Why Marketing Spend is Even More Important During a Recession?
How to Spend Marketing Dollars Effectively During a Recession
Despite what many believe, it is essential for your cannabis brand or retail business to continue allocating money to marketing even during a recession and an industry downturn. Doing so will ensure you not only maintain market share but also grow. In fact, your should be dedicating more resources to your marketing efforts if you want to elevate your company to new heights. Consider the following:
A study by the Advertising Research Foundation found that brands that maintain or increase advertising during a recession experience a 4x higher increase in market share than brands that decrease advertising.
According to a report by WARC, brands that allocate 60% or more of their advertising budget to digital channels see a 1.6x increase in revenue growth compared to those that allocate less than 30%.
A study by Deloitte found that companies with strong brand consistency across all channels see a 20% increase in revenue on average.
Cannabis consumers want to connect with your brand! If you stop spending and your competitors do spend, you will lose market share by falling out of the conversation.
The solution isn’t to slash the budget but to optimize the media mix and invest in channels that are performing well. Finding the right balance ensures that spending is properly allocated for reach, efficiency, and frequency.
Investing in media during a recession can actually end up saving brand money, as industry pull-back creates a supply-and-demand dynamic that favors ad buyers and lowers media costs.
In addition to a favorable media costs environment, brands may also find competitors have scaled back on advertising, which creates an opportunity for campaigns to have a greater impact.
Now that we have determined it is mission-critical to spend during uncertain times, let's dive into three tips to help guide your marketing spend as the industry is going through turbulent times.
Driving Organic Traffic
When there is a recession, it is crucial to maintain organic traffic to your brand or business. You can do this by spending on more effective mediums such as Weedmaps and Leafly. Creating a presence on these platforms will put your brand or business in front of consumers and wholesale buyers ready to make a purchase. Build your profile to be fully optimized to allow for online ordering and redemption of deals to increase the likelihood these customers convert successfully. In addition make sure to include essential information such as hours of operation, updated images, and online ordering options. This can help to ensure that potential customers have all the information they need to make a purchase and increase the likelihood of conversion.
Once the profile is optimized, businesses can then consider amplifying their marketplace through programmatic display advertising. This type of advertising allows businesses to target specific audiences based on demographics, interests, and behaviors, and display ads on websites and mobile apps that the audience is likely to visit.
Programmatic display advertising can be an effective way to drive new customer acquisition and increase brand awareness, especially during a recession when consumers may be looking for deals and promotions. By offering daily and weekly deals, businesses can entice new customers to make a purchase and potentially become repeat customers.
Spending on Programmatic
Another tactic to consider during a recession is programmatic advertising. As MG Retail – a reputable cannabis business publication – notes, this can support your brand or business goals by putting you in front of your relevant audience, increasing efficiency, & gaining real-time insights from enhanced reporting. Programmatic advertising automates ad buying and provides the tools to allow advertisers to optimize campaigns eliminating impression waste ensuring your dollars are only being spent on publishers, audiences, and tactics that are driving sales or foot traffic.
Investing in Loyalty Programs
Having an established loyalty program is a great way to keep customers coming back throughout a recession, driving recurring revenue for your business. According to one report, 62% of loyalty experts surveyed believe loyalty programs helped keep customers engaged during the COVID-19 pandemic. This statistic makes it clear that loyalty programs can be beneficial in a recession.
A rough economic period shouldn’t mean cutting back on marketing. If anything, it is a chance to stand out from the competition and grow. By implementing these marketing tips, your brand or business can stay resilient until the end of a recession.
