RECESSIONS ARE NOT NECESSARILY BAD NEWS FOR ALL TV ADVERTISERS
Updated: Jan 27
The constant barrage of bad news from both government and all areas of the media leads to the unwelcome conclusion for UK based companies that a deep and potentially lengthy economic recession has already started.
Many high street retailers exhibited extreme caution this year in wholesale stock ordering for the key final ‘Golden Quarter’. Added to this Amazon reported a quarterly loss in October (the first since 2015) coupled with several recent significant high-profile casualties in Eve Sleep and Made.com. Marketing budgets for brand TV advertising are being materially cut in the future as companies brace themselves for a potentially bumpy road into 2023, and beyond.
The future, however, is not dark for all marketers as a recessionary environment has typically been kind to those brands, products and services that rely on direct response marketing as a means to drive their profitable sales and market share.
The consumer during tough economic times typically cuts back on discretionary spending for entertainment and spends significantly more time watching TV at home. This change in behaviour coupled with brands cutting back on their marketing spends in TV then drives the cost of TV airtime down for advertisers.
The increase in online purchasing behaviour and engagement – which grew dramatically during the pandemic years of 2020-2021 – will create a perfect storm and welcome opportunity for direct response TV (DRTV) advertisers in the coming months in the UK.
Previous recessions, including after the global financial crash in 2008, teaches those in the DRTV advertising industry two pertinent commercial lessons:
1. There is a significant opportunity for those brands who are willing to embrace direct marketing and take commercial advantage of the soft TV airtime market during recessions. 2. DRTV advertisers due to the inherent supply/demand dynamics of TV airtime pricing and change in consumer behaviour prosper during challenging macroeconomic times.
With the assistance of lower media costs, DRTV planning/buying and campaign optimisation the future can indeed be bright…