he world as we knew it changed as a result of the COVID-19 pandemic which caused many jobs to be lost worldwide, while other people had to adapt in an innovative and effective way. The economic recession makes companies that are still standing having to re-evaluate their budgets, including marketing.

How Do Consumers Buy Products During Recession?

When market indicators start shivering, people, and their money, run for cover. Some have been hit before and saw earnings and retirement account stake a significant hit. Additionally, bad economic forecasts erode consumers’ confidence and buying power. According to the Harvard Business Review, people prioritize the consumption of products and services into four categories:

  1. Essentials: Necