The Pandemic Hangover & Marketing Through A Recession
The following article is a syndicated copy of The Influence Agency's annual report, The Yearbook.
With one major global shift happening right after the other, marketers are challenged to be more versatile and insight-driven than ever. From navigating a post-pandemic consumer landscape to dealing with high rates of inflation, and now the looming threat of a recession, 2022 has been a year of ups and downs.
The question is, how can brands adapt their marketing strategies during these turbulent times in order to thrive?
The Pandemic’s Effect on Consumer Behaviour
The COVID-19 pandemic turned the whole world upside-down. Never was there a time in recent history that such an event altered nearly all aspects of daily life on a global scale. As the world changed, consumer behaviour also changed and marketers needed to be quick on their feet to meet the new demands. Businesses that quickly adapted to the changes managed to get an early advantage.
These statistics paint a picture of how much the pandemic shifted buyer behaviour in terms of shopping and content consumption:
E-commerce sales increased by 43% in the first year of the pandemic.
Amazon Prime had 50 million new subscribers during the pandemic. This contributed to Amazon’s profits soaring to 220% by early 2021.
Even during the first stages of the pandemic, social media usage went up by 10.5%.
Fifty-one percent of adults used social media at higher rates during the pandemic.
Though relatively new, TikTok, saw a significant increase in popularity during the pandemic. The platform now has 1 billion monthly active users.
Driven by the pandemic, videos that promoted self-care, gave the experience of social connection, and helped with establishing identity gained traction on YouTube.
Marketing During a Post-Pandemic Hangover
Many countries are declaring that the crisis chapter of COVID-19 is either over or nearing its end. By the end of 2022, we’ve already seen this cause a shift in demand, leading to what some businesses will experience as the “post-pandemic hangover.”
The post-pandemic hangover can be specific to certain industries such as health insurance, delivery firms, and e-commerce platforms. These industries have seen a surge in business over the last few years driven by the pandemic, which is now rebalancing.
In a marketing sense, the post-pandemic hangover pertains to nuances in customer behaviour following the end of the pandemic. Unlike industry-specific post-pandemic hangovers (which reflected declining revenue and layoffs), numerous reports state that customer behaviours driven by the pandemic are likely to stay. However, the prevalence of these continuing customer behaviours remains to be seen.
Does Inflation Impact Marketing Strategies?
Amidst factors like supply chain shortages, rising fuel costs, and global conflicts, prices are rising in many parts of the world. Brands need to take inflation into account when planning their marketing strategies for 2023, along with the recent shifts in customer behaviour driven by the pandemic and our new post-pandemic world.
This inflation trend isn’t tied solely to physical currency. The cost of digital advertising is also on the rise with factors such as increased competition, customer expectations, and automated bidding strategies driving up the cost-per-click on today’s largest digital ad platforms. In fact, CCP has already increased significantly in 2022 compared to the previous year across a variety of different industries.
So what can you do to keep your digital ad campaigns strong in this difficult marketing landscape? Here’s what we recommend:
Getting Smart With Your Budget: While marketing budget cuts might be necessary, it’s vital that they don’t get slashed altogether. Without paid ads, you’re at risk of hurting customer retention rates and leaving room for your competitors to take over. What’s important is for brands to be smarter with their budgets and find innovative ways to connect with consumers, while also doubling down on what’s been proven to work in the past.
Awareness Matters: Even in the face of economic uncertainty, awareness campaigns still deserve attention. It is critical for customers to be aware of products and services for them to make a purchase. Brand awareness and brand recall are important but cannot stand by themselves.
Conversion Rate Optimization Matters Even More: To make the most of ad spend, businesses need to take a closer look into conversion rate optimization. This helps to boost the return on ad spend which, in uncertain times, is the marketing metric that gets attention.
Leveraging on Value-Seeking Behaviours: In the face of inflation, there is an increase in value-seeking behaviours. Customers want the most for their money. Think with Google states that phrases like “buy 1 get 1” and “loyalty program” are getting more search interest. Brands need to listen to these preferences and demands in order to get ahead of the competition during a time when every penny counts.
Adapt and Thrive During a Recession With the Right Strategies
Although it hasn't felt like it in recent months, inflation is most likely temporary. During these challenging times, you can ensure your business runs smoothly and continues to grow by making some adjustments and remaining agile.
As for industries that are seeing declining demand connected to the post-pandemic landscape, forging stronger connections with customers (through authenticity and community-building) will fuel any needed innovation for your business to thrive.
With a strong understanding of the current consumer landscape and creative marketing strategies in place, you can continue to succeed in 2023.
The original copy of the article can be found on The Influence Agency's annual report, The Yearbook.