A Case for Continued Ad Spending During a Recession

You’ve no doubt heard the doom-and-gloom around the predicted economic downturn headed our way. Financial guru and prognosticator Jamie Dimon has been leading the chorus, predicting an almost-certain U.S. recession in the next six to nine months.

We’ve been here before, just a few short years ago. In 2020, the U.S. experienced its worst recession since the Great Depression. You may have blocked this out, but recall that in March 2020, the Federal Reserve lowered fund rates to virtually 0%. The U.S. economy shrunk a record 31.2% in the second quarter after falling 1.5% the previous year, prompting stock markets to plummet.

In April 2020, our country saw 20.5 million jobs disappear, ratcheting the unemployment rate up to 14.7% — and it stayed in the double digits for months. All of which compelled the U.S. Congress to come to the rescue with billions of dollars in aid. And while the economy did rebound — with 33.8% growth — in the third quarter, it wasn’t enough to fully recover from the tremendous hit it had already taken.

When confronted the threat of another recession, businesses naturally respond by tightening belts and slashing budgets — including their marketing budgets. They certainly did just that during the Great Recession of 2008, when the U.S. ad market declined by 13% as businesses reduced their ad spends. All indications point to companies doing the same this time around.

However, for performance-based advertisers there is hope.

Click here to continue by visiting River Direct’s blog post on direct-to-consumer (D2C) marketing during a recession.