza Hut, and Taco Bell. When times were tough, McDonald’s cut its advertising budget, while the smaller competitors Pizza Hut and Taco Bell strengthened theirs. As a result:

• Pizza Hut increased sales by 61%. 
• Taco Bell increased sales by 40%. 
• McDonald’s sales decreased by 28%.

Want to grab a bigger slice of the market during a recession? Follow Pizza Hut and Taco Bell’s lead and ramp up your advertising efforts, while the competition holds back. 

Then there’s Amazon. Even during the Great Recession, Amazon continued to innovate with new products despite the slumping economy, most notably with the new Kindle products – supported by millions spent on advertising. When the rest of the economy hit its nadir, Amazon’s sales rose by 28%. 

When the going gets tough, the tough get innovative. Amazon proved this during the Great Recession by continuing to invest in new products and advertising, and reaping the rewards with a surge in sales. 

These are just a few of the countless examples demonstrating that companies that invest in advertising during a recession can come out ahead when the economy rebounds.  

By keeping their brand top-of-mind for consumers and continuing to offer value and promotions, these companies were able to maintain or increase their market share and build customer loyalty.  

Awareness advertising during a recession can pay off in spades, as the historical data demonstrates.

Benefits of Awareness Advertising During a Recession

When times get tough, businesses need to get creative to maintain or grow their market share. That’s where awareness advertising comes in.  

Here are a few reasons why awareness advertising can be a powerful tool for businesses during a recession:

1. It strengthens brand recognition: Awareness advertising can help businesses build strong brand recognition, keeping them top-of-mind throughout a longer sales cycle so that customers remember the brand when they’re finally ready to buy. 
2. It increases customer engagement: By communicating with customers through advertising, businesses can create a stronger connection with customers, showing them that they are still here, still providing value, and still committed to serving their needs. 
3. It leverages lower competition: When other businesses are tightening their belts and cutting back on their advertising spend, there is a unique opportunity for companies to take advantage of awareness advertising and gain an edge over their competitors.

By building brand recognition, increasing customer engagement, and positioning for long-term success, businesses can emerge from a recession as stronger players in their respective industries.

1. Strengthen Brand Recognition

One of the most important benefits of awareness advertising during a recession is its ability to build and strengthen brand recognition.  

During tough economic times, many consumers cut back on their spending, making it more challenging for businesses to compete. 

However, by keeping their brand top-of-mind through awareness advertising, businesses can increase their chances of being chosen over their competitors when consumers do decide to make a purchase. 

In addition to helping businesses stand out in a crowded marketplace, building brand recognition through awareness advertising can also lead to increased customer loyalty.  

When consumers have a positive association with a brand, they are more likely to choose that brand over others, even when there are cheaper or more convenient options available. In a crowded market, positive brand associations are worth their weight in gold. 

As well as building brand recognition, awareness advertising can help businesses establish themselves as thought leaders. Awareness ads provide businesses with the chance to show customers that they are knowledgeable and experienced in their fields.  It’s not enough to be good at what you do – you also need to show it. By doing so, your business can build trust and authority which pays off in the long run. 

The ability to keep your brand at the top of people’s minds and establish yourself as an industry leader will provide your business with a position to emerge from a recession as a strong player.

2. Increase Customer Engagement

In a time of financial uncertainty, customers need more than just a sales pitch. 

Many consumers feel nervous about their finances during a recession, so they’re more cautious about their spending. In this environment, it’s important for businesses to find ways to engage with their customers and demonstrate the value they can provide. This is where awareness advertising comes in. 

By sharing stories and experiences that resonate with their target audience, businesses can create a sense of community and belonging that can keep customers coming back. For example, a restaurant might use awareness advertising to showcase its commitment to using locally sourced ingredients, or a clothing brand might use awareness advertising to highlight its commitment to sustainability. 

Through awareness advertising, your business can show customers that you are still here, still providing value, and still dedicated to serving them, even in the toughest of times. In a world of faceless corporations, that kind of connection and authenticity makes a world of difference.

3. Leverage Lower Competition

As businesses cut back on their advertising and marketing spend during a recession, competition for customer attention goes down as well. This can be a valuable opportunity for you to take advantage of awareness advertising and gain a stronger foothold in your industry.

• With fewer businesses vying for ad space and airtime, advertising costs may be lower during a recession. This can be especially beneficial for small businesses that may be operating on a tighter budget — more bang for their buck.
• With less competition for ad space and airtime, businesses may be able to increase their ad exposure and get their message in front of more people. This can be especially valuable for businesses that are looking to build brand recognition and increase customer engagement.
• With lower advertising costs and increased ad exposure, businesses may be able to achieve a better return on investment (ROI) with their awareness advertising efforts during a recession.

By taking advantage of lower advertising costs, increased ad exposure, and improved ROI, your business can position itself for long-term success and emerge from a recession stronger. 

Don’t wait for the storm to pass – make your move now. Use awareness advertising to seize the opportunities that a recession presents and come out on top, stronger and more successful than ever.

Strategies for Effective Awareness Advertising During a Recession

In a time of economic uncertainty, your advertising needs to work harder than ever. 

So, how do you create an awareness advertising campaign that will stand out and make an impact during a recession?

1. Know your audience better than anyone: To create an effective awareness advertising campaign, it’s essential to understand your target audience. Who are they? What are their needs and pain points? What motivates them to make a purchase? By understanding your target audience, you can create messaging and content that resonates with them and helps build a sense of familiarity and trust. 
2. Tell stories that connect on a deeper level: To create a strong connection with your target audience, it’s important to use storytelling and emotional appeals in your advertising campaigns. By sharing stories and experiences that resonate with your target audience, you can create a sense of community and belonging that can keep customers coming back. 
3. Be real and transparent: During a recession, it’s more important than ever to be authentic and transparent in your advertising campaigns. Be honest about the challenges that your business is facing, and communicate with your target audience in a way that shows that you care about their needs and are committed to serving them.

Use these tips to create campaigns that resonate with your audience, build trust, and help you weather the storm.

1. Know Your Audience Better than Anyone

When the economy is down, it’s imperative to understand how the spending behavior of your target audience may change. Harvard Business Review identifies four general segments that illustrate how consumers behaviour changes during a recession:

1. The slam-on-the-brakes segment is the most vulnerable and suffers the greatest financial losses. These consumers reduce all types of spending by eliminating, postponing, decreasing, or substituting purchases. While lower-income consumers are usually part of this segment, higher-income consumers may also join it, particularly if their health or income deteriorates.
2. Pained-but-patient consumers are resilient and optimistic about the long term, but less confident about the prospects for economic recovery in the short term. They economize in all areas, but less aggressively than slam-on-the-brakes consumers. This segment includes the majority of households unaffected by unemployment, representing a wide range of income levels. As the economic news worsens, more pained-but-patient consumers migrate to the slam-on-the-brakes segment.
3. Comfortably well-off consumers feel confident about their ability to weather the economic storm. They spend at levels close to pre-recession, but tend to be more selective (and less conspicuous) about their purchases. This segment primarily consists of people in the top 5% income bracket, as well as those who feel secure about the stability of their finances. This group includes retirees, as well as investors who had low-risk investments.
4. The live-for-today segment continues as usual and remains unconcerned about saving. These consumers respond to the recession mainly by delaying major purchases. They are typically urban and younger, more likely to rent than to own, and prefer spending on experiences rather than possessions (except for consumer electronics). They are unlikely to change their spending habits unless they become unemployed.

By understanding the impact of a recession on different consumer segments, businesses can create awareness advertising campaigns that resonate with their target audience and enhance brand recognition. 

It’s also crucial to understand where your product or service falls on a scale from ‘essentials’ to ‘expendables’. 

• Essentials are necessary for survival or seen as essential to well-being, and consumers are likely to continue buying these items even during tough economic times.
• Treats are indulgences that consumers may still splurge on occasionally, even if they cut back their spending in this category during a recession.
• Postponables are needed or desired items whose purchase can be delayed until the consumer’s financial situation improves.
• Expendables are perceived as unnecessary or unjustifiable, and consumers are likely to cut back their spending in this category during a recession, potentially eliminating these purchases altogether.

While basic levels of food, shelter, and clothing are essentials for all consumers, transportation and medical care are also often seen as essential. However, the assignment of specific goods and services to each category is unique to each consumer. 

During a recession, consumers typically reevaluate their spending priorities. Products and services, such as dining out, travel, arts and entertainment, new clothing, automobiles, appliances, and consumer electronics, can quickly shift from essentials to treats, postponables, or expendables.  

As consumer priorities change, they may eliminate purchases in some categories, such as household services, moving them from essentials to expendables. Consumers may also substitute purchases in one category for purchases in another, such as dining out (a treat) for cooking at home (an essential). 

In a recession, consumers become more price-sensitive and less brand-loyal. They may seek out their favorite products and brands at reduced prices or settle for less-preferred alternatives. For instance, they may choose cheaper private-label products or switch from organic to non-organic foods.

2. Tell Stories that Connect on a Deeper Level

During a recession, businesses can build trust and emotional connections with their target audience by using storytelling and emotional appeals in their advertising campaigns.  

Storytelling can create a sense of community, empathy and inspiration by weaving a narrative that resonates with the audience’s experiences. Emotional appeals can tap into the emotions that the target audience is feeling, whether it be fear, uncertainty or hope, to show that the business understands their struggles and is there to help them.  

However, it’s important to be authentic and avoid exploiting emotions for the sake of sales. Messages should be positive, uplifting and empowering, reinforcing an emotional connection with the brand. 

Worried consumers, including those in the comfortably well-off and live-for-today segments, often seek comfort in familiar and trusted brands during a recession. To build trust with their audience during tough times, businesses need to communicate reassuring messages that reinforce an emotional connection with the brand and show empathy.

3. Be Real and Transparent

During a recession, consumers are looking for brands that they can trust. When businesses are honest and genuine in their advertising, consumers are more likely to believe in the brand and feel that they have their best interests in mind.  

Transparency is another crucial factor in building trust with your audience during a recession. Businesses need to be open and honest about their practices, including pricing, product quality, and any potential issues that may arise. This can help to establish trust with consumers and show that the business is committed to being transparent and upfront. 

Being authentic and transparent can also help businesses to differentiate themselves from their competitors. By showcasing unique values and practices, businesses can stand out and appeal to consumers who are looking for something different. 

While authenticity and transparency can help businesses to stand out during a recession, it’s essential to ensure that these qualities are genuine, rather than just a marketing tactic. Consumers can easily detect when a brand is being insincere, which can harm the brand’s reputation.  

By prioritizing authenticity and transparency, businesses can build trust and foster long-term relationships with their customers. However, businesses should be careful to ensure that these qualities are ingrained in their values, rather than just a superficial marketing strategy.

Awareness Advertising: Your Key to Resilient Sales Funnel in a Recession

When the economy takes a hit, your sales funnel can take a hit, too. But with awareness advertising, you can keep the leads coming in and the sales rolling. 

Navigating a recession as a marketer or business owner can be challenging. While it may be tempting to cut back on expenses, including your marketing budget, during tough economic times, this decision could have long-term consequences.  

But we want to encourage you to stay the course and continue investing in your business, even in the face of a recession. The truth is that advertising during a recession can make a significant difference in your business’s ability to weather the storm 

Instead of reducing your marketing efforts, consider investing in targeted and strategic campaigns that can help your brand stand out and build loyalty with your audience. 

We understand that these are challenging times, and want to assure you that you’re not alone in this struggle. Our team of experienced marketers can help you develop a comprehensive and effective marketing strategy that will allow you to stand out from your competitors and connect with your target audience. 

Whether you need help with awareness advertising, lead generation, or closing more sales, we’re here to help you achieve your marketing goals.