Why is it Important to Invest in Digital Marketing During Australia's Recession?

by James Lawrence on 
June 19, 2020 | 
Digital Marketing Strategy, Rocket News
James Lawrence

Well, it's official… Australia is in a recession.

The quirky thing about a recession is that you don’t know you’re in one until many months after it has already started.

Defined as two consecutive quarters of GDP decline, it was almost guaranteed once COVID hit that Australia would experience its first recession since 1991. I addressed this in my article published in Smart Company in May 2020.

So first of all, let’s talk about the elephant in the room.

What does an Australian digital marketer know about marketing in a recession?

Given the last recession Australia experienced corresponded with the year Tim Berners-Lee made the world wide web publicly available, this may be a fair question to ask.

The answer is that marketing history, digital marketing through the GFC in the USA and common sense provide the roadmap that Australian businesses should follow on the difficult path ahead.

Growing market share is much easier in a recession than during a boom.
Here’s how to do it.

Recent history and innumerable case studies from the GFC crisis give us plenty of examples of businesses using recessions to grow market share by increasing marketing spend while their competitors decrease theirs.

The reality is that there will be customers you lose and customers your competitors lose.

Since the COVID-19 shutdowns began, we have seen marketing and advertising budgets cut aggressively worldwide.

At Rocket itself, we have seen an average decrease in client spend in digital of about 30%.

A Marketing Week survey in the UK reported that 90% of marketing budgets were delayed or under review and suggested advertising investments in the UK were likely to be reduced 30% to 60% through the remainder of 2020. Only 7% of businesses responded to that survey suggesting their business was taking a deliberate approach to invest more through COVID-19.

Without coming across as the self-serving ‘marketing guy who tells businesses to spend more on marketing’, there are compelling reasons to consider increasing, not decreasing, your marketing budgets currently.

There is unlikely to be a cheaper time to get bang for your marketing buck than in the months to come. If your business is planning to be around for the long-term now is the time to take advantage of cheap advertising. This is one of the best times to capture the market and bring your brand front-of-mind of your prospects.

Former chief of Procter & Gamble, Alan G. Lafley said of marketing in poor economies: “We have a philosophy and a strategy. When times are tough, you build share.”

The proposition is simple. Advertisers are cutting budgets across virtually all channels — TV, radio, outdoor, YouTube, Google, Facebook and LinkedIn — but eyeballs on these channels will typically not have reduced by the same rate. Hence the ability to buy reach at a cheaper rate than before COVID-19.

Obviously, some of the channels above have decreased reach. Fewer people commuting to work means fewer eyes on outdoor advertising, and offices being closed means a decrease in workplace radio listens.

This, however, is not true for digital channels. Platforms such as YouTube, Facebook, Instagram and Google are reporting record numbers of views, time on platform and usageOur clients’ campaigns are also showing a clear decrease in the cost of advertising, increased click-through rates and an increase in search impression share, with many competitors pulling out of advertising. 

Buying cheaper impressions while your competitors batten down the hatches will mean increased market share for when things pick up. 

This was the model that Kellogg’s famously used during the 1920s recession. At that time, Post was the leader in breakfast cereals. Post slashed marketing budgets due to the poor state of the economy and Kellogg’s doubled its own budgets and launched Rice Krispies at the time (snap, crackle and pop!). Their market share grew by 30% and it has been a breakfast cereal leader ever since.

During the 1991 recession, McDonald’s cut back heavily on marketing budgets. Pizza Hut and Taco Bell doubled down, each growing sales by more than 40%, while McDonald’s saw sales decline 28%.

Amazon was super aggressive during the GFC in the USA and used the opportunity to grow market share. 

I know that, in reality, most small businesses and startups don’t have budgets like that of Kellogg’s, McDonald’s or Pizza Hut to play with. This principle, however, applies equally to smaller and more local businesses.

If you are going to be around in a few year’s time, and you can afford to not cut your marketing budgets, then be aggressive and double down on your marketing efforts. 

You might not run direct acquisition marketing if your offering can’t be properly procured at this time, but look at strategies to buy market share and invest in long-term growth when your competitors aren’t.  

Understand your market condition and pivot your marketing

I have come across many marketing campaigns in the past two months that have been tone-deaf to the situation the world is facing. Campaigns clearly devised with the goal of retaining or hitting pre-COVID-19 sales targets. Requests for customers to buy, aggressive email marketing promotions and calls to action that suggested the world had not changed.

I understand that as marketers and business owners, we are under pressure to drive revenue. But understand your market, accept things have changed and you need to move at a speed that meets the new reality. Your offering needs to align with the new world your prospective customers are living in.

Being market-orientated or customer-centric means a business is led by customer needs. Rather than marketing being driven by product development or sales needs, market-orientated businesses look at the needs and desires of prospective customers and this drives the rest of a business.

Now is the time to be market-orientated.

Few businesses and few people have avoided being impacted by the medical emergency that was COVID-19 or the economic fallout. With the recession in play, every business will be impacted.

Before devising a campaign, running a post, or sending an email, make sure you have put the needs of your prospective market at the forefront.

It has been encouraging to see the positive pivots that many businesses have taken to address the needs and wants of customers in the age of COVID-19. Retailers offering discounted care packages, local restaurants offering cook at home packages and previously face-to-face experience businesses going virtual.

Now, with the economy reopening and a recession in play, remember that whatever your industry, your prospective customers are likely in a different frame of mind now than they have been traditionally. Re-assess what their needs are now and allow this to alter your marketing strategy.

Invest in long-term marketing activities

As alluded to above, many markets are still not fully functional at the moment.

It makes no sense for airlines running ‘2020 European summer’ promotional fares or clubs to organise grand dance parties.

