1. Reduced Marketing Budgets
A survey by Advertiser Perceptions indicated that one in five marketers has reduced their marketing budget due to inflation, with budgets dropping by an average of 16 percent. This is especially true for upper-level funnel channels which focus on brand awareness.
2. Leveraging Existing Customers
Due to the reduced marketing budgets, many businesses are seeking to maximize the value of their existing customer base. This could involve offering discounts and promotions to encourage loyalty, or targeting existing customers with new products and services.
3. Opportunities to Take Advantage of Increased Consumer Spending
Despite the financial pressure caused by inflation, many consumers are still willing to spend. As such, businesses can look to capitalize on this increased spending by offering promotions, discounts, and other incentives. Additionally, businesses should consider investing in marketing that focuses on more immediate ROI, such as retargeting campaigns.
Why Inflation-Driven Panic Can Spell Opportunity for Digital Marketers
In a recent webinar, consultant Gordon Borrell noted the rising number of small businesses perceiving the current economic climate as unfavorable
During times of crisis, marketers are often hesitant to increase their spending, even though consumers may still be spending more.
During this period of inflation, digital marketers may be hesitant to increase their marketing budget out of fear that consumers are not buying as much. However, data suggests that this is not the case, and this is an opportunity to scale up and stand out in an advertising market with less competition. Consumers are spending more time on digital media, which allows marketers to take advantage of this moment and be present in their customers’ lives. With less competition, marketers have a greater chance of increasing their audience share. Additionally, this period of inflation calls for unique marketing practices, such as promotions to help compensate for losses during the pandemic.
Marketers can use this period of inflation to their advantage by running limited-time, measurable promotions to quickly increase new customer acquisitions. Such promotions will allow them to grow their customer database and first-party data, which can then be leveraged for email marketing to nurture and build loyalty. Examples of suitable promotional activities include offering coupons, rebates, contests, giveaways, and games. By investing more during the inflation period, marketers can expect to receive a significant return on their efforts
Conclusion
During times of inflation, digital marketers often find themselves in a difficult situation. On one hand, the rising cost of goods and services can lead to a decrease in spending on marketing. Yet on the other, those with the financial capacity to invest more are presented with a unique opportunity. With less competition in the space, the inflation period allows marketers to capture more first-party data that is becoming increasingly important in an era of privacy-focused marketing. Furthermore, taking advantage of the changing market conditions could be a great way to gain an edge over competition.