While economists and investors debate whether we are or aren’t in a recession, 78% of marketers say it's already here.
Since marketers are usually the first to see budget cuts in an economic downturn, it’s no surprise they’re already being hit hard. As one marketer in our sums it up:
“The company is losing money, having to raise pricing, and the budget for marketing is smaller. Because prices are higher and the marketing budget is lower, there is not enough marketing for the traffic and conversions we need.”
To help marketers recognize they're not alone, we surveyed 300 marketers to find out exactly how they are being impacted by the recession.
While 47% of marketers said that the economy was already having a negative impact on their work, we also dug deeper to discover three key impact themes marketers are experiencing.
In this post, we'll highlight those themes, share quotes from anonymous marketers who's participated, and offer resources or tips to help you navigate this time.
Three Marketing Impacts Caused by Recession Concerns
1. Consumers are spending less and exercising more caution/discretion:
Though not surprising, the biggest impact marketers are seeing is that consumers are cutting costs back due to uncertainty. This aligns well with data we've found from multiple consumer pulse surveys over the last six months.
From inflation to geopolitical uncertainty and lingering COVID-19 concerns, consumers simply have no idea what to expect from the future.
“People are spending less because they do not know how long the recession is going to last. As a result, they spend less on our products," says one survey respondent.
To make matters worse, a majority (67%) of marketers expect the recession to last more than six months, and one-third expect it to last more than a year:
While we don't have a crystal ball, aren't giving legal or financial expert advice, and can't possibly know what a full-blown recession will feel or look like at this point, it's important to remember that recessions are often unavoidable. While we can't prevent them, it's important to continue leveraging credible sources, data, and experts beyond just a few publications when determining when, if, and how a modern-day recession would impact your business.
2. Inflation has made everything more expensive across businesses.
While consumers are pulling back spending, inflation forces businesses to raise prices and cut budgets for things they're purchasing to stay afloat.
As a marketer in our survey put it, “higher prices make it hard to make ends meet. I have to delay payments, purchases, and planning.”
Company’s raising prices while consumers are scraping by leads to a misalignment between the two parties, leading to frustration on both sides.
3. 37% of marketers have already seen budget cuts.
Marketers in our survey say they’re “needing to spend more to get similar results from six months ago.” At the same time, their budgets are being cut.
With their usual marketing channels proving to be less effective than before, marketers are having to get creative.
On top of that, one in three marketers say a recession will have an even bigger impact on their marketing activities than COVID-19, while another 33% say it will be about the same.
One way to stay ahead of the game is by following suit of the 80% of established marketing leaders, who participated in another survey we ran, saying they’ve already planned or prepared for a recession.
If you run a team or major project that requires a budget, and haven't started strategic planning for different company outcomes, here's a helpful guide. For marketers at any level, it can also be a great idea to make pivot or backup plans for how you'll adjust your content, schedules, or other aspects of your work if something unexpected happens.
So what now? We’ll run this same survey at a later data in the coming year and keep you updated on how the recession continues to impact marketers. In the meantime, you can review consumers' take on this time, get insights from marketing executives, or catch up on everything else going on in our quickly-changing field with our 2023 Marketing Strategy and Trends Report.