Economic downturns create uncertainty and changes in user behavior that impact markets and forecasts. They also affect the approach and resources allocated to marketing activities.
Because no two recessions or economic downsturns are the same, marketers operate in uncharted waters every time one occurs.
This article can help marketers manage SEO campaigns and show the value of their efforts despite a recession, during periods of market uncertainty, or during periods when external factors greatly change your target consumer’s behaviors.
Doing business during a recession
Consumers will naturally reduce their spending during economic downtimes and establish more stringent priorities.
When sales decline, businesses begin to reduce expenses, lower prices and delay making new investments. Unfortunately, marketing expenditures are often the first to get cut. This approach to cost reduction is ineffective and should be avoided.
Clients often judge SEO and paid search as independent channels. SEO can be seen as “OK to turn off for a bit,” while a brand rests on its laurels, assuming that the current performance won’t worsen during the downturn.
But SEO isn’t the only channel that may see issues here. In 2009, the entire U.S. ad market saw a decline of 13%. This was predominantly driven by radio and magazines, which saw declines of 22% and 18%, while “online” only declined by 2%.
The argument for not reducing spending
It might be a good idea to keep costs down when entering a recession. But if you fail to support brands or examine how your core customers’ needs evolve, you will likely jeopardize your medium to longer-term performance.
Organizations and trade bodies such as the Institute of Practitioners in Advertising (IPA) refer to this as losing the “share of mind.” In the United Kingdom, the IPA has publicly advertised, warning brands not to reduce marketing spend in the months ahead.
It’s also worth highlighting that sometimes a plateau or deceleration in marketing spend can feel regressive.
In 2024, it is estimated that overall advertising spending growth in the U.S. will increase by approximately 10%. Compare this to an average growth of 23.3% prior to 2020.
These year-on-year spending patterns can be down to various reasons, including:
Market saturation: The level of investment has reached a point in which further investment would yield diminishing returns against the current consumer market.
Pricing pressures: As consumers go through times of economic uncertainty, consumer confidence and priorities in spending disposable income change. As a result, organizations look to maintain their advertising/marketing effectiveness without increasing spend.
Market consolidation: As consumers reduce spend, smaller organizations or those unable to compete effectively may exit certain markets. This often leads to fewer but stronger organizations still in the market, making it a more competitive environment with less competition for mental availability.
Reading through research papers and thought leadership content from the International Journal of Business and Social Science, Harvard Business Review and specialists from the Economist and Financial Times, five key marketing objectives for a recession begin to emerge.
Smarter spending and investment.
Retention of the existing customer base should be prioritized.
Leverage your competitor’s weaknesses.
Monitor the market and adjust spend targeting segments based on their behaviors.
Maintain your current spending at a minimum, just spend smarter.
Dig deeper: SEO for user activation, retention and community
How to keep your SEO efforts going during a downturn
The general message is “do not reduce spending.” That’s great.
But when defending our retainer or contract renewal, businesses want to know how their SEO spend will tangibly impact the bottom line.
To address this, we can look to the 2008 recession and the recent pandemic – when other businesses pivoted and changed messaging across their digital marketing.
Let’s apply the learnings to help our clients or employers power through an economic downturn without pausing their SEO efforts.
Review your TAM and messaging
A total addressable market, or TAM, can be defined in several ways.
The most common definition is the total number of people who could possibly use a product or service. For example, the TAM for a new smartphone might be the total number of people who own a cell phone.
Despite its limitations, TAM can be a helpful metric for investors to assess a company’s growth potential. Companies with large TAMs can be desirable to investors because they have the potential to generate a lot of revenue.
During a recession, businesses (in B2B) and consumers will react differently depending on their economic stability.
Depending on your TAM, you may need to pivot your messaging and value propositions. This then ties into your SEO strategy. Align activities to these messaging goals, depending on whether your product is deemed essential, luxury, postponable or expendable.
Essential products are often price-sensitive during a downturn. You may want to highlight the value proposition further for less economically stable consumers.
For those in your TAM who are better off, you should continue awareness campaigns (i.e., top and middle-of-the-funnel activities).
By comparison, luxury products can be communicated as precisely that – a luxury/treat to be consumed as a reward for austerity in other areas. They can also induce dopamine reactions and raise morale.
The other two categories, postponables and expendables, are the most difficult to pivot for.
An example of a postponable is a TV streaming service or magazine subscription. Users ahead of postponing may research cheaper alternatives to avoid missing out. During this research phase, you must be visible and fight to retain your existing users.
For other goods that can be postponed (such as servicing a vehicle, replacing a tire, or updating home security systems), messaging should focus on the long-term financial and opportunity costs of not performing these actions now and providing support messaging.
Expendable products and services will likely impact local SEO more than other sectors. Rather than hire a gardener or decorator, consumers will choose to perform the maintenance and upgrades themselves.
This is both an opportunity and a threat to sell to consumers by enabling them or working to remain visible as a company and build trust.
To do this, you need to understand the overall confidence of your target consumers.
Understanding your consumer confidence
In addition to reviewing your TAM, you need to review the confidence of consumers within your SOM (serviceable obtainable marketing) and SAM (serviceable addressable market).
Consumer confidence is a measure that gauges the optimism of households and how they feel about their financial stability at present and in the coming months.
Two common sources of this information at a macro level are the Michigan Consumer Sentiment Index (MCSI) and the Consumer Confidence Index (CCI).
When consumers are confident, disposable income is more likely to be spent on luxury, postponable and expendable products/services. When it’s low, there is a stronger focus on essential products/services.
You can collect your own data for this through surveys and engagement with your own community.
Talk to your sales team regularly. They speak with customers and potential buyers often. This can give you valuable insights into:
What frustrates your target audience.
What objections they have.
How they view their own finances.
Their perspective on your market.
These insights can help you understand your customers better, even if you can’t create your own economic index.
Smarter opportunity analysis and competitor targeting
Most businesses are focused on maintaining and retaining market position during a recession.
It’s an excellent time to identify consumers they currently hold and work to leverage them toward your products and services. Competitive targeting should be a staple of an SEO campaign anyway.
However, during a downturn, when sensitivity to price and value is heightened, your messaging and content can focus on pain points that consumers may have with competitor products and services.
Turn these into a competitive advantage to create a conversation with new prospects. You can produce competitor comparison content and highlight the competitor’s weak spots as non-issues or strengths with your product.
For example, if you’re providing a rotating proxy service and you know that your competitor, Bob’s Proxies, has issues with uptime, then make sure your content highlights that your service has no such problems.
Dig deeper: SEO SWOT analysis: How to optimize where it counts
Positioning for post-recession
SEO is a long-term strategy, but during an economic downturn, you must balance the longer term and the short term.
Typically, consumer trust and spending recover within one to two years of a recession. When consumers return to post-downturn spending levels (or establish new market norms), you want to ensure you’re prominent and visible in the vertical.
You can do so by maintaining a certain level of activity toward establishing and maintaining top-of-vertical awareness and remaining competitive for bottom-of-funnel, conversion-focused queries.
Maintaining SEO momentum during uncertain economic climates
Marketing may seem more challenging during an economic downturn. Customers’ spending habits often change, and you may have to go against your instincts.
Optimizing your budget and being strategic about your priorities is essential. This will allow you to continue marketing your products or services while meeting your customers’ needs.
A recession can be an opportunity to build customer loyalty and mental availability with your overall SAM and TAM. During a downturn, SEO can alleviate direct cost channels (such as paid) and offer long-term benefits and short-term stability.
Google and the other search engines will continuously update during this period. Competitors who remain stagnant and withdraw resources will suffer in the medium to long term, costing more in the future to regain lost performance and the opportunity cost of lost visibility.
