How to recession proof your ads and meet customers where they are

The opinions expressed by entrepreneurs contributors are their own.

Depending on which headlines you believe, either we're heading into a long, ugly recession, or some parts of the world are already in one. Either way, it's not pretty – and consumers and advertisers are bracing for an impact. Even in July, when markets momentarily showed signs of recovery and gas prices fell, 54% of American adults said they planned to cut spending for the rest of 2022.

While that means budget cuts and even layoffs are a reality, it doesn't necessarily mean your advertising budget stops working for you. Lessons from the past give us a good idea of what consumers are thinking and what that means for how to advertise in the months to come.

Related: 6 Recession-Proof Business Marketing Strategies
Consumer behavior during economic downturns and recessions
A recent Stanford study quantified how different consumers experience economic downturns and recessions differently. During the Great Recession from 2005 to 2009, self-identified Hispanic and LatinX households lost 66% of their wealth, and black households lost 53%, while white households lost only 16%. In 2010, while the overall rate was around 10%, it was 16% for the Black community and 13% for the LatinX community.

This means that these consumers lived in a different economic reality and behaved very differently when it came to how and where they bought and what mattered to them in marketing messages. In other words, reaching consumers in the right mindset and in the right context is more important than ever, especially as the holidays approach. So what do we know about this new world order?

Consumers are very price sensitive: they always have been, but they are more price sensitive than ever. More U.S. consumers reported switching to different brands and retailers in 2022 than at any time since the pandemic began as people seek value and cheaper prices.

They're cutting extras and postponing major purchases: One in five consumers are reducing the number of subscriptions they have and delaying major purchases such as buying a new car or postponing major home renovations .

They are buying less: they are adopting a more conservative and sustainable lifestyle, with 18% experimenting with the resale of their belongings and 15% buying more second-hand or refurbished goods.
>
Omnichannel shopping is the norm: 45% of consumers say they influence their purchases, while one in ten omnichannel shoppers say they have made purchases directly through social media. It's a channel that only grows in importance every day.

Business Nov 11, 2022 0 54 Add to Reading List

How to recession proof your ads and meet customers where they are

The opinions expressed by entrepreneurs contributors are their own.

Depending on which headlines you believe, either we're heading into a long, ugly recession, or some parts of the world are already in one. Either way, it's not pretty – and consumers and advertisers are bracing for an impact. Even in July, when markets momentarily showed signs of recovery and gas prices fell, 54% of American adults said they planned to cut spending for the rest of 2022.

While that means budget cuts and even layoffs are a reality, it doesn't necessarily mean your advertising budget stops working for you. Lessons from the past give us a good idea of what consumers are thinking and what that means for how to advertise in the months to come.

Related: 6 Recession-Proof Business Marketing Strategies

Consumer behavior during economic downturns and recessions

A recent Stanford study quantified how different consumers experience economic downturns and recessions differently. During the Great Recession from 2005 to 2009, self-identified Hispanic and LatinX households lost 66% of their wealth, and black households lost 53%, while white households lost only 16%. In 2010, while the overall rate was around 10%, it was 16% for the Black community and 13% for the LatinX community.

This means that these consumers lived in a different economic reality and behaved very differently when it came to how and where they bought and what mattered to them in marketing messages. In other words, reaching consumers in the right mindset and in the right context is more important than ever, especially as the holidays approach. So what do we know about this new world order?

Consumers are very price sensitive: they always have been, but they are more price sensitive than ever. More U.S. consumers reported switching to different brands and retailers in 2022 than at any time since the pandemic began as people seek value and cheaper prices.

They're cutting extras and postponing major purchases: One in five consumers are reducing the number of subscriptions they have and delaying major purchases such as buying a new car or postponing major home renovations .

They are buying less: they are adopting a more conservative and sustainable lifestyle, with 18% experimenting with the resale of their belongings and 15% buying more second-hand or refurbished goods.

Omnichannel shopping is the norm: 45% of consumers say they influence their purchases, while one in ten omnichannel shoppers say they have made purchases directly through social media. It's a channel that only grows in importance every day.