But this does not mean that impacted businesses should be turning the marketing taps off entirely.

This is said with the caveat that many businesses are in distress, and for them it may be a fight for survival, not a time to be thinking long-term. But if you can, put in place marketing activities which will bear fruit when things inevitably pick-up.

Here is a list of the types of long term activities we are encouraging clients to consider which will pay dividends over the longer term. We are a digital marketing agency, so excuse the slight bias towards digital channels in this list. Consider offline equivalents if offline is more important to your marketing mix.

1. Produce, publish and distribute more content that is relevant to your business and your audience

The greatest simple content marketing case study of all time is Marcus Sheridan of River Pools in the USA. His business was hammered during the GFC and this saw him commence an incredibly successful content marketing strategy which created generational success for his business.

2. Select, implement and adopt a CRM for your company while ‘business’ is slow and you have the spare time and capacity

Most clients we deal with talk about implementing a new CRM ‘when the time is right’. Maybe now is time to bring that CRM project forward and the inevitable teething pains are experienced during a quieter time, rather than when the economy picks up.

3. Invest in SEO - carve your place in the market for the future

Google Search still drives most of the intent-driven traffic online. Most legitimate SEO companies will tell you it takes time to properly devise and implement an SEO strategy. If you could be doing more with SEO start doing it now when competitors are cutting their search budget.

4. Review your website and run a Conversion Rate Optimisation project

Is your current website years out of date or sub-optimum? Now is the time to fix it.

The tightening economy will mean it is a more difficult fight for every dollar moving forward. For many businesses, their website is a leaky bucket losing sales on a daily basis. There might not be a better time than now to invest in that long-delayed website overhaul or conversion rate optimisation project.

5. Implement video marketing

If your business has resisted a video marketing strategy in the past, now is the time to devise and implement it. Millions of Australians are still homebound and absorbing more video content online than ever before. This is not as expensive an exercise as it used to be. In-house productions are a reality for most businesses with high-quality phone cameras and even if you decide to go with an external video company, the turn-around time and quality is almost always worth the price.

Change your messaging

This overlaps with points made above. The way you have positioned your communication and messaging pieces historically needs to change.

If the problems your customers’ experience have changed, then the value you deliver to them has also changed. This means that your marketing messaging needs to adapt. There is a conversation going on in your customers’ minds, and you need to join this at their ‘new normal’.

Our advice to clients is that they need to have messaging at a level that matches where prospects find themselves right now. Businesses have to be agile with their messaging in this changing market. This was always the case before, but given the current situation, this is the norm.

A couple of months ago this meant changing lots of core messaging to directly tie into COVID-19 as lockdowns began in Australia. We are now seeing messaging change as a different kind of normal has been established.

It is vital to be on top of this as economic conditions continue to be difficult. Review your website messaging, physical collateral, social media content and email nurture flows as needed. The way we spoke 12 months ago will need to change in many industries. Audit all crucial communications and be prepared to make changes as economic conditions do.

Re-assess how you measure success

Unfortunately, what was previously realistic in terms of sales and marketing for many businesses just won’t be for the foreseeable future. The quicker you reset strategy and KPIs the quicker you can rebuild and grow market share.

For our clients, we are encouraging a reassessment of what marketing success looks like for them. This might mean a softening on the focus for bottom of the funnel or sales return on investment and a greater focus on top-of-the-funnel consideration metrics.

Start considering the mix below to adapt near-term reporting in your business:

  • Building brand awareness;
  • Growing your database of prospects to nurture;
  • Building new sales funnels;
  • Re-assessing bottom of the funnel sales and macro conversions; or
  • A revised combination of the above.

Meet buyers in their houses

This might be a bit less based on previous recessions and more the specifics of this one, but the difficult time for the wider economy should be a boom for digital.

Fewer people in cars means fewer billboard impressions, fewer people on public transport means fewer back-of-bus eyeballs and fewer people at cinemas is a major concern for cinema advertising.

Digital channels are experiencing a boom of usage and you need to prepare for this to be structural and transformative.

Start thinking Spotify over radio, Facebook over outdoor, YouTube over TV and display ads over traditional print.
Social media marketing agency services create ads that speak directly to your ideal customer, wherever they may spend their time online.

The upcoming trading conditions have a commonality with so many recessions from the past with the added quirk of our lifestyle being changed.

Your prospective customers will still be spending more time in their homes than they were before, and your mix of marketing channels, therefore, needs to adapt to this behaviour.


Inevitably things will turn for the positive at some point in the future.

The decisions you make today with regards to your marketing strategy will directly impact your businesses market share not just for the remainder of this year but in 2021, 2022 and beyond.

If you can avoid thinking short-term in your marketing, you can expect to outperform your competitors that do.

If you’re interested in speaking to a team who can help scale your marketing investment as needed to reach your business goals then get in touch. We always love to have a chat and can be reached on 1300 059 620 or by contacting us here.

James Lawrence
Co-Founder & Director | Rocket Agency

James is co-founder of multi-award-winning Australian digital marketing agency Rocket, keynote speaker, host of Apple’s #1 Marketing Podcast, Smarter Marketer, and co-author of the 2019 Amazon Australia’s #1 best-selling marketing book of the same name. He was also a finalist in 2019 and 2020 B&T Marketer of the Year.

James’ 15-year marketing career working with more than 500 in-house marketing teams inspired the 2019 release of Smarter Marketer. It has been endorsed by marketers at some of Australia’s leading brands, including Hubspot and KPMG.

In 2022, James launched the Smarter Marketer podcast, the definitive podcast for Australian marketers. Released fortnightly, James sits down with local experts and global authorities to discuss how Australian marketers can become more successful in their careers.

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