By Buana Sari November 18, 2022

In 2022, the International Monetary Fund (IMF) has forecasted a major slowdown in the world’s top economies pointing it out to be “gloomy and more uncertain”. Factors including the Ukraine war, rising inflation rates, Covid outbreaks, real estate crisis, tighter monetary policies, and more contain global economic growth, threatening digital marketers and brands looking forward to scale businesses and striving for more revenues.

Big technology brands have highlighted alarming signals in 2022 with Snapchat’s CEO, Evan Spiegel, warning investors of a possible slowdown in revenue growth resulting in a drop in Snapchat’s stock prices (Source : The Verge). Economists view such declines as the first signs of an upcoming digital sales crisis and bad news for the global economy in general. According to a survey conducted among global brands, nearly 75 percent of the respondents agreed that signals of an economic downturn in 2023 influence their media budget decisions (Source : Statista).

For brands and their customers, a fall in economic activity during these recessionary conditions causes uncertainty and the need to change priorities to face the challenging times. Customers are tightening their belts and restricting themselves to more needful spending. Businesses are faced with crossroads, figuring out which costs to retain, cut, or eliminate. They are often wondering as to how the spiraling recession will impact digitization, asset monetization, advertising, conversions, sales and finally revenue generation. Unfortunately, for small and medium businesses digital marketing is often one of the first casualties of such economic uncertainties.

Experts say that digital marketing in a recession of 2022 requires a careful rethink of strategies and tools to neutralize the adverse effects of an economic downturn. Brands need to add breakthrough marketing technologies like moLotus with long term benefits to their digital marketing mix during the recession as recessions are cyclical, occurring on average every ten years.

Digital marketing, often being seen as a cost center, is actually a revenue driver. Brands, earlier believing in the narrative that digital marketing is a cost center, are now associating digital marketing investment with high margin revenues, justifying further investment during the recessionary periods. Most businesses now understand the underlying effect of digital marketing on powerful aspects like brand visibility, customer lifetime value, and ARPU.

Let’s see in detail how digital marketers can face the recession and double down on marketing during recession, even when pessimists head in the opposite direction :

1. Aim for Long-term Brand Building over Short-term Activations

Customers’ trust in brands tends to decrease during a recession, therefore brand exposure and awareness campaigns will be of vital importance for digital marketers. Building and maintaining resilient brands is the best way to minimize business risk during the economic downturn. Holding the trust of existing customers prevents them from moving to other brands and opens up new opportunities.

Brand building affects everything brands must do during these tough times. According to IPA’s Long and the Short of It (paywall) the most effective advertisers spend about sixty percent of their budget on brand-building ad campaigns and forty percent on short-term activations. This ratio becomes more important during recessions.

Experts in 2022 say that digital marketers must go beyond mere advertising on social media platforms like Facebook to affect brand visibility during the current recessionary times as hateful social media is fast losing its credibility among buyers. A study on social media as a source of information finds 59% of US adults believe the information shared on social platforms is inaccurate (Source : Pew Research Center) They should allocate a major portion of their digital ad budget on new age marketing technologies like moLotus which offers innovative campaigns enhancing brand visibility.

Precision in branding is essential during recession as brands struggle to win consumer trust during the recent changes in the consumer’s decision journey. Data-driven moLotus brand awareness campaigns increase brand visibility, boost trust and demand generation. By tracking and quantifying moLotus brand awareness campaigns, digital marketers can find out what works towards brand visibility and also what action needs to be taken to enhance it.

2. Diversify Customer Segments

Inflationary market trends are impacting customers directly via increased prices, the impact is affecting different income groups differently. This is the reason why segmentation is key to success for digital marketers during economic downturns.

Digital marketing tools enable marketers to customize and hyper-target audiences using multiple customer data points. They can ramp down and up digital advertising expenditure for customer segments that are changing their buying habits and target the specific pain points of those specific segments. For instance, Millennials are less price sensitive during downturns; only thirty-five percent tend to buy less expensive brands to save money (Source : Advertising Week).

Social media platforms like Facebook, Twitter and Instagram allow digital marketers to create custom audiences and lookalike audiences to target specific customer segments. However, with the Apple iOS14 updates this customization capability of Facebook and Instagram has

reduced significantly. Now brands can reach limited customer segments on the basis of data modeling.

Marketers are fast embracing superior alternatives like moLotus with customization capability. It has proven to be extremely effective just about every time it is used whether applied to a small group or a large group of customers. Digital marketers are now capable of segmenting their customer data on the basis of diverse demographics, attitudes, purchase behaviors, interests, perceptions and more delivering brand messages with customer name or unique customer id.

3. Automate & Transform Business Processes

The current economic downturn has compelled several brands to rethink their business models and customer processes in order to stay afloat. Most are turning to digital transformation in order to drive efficiency, gain agility and cost savings. The global digital transformation market size is expected to grow at a Compound Annual Growth Rate (CAGR) of 21.1% during the forecast period, to reach USD 1,548.9 Billion by 2027 from USD 594.5 Billion in 2022 (Source : MarketsandMarkets).

Digital transformation needs the application of new and emerging digital tools & technologies. Digital transformation platforms like moLotus are helping digital marketers in improving efficiency by automating marketing activities that were earlier carried out by human employees including customer service enquiries, renewals, updates, sales calls, etc. By digitizing and automating these activities, brands can free up marketing staff for more value-added activities, generating more revenue quickly at low cost.

Marketing automation and digital transformation is helping digital marketers in increasing customer engagement through the use of breakthrough technologies like moLotus, chatbots, augmented reality, etc. providing a more interactive and engaging customer experience, building loyalty and getting repeat business even during these tough economic times. moLotus mobile video customer interaction platform has automated and digitized the entire customer journey right from lead generation, customer onboarding, customer support, mobile commerce, loyalty cards, mobile vouchers and more leading to enhanced customer engagement and rapid revenue generation.

