Pull back or push forward

July 29, 2022

What’s the best approach during a downturn?  

Read the news lately? It’s not looking great. The signs of a downturn are here – rising interest rates, soaring costs and a general sense of economic gloom.  

This forecast doesn’t just affect home buyers and banks, it leads to major changes for everyone – business included. Already, 20% of Kiwis are planning to cut back on future spending, which will have a knock on affects on businesses.  

In anticipation of lower spending and increased costs, businesses all over New Zealand will be looking for ways to save. For many, advertising is one of the first items on the chopping block. The logic is that advertising is a nice-to-have, not an essential business expense like staffing or equipment. Why not save some cash by cutting it?  

It’s not quite that simple. While putting a hold on your advertising might save a little right now, it could cause damage down the line.  


Keeping your brand top of mind  

Peter Fields’ Research into past downturns shows that businesses that keep their brand top-of-mind generally fare better in the long term. Even if your customers are spending less in general, they’ll still be consuming media and absorbing advertising. If they lose sight of your brand during a downturn, they may not return when the economy bounces back. It’s about continually creating future demand for your product or service. 

It’s about staying positive and maintaining your share of voice (SOV). Share of voice is your percentage of advertising spending in your category. For example, if you spend $5 million on advertising in a category worth $100 million, your SOV is 5%.  

In the 2008 recession, according to research, businesses that cut back on advertising and reduced their SOV faced a longer, more difficult recovery. Because SOV tends to correlate to market share, reducing SOV means losing followers – and it can be expensive and time-consuming to get them back. In the long term, it’s better to maintain your spend through the crisis – even if it’s tough in the short term.   


Cost-effective cuts  

Of course, there’s plenty of space between slashing your ad budget and maintaining pre-recession levels of spending. It is possible to rework your ad strategy and choose cost-effective options without losing your audience.  

Digital is one way to make the most of a reduced ad budget. Unlike traditional channels, digital can help you reach a wider audience without the expense. Its targeted nature means you’re more likely to reach the right audience, offering a stronger ROI on your spend.  

Content production can also be much cheaper. Unlike TVCs or radio, which require major budgets and expert input, you can produce your own content for social media, write blogs or articles to boost your SEO and create simple but effective digital ad content. This means, instead of using an outside agency and investing in long, complex campaigns, you can create content in-house – and potentially get the same kind of result for a far lower price.   


Quick and responsive  

Digital advertising also offers the twin benefits of speed and flexibility. Producing content is quick and simple, meaning no long lead times for a new campaign. Update your social pages as you please and place ads almost instantly with the help of a digital advertising agency.  

That speed can help you be more responsive to your market, driving better results. In our environment of shifting sentiment and fast-moving demand, this can be a major benefit. You can spot online trends and build ad content to jump on board, pivot in response to market changes and quickly pull advertising that isn’t working.  



Digital advertising comes with built-in tools to measure and track performance as it happens. Test different ads or emails, change ad placements in response to customer behaviour and target different customer segments throughout a campaign – it’s all about flexibility and maximising value.  


Stay the course, strengthen your brand 

As we’ve seen, cutting your ad budget during a recession can do more harm than good. The safer option? Stay the course, maintain your SOV and use this opportunity to build your brand and connect with customers. If you can keep your brand front of mind through a downturn, you’re more likely to come out in a strong position at the end of it.  

And digital advertising is a crucial piece of the puzzle. Simple, affordable, fast, flexible – and, most importantly, effective – it can help you maintain your market share without breaking your ad budget. 

Want to explore your digital options? Get in touch.