By Preety Singh
Influencer marketing witnessed remarkable growth in 2022, with brands seeking out creators in large numbers to help them better communicate with wider audiences, especially young consumers. However, due to the impending recession, many brands are cutting their marketing budgets and, subsequently, their expenditure on influencer marketing.
Consumer spending is declining as inflation increases, and a recession looms. However, as economic uncertainty grows, influencer marketing will continue to be a key differentiator for brands. The Indian industry is estimated to grow at a CAGR of 25% through 2026, reaching worth INR 2,800 crores.
Regardless of the state of the economy, brands should continue to make substantial investments in marketing. An adage goes, “When times are good, advertise; when times are bad, you must advertise.”
How can brands gear up?
Recessions create great possibilities for brands that are well-positioned to take advantage of them. Understanding and meeting their consumers’ changing demands during a recession allows firms to gain market share, expand profit margins, and position themselves for rapid growth once the economy rebounds. All it takes is a little prediction and proper planning from the brands’ end.
Here are some strategies for preparing your brand for the impending recession and ensuring that it survives and outperforms its competitors.
Brands should continue investing in marketing
While cutting the marketing budget amid a recession may help protect short-term profitability, the brand will undoubtedly be weaker and less profitable after the crisis. Brands that increase marketing spending to gain a larger share of voice over competitors are best positioned to achieve long-term profitability through the recession and beyond.
For example, from doubling up on advertising to developing new products, Amazon built strategies for navigating through the 90s crisis. By planning ahead and creating a financial buffer, the company was able to continue moving forward, despite the stock price meltdown. Microsoft, Netflix, Apple, and many other businesses are examples of firms that have thrived amidst the crisis. Another example is The Womb’s IGP.com Diwali campaign, which aimed to lift the nation’s mood during the festive season, despite the economic downturn. The campaign talked about spreading positivity by communicating that, no matter the economic situation, gifts always bring a smile, spread cheer, and lift spirits.
Influencer marketing as an investment
Influencer marketing is becoming more powerful and efficient every day. Even on a limited budget, digital campaigns allow businesses to micro-target their brand’s most valued audiences. Marketing is one of the last things brands should consider cutting down on when times are tough because of its ability to impact buying behaviour by providing hyper-relevant brand messaging directly to individual consumers. Moreover, brands can eliminate unnecessary expenses and reallocate funds to effective marketing strategies such as influencer marketing. Influencer marketing has been used in 93% of marketing campaigns and is now considered an important advertising strategy.
Furthermore, brands should focus on building trust with their target audience. Consumer trust is essential as consumers try to be more frugal with their money and do not want to spend on low-quality products. However, they trust their favourite influencers and rely on them for product recommendations. Brands can explore collaborating with nano and micro-influencers when looking for niche creators to help them sustain brand trust. They have close-knit communities and higher consumer trust.
Influencers can help brands expand their audience and engage with the younger generations (millennials and gen Z) as they are the most active online shoppers. Additionally, storytelling and tailoring brand messaging according to the needs of the consumers can be an added benefit for brands to capture a wider audience.
Recessions create market upheavals that no brand can foresee. It is essential to make smart business decisions during unfavourable times so that brands can earn profits from the downturn better than their competitors. Influencer marketing is a tried-and-true approach to incorporate into the business strategy during a recession. By partnering with creators, businesses can increase brand visibility, trust, and value among consumers, allowing them to withstand the storm of bad economic conditions and eventually boosting their sales and Return on Investment (ROI).
The author is the co-founder and managing director of Boomlet Media