1. Continue Advertising – it will help to keep your brand top of mind and gives you an opportunity to connect with your consumers.

With talk of an impending recession some brands are reassessing their budgets, priorities and strategies and are questioning whether to advertise at all.

It can be difficult to prove the value of advertising, particularly for brand advertising. But, based on the analysis of advertising during a crisis from previous recessions, it has been proven to provide long term gain for those brands that do, even if there may be short term losses or costs associated.

So here are some points to consider:

• What do we have to lose if we don’t advertise? - Evidence from previous recessions shows longer periods off air will weaken brand health and damage market share due to a reduction in share of voice.
• What do we gain if we continue to advertise? - If managed properly, crises can present companies with opportunities to gain the trust and respect of consumers, shareholders and employees. In fact – when we surveyed people during COVID, 86% of consumers expected brands to advertise during periods of crisis. There can also be huge gains for brands that show their support and community commitment. It is another chance for us to connect with our audience and show them that we understand them.

We need to take a long term view of our brand – don’t think about today, but about how we want our brand to be perceived when the world returns to normal.

2. Keep in mind that consumers are worried about increasing costs of living – so providing perceived value will be important.

In our annual Christmas study at the end of 2022, 36% of people felt that this Christmas would be different to other years. In Australia and the US, 28% claimed they would be spending less than usual on Christmas (this was up 3% compared to 2021). Whereas the situation was more extreme in the UK where 42% claimed they would be spending less than usual – up 23% from last year.

At the moment, according to the Ipsos Issues Monitor, finance is an issue which is most top of mind for consumers. They are worried about increasing interest rates, the rise of petrol prices and general costs of living. People are wondering how they will make ends meet and are looking for ways to cut back.

For our brands, this means that a focus on perceived value is important. Do we have an offer, benefit or cost saving we can provide? Can we provide volume savings for larger formats? Can we suggest ways to save?

3. Do something to help! – Consider how you can lean into your Brand purpose and positioning to show your support.

In our ‘Luma IllumiNation’ surveys in December 2021 and 2022, across US, UK and Australia, over 85% claimed to want brands to serve the public interest and show their support. It is not enough to talk the talk, people want brands to show, not tell, how they care.

And if we are able to do that, brands will be rewarded. 86% of those in US and Australia and 84% in the UK agreed that they will feel more positive about brands that show their support to the community.

So, what can you do? It might mean establishing a charity partnership or promoting community give back events. Align it to your purpose and stick with it for the long haul and you will strengthen your brand.

4. Be Understanding + Show Empathy – Greater bonds can be created through a time of crisis.

If you do choose to continue advertising, maximise your impact by using this time to connect with your audience and demonstrate your understanding and empathy.

In our studies, over 80% across US, UK and Australia said they want brands to show they understand how consumers are feeling. This can help to build a feeling of relevancy for your brand and leave people feeling that you are a ‘brand for them’.

This means being genuine and authentic. Use a relatable tone of voice – not too patronising or earnest, but show that you understand how people are feeling during these uncertain times.

5. Keep it light - People like brands that make them laugh and feel good.

We see it time and time again – laughter is the best medicine. Those who have studied psychology know that laughter has a physiological impact on us – endorphins are released and it helps us to relax and feel good. As a result, we tend to like the brands (and people) who make us laugh.

Humour can also help to distract people from the reality of the situation. Or even laugh at the situation, which can help us deal with what we are going through.

And above all else, showing the lighter side of life can inspire people with a sense of hope. It can provide little moments of joy for our consumers. People will remember this and love us for it.

6. Stay close to your consumers – Check in and listen to them. They will be your best guide in how to proceed.

If in doubt about your approach, use research to check in with your consumers to ensure you get it right.

These past few years have been volatile and things change so quickly. So don’t assume that you know or that your own personal views reflect how the rest of Australia is thinking (…you are not your target audience 😊).

Research is cheap. Advertising and media are not. When budgets are tight, we need to ensure our creative is going to be effective and our media is efficient….so to ensure your ROI, talk with your consumers so you can be sure you are making informed decisions to grow your brand.

It is a tricky time, but see the situation as a chance to connect with your consumers and steady your brand for when we make it out the other side. Good luck!

If you any need help or further insights, please reach out to the Luma team.