Boosting marketing may be key to weathering economic downturns

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At TechCrunch Disrupt 2022 in San Francisco, LinkedIn VP of Product Management Gyanda Sachdeva kicked off a session titled All Weather Marketing: Making Good Decisions In Bad Times by claiming, "...the truth is, cutting marketing spend in a downturn is a really bad idea."

This business wisdom may have seemed counterintuitive to mob leaders: the knee-jerk reaction of most businesses is to cut back on marketing, but Sachdeva advocated increasing it during some of the most turbulent times a business is in. confronted. However, historical data proves that the companies that spend more on marketing during an economic downturn end up being the ones that grow, even after recessions.

"There's over 100 years of research on this topic that shows that the companies that increased their marketing spend during a recession are the ones that increased in the years following the recession," reassured Sachdeva.

Here are three concepts that leaders at all stages of their business should use to market effectively during an economic downturn. By using a combination of marketing tactics, any business can emerge strong from economic instability.

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Sachdeva cited a recent LinkedIn report that found that even in tough economic conditions, the entrepreneurial spirit is alive and well. The report found that in the first 10 months of 2022, 274,000 new companies were created, 226,000 people became first-time founders, and 1.1 million workers joined these startups.

The employee base of startups has also quadrupled over the past three years during sub-optimal economic times. Although it seems counter-intuitive, history confirms these measures. In fact, General Electric, IBM, HP, Salesforce, Microsoft, Airbnb, Uber, and Venmo all launched during economic downturns and grew into the giants we know today.

Why are gloomy economic forecasts driving the creation of new brands? A study conducted by the Marketing Science Institute (MSI) explained that recessions focus buyers' attention on fewer, high-quality business launches. Indeed, the added uncertainty of these times tends to produce a company's best product: capital is limited, which further reduces the margin for error. This recipe has created some of the most recognizable brands in the world.

Relaunch, refine and reinvigorate marketing activities

Existing brands have their own set of challenges, including how to view content creation in turbulent economic landscapes. As marketers, we're usually only as good as our latest new idea and how well we can execute it. However, recession marketing reverses the situation. Sachdeva suggests that now may be the best time to double down on previously successful creative assets. Finding new materials takes time, energy and resources, which can overwhelm a company trying to stay afloat.

"Old creations don't wear out; they wear out," Sachdeva said. It also saves companies from executing unproven creative concepts that may not succeed - th...