4. Improve Customer Communication

The global recessionary pressures has thrust digital marketers and brands into uncharted territories where over-communication with customers seems inappropriate. But amid the economic downturn, digital marketers can and should remain part of customers’ lives by making the appropriate shifts in customer communication strategy and messaging.

Every customer, whether new or old, is exceptionally important at these tumultuous times. Marketers shouldn’t ignore or ghost customers during a tough time.The key right now is to invest in digital technologies to simply stay in touch with existing customers, maintaining an evergreen brand-customer relationship.

Unlike the 2008 recession when digital marketers had ‘less personalized’ email marketing in their marketing mix, they are now in a better position to build personalized communication with customers via advanced digital marketing tools like moLotus. They can entice more customers and increase sales revenues using moLotus hyper-personalization capability which is unique in itself.

Marketers are attracting new customers via moLotus hyper-personalized campaigns with options like name, greeting, reward, etc. engaging a massive customer base in a better way and acquiring more customers. In 2022, this technology could help drive richer, hyper-personalized customer journeys by presenting customers with hyper-personalized recommendations according to their preferences. Today, marketers can create more interactive marketing campaigns, strengthening brand-customer communication further, using moLotus customer response options like SMS, Callback, Click URL, etc.

5. Enhancing Customer Retention

During this economic slowdown, customers are getting more cautious about their purchase plans. They are checking the products or services from different brands to compare prices, value and product quality. Cost of acquisition is skyrocketing. New customers are becoming more expensive than retaining the existing ones. According to a Harvard Business Review report, acquiring a new customer is anything from five to twenty-five times more expensive than retaining an existing one. Thus, during a recession, brands retaining their existing customers are likely to have more sales.

Digital marketers have found loyalty campaigns working best in incentivizing existing customers. Research has shown that incentivized loyal customers willingly share their contact details, convert easily and turn into brand advocates even during uncertain times. Incentives could be in the form of discounts, special offers, etc.

Surveys suggest that loyalty and reward campaigns run via digital marketing tools like moLotus, Leadpages, Marketo, HubSpot, OptinMonster, etc. can be of great help in recession. Mobile-based reward campaigns delivered via mobile advertising platforms like moLotus have proved to be the best lead magnets. These are being used by brand advertisers during crisis scenarios to incentivize customers. moLotus has transformed loyalty campaigns and built strong brand-customer rapport via mobile loyalty campaigns. It has digitized, automated and personalized greetings, renewals, loyalty cards and rewards.

6. Resorting to Cost Optimization

As the economy worsens, customer confidence plummets with sales beginning to decline. Businesses tend to cut marketing budgets by around ten percent as a part of their strategic response to the economic crisis. But the question is, does cost-cutting work? Experts advise businesses to take a much more strategic approach to cost management. The best strategic response to a crisis is to aim to optimize costs rather than minimize them.

While advertising and automation costs might seem like an easy target for cutting, the innovation and revenues that they might bring for the businesses could give them a long-term competitive advantage during a recession.

Research shows brands that implement a cost optimization plan using new marketing and digital transformation technologies like moLotus have a higher chance of surviving and thriving in a recession. Digital marketers can get ahead of the recession curve by creating effective marketing campaigns at shoestring budgets. In fact, moLotus could be an economical and revenue-driving alternative to other expensive digital advertising tools like HubSpot, Google Ads, Facebook Ads, etc. moLotus is the only real mobile advertising platform that renders on all kinds of mobile devices without spamming and does not require any app download or data plans. Also, brands can unleash the cost-cutting potential of moLotus and bring down headcounts, together with printing and stationery costs, compliance costs, tele-marketing costs, etc. by automating the business processes.

7. Pivoting Marketing to Deep Data Insights

The uncertainty brought-in by emerging recessionary trends has led to massive changes in customer behavior, requiring astute data-driven planning by digital marketers and data scientists. Harvard Business Review research reveals that recessions change market conditions significantly, forcing customers to change their buying patterns and compare purchases with respect to essentials, treats, postponables, and expendables. Customers migrate into other niches or create new niches while buying patterns shift to show reduced buying capacity or more calculated spending.

To gauge the changing behavior of customers, digital marketers must collect and analyze as many data points as possible to understand how the recession affects their target audience. This is possible via Big Data analytics tools and technologies including moLotus, Google Analytics, Google Trends, Yandex Metrica, Facebook Analytics, Hotjar, etc.

Digital marketers across the globe are already implementing Big Data Analytics to get deeper customer insights using these analytics tools. Tools like moLotus offer advanced analytics are most preferred. moLotus enables marketers to get the right business insights, which will facilitate planning & thereby boosting revenue largely. With access to real-time moLotus analytics, digital marketers are capable of improving performance, optimizing advertising campaigns effectively, and earning greater digital marketing ROI.

Conclusion

A slowdown in the world’s top economies, growing inflation and supply chain disruptions seem threatening to adversely affect businesses. However, it is still unclear as to how big the changes might be and how exactly brands should react to the threats as anticipations coming from economists are mixed. Lessons from the most recent major economic recessions suggest that digital marketers should not decrease their marketing budgets. Instead, they should repurpose it for more contextual and targeted marketing activities. They should focus on using new digital marketing technologies in the best possible ways to acquire, engage, retain more customers, marginalizing the impact of recession.

Buana Sari is an online marketing enthusiast and a blogger who closely follows the latest digital marketing trends, digital marketing platforms and lead generation strategies all over the world.