Just over two years ago, as the reality of a global pandemic set in, marketers the world over reacted with everything from resolve to anxiety to panic. Budgets and teams were slashed, engagement patterns swung, and lessons—including how to employ an agency in turbulent times—were learned.
As we head deeper into the summer of 2022 and come to terms with a big pullback in consumer, corporate, and investor spending, it’s a good time to build on what we learned in 2020. The macroeconomic scenario is different, but a few big lessons are the same—most critically, brands need to avoid seeking quick relief that will compromise the longer term.
Invest Now, Thrive Later
First, memorize the following: companies with the resources (and fortitude) to spend money during a recession can position themselves to win the long game.
Consider two competitors in the same vertical (this can be B2C, B2B, etc.). One reacts in a panic and cuts spend at the top of the funnel to focus on short-term performance and ROI. Spending and some full-time positions are reduced, but the marketing lead saves their job in the near term. The other competitor recognizes that spend in the vertical overall is being pulled back, CPMs and CPCs are down, and there’s a huge opening to build awareness and grab leads. The marketing lead leans on their agency to pull reports and projections showing a) the detrimental long-term effects of pausing spend and b) the growth available over the next 12-18 months for brands that stay top of mind for when customers are ready and willing to make purchase decisions again.
Stopping spend is the easy part; regaining previous efficiency levels takes a lot of time. In the above scenarios, the first marketing manager will struggle to explain why they can’t achieve the performance they did before spending cuts; the second will be in line for a promotion.
We experienced both types of client in 2020. Many paused budget immediately without much analysis of downstream effects; others slowly turned up the dial. In the B2C vertical, companies that paused spend felt immediate budget relief and an instant reduction in acquisition. In B2B, companies that paused spend got immediate relief, but they struggled tremendously to rebuild momentum months down the road. On the other hand, B2C companies that continued to invest saw reduced engagement costs that mitigated lower conversion rates, and B2B companies with resources to invest gobbled up market share, built their pipeline, and cashed in on opportunities left as their competitors pulled out of the picture. Two clients in particular achieved double-digit growth gains in less than a week through display and competitive campaigns alone, and they continued to thrive far down the road thanks to the awareness they built in the first half of 2020.
Greenfield in the digital space is a rare thing; especially on Google and Meta, good economic climates can drive engagement costs almost out of reach for many advertisers. Keep a level head and understand that companies that panic and cut spend in rough economic seas are giving you a gift.
Flex and Adapt
All that said, we realize some cuts can be inevitable. Vendor costs, tech subscriptions, acquisition spend, and full-time employees might all be under scrutiny. Complicating things even further, digital marketing is evolving quicker than ever, and good marketers have to develop a broad range of expertise to keep pace.
When times are good and budgets are flush, getting the time and resources to make sure your team is fully trained is relatively easy. In shakier times, when resources have thinned and pressure to perform is high, good agencies can step in to address any tactical gaps ranging from channels to reporting to implementing offline conversion tracking to close the gap between conversions and revenue.
In short, turbulence can cause strategic pivots. Brands trying to turn the ship themselves will have a huge turning radius, but brands who can call on agency partners will stay nimble and make sure any strategic shifts are swiftly reflected in media campaigns.
Read the Tea Leaves
Speaking of agencies, remember that your agency has a broader base of data than you do and can give you valuable perspective on both internal and external data. Before you make a call to adjust spending, sit down with your agency partners for a deep dive into the full picture: what’s working now, what’s planting valuable seeds for mid-term and long-term growth, and what’s easy to reduce or pause with less long-term impact.
As for the external picture, agencies can see in real time how metrics are reacting to economic shifts. CPCs and CPMs will shift both in general and within certain industries, so make sure you’re accessing all the agency-level insights you can before making big decisions. Leverage agency partnerships with platforms like Google, Meta, and LinkedIn to get your head out of your own data to understand, on a macro level, where patterns and opportunities are developing.
Ask Questions
Agencies, just like brands, need to keep an eye on the long term, and this means working with clients to make sure both parties emerge from turbulence in decent shape. As an agency CEO, I would much rather work to keep our clients viable and healthy for deep, enduring partnerships than squeeze every dollar out of them in tough times. That means that, as clients, you can ask about contract flexibility. Ask for utter transparency about how we’re working with your data and your campaigns.
The right agency will act as a true business partner, pulling back the curtain to show you everything you need to know and working with you to adjust contract terms. Some of our strongest client relationships were forged in 2020, and this time around will be no different. Make sure you’re asking all the questions you need to put your agency to the same test (if nothing else, it’s a good way to tell when you might not have the best partner).
We’re always happy to chat with companies who need guidance on how to navigate the path ahead. Drop us a line if you have any questions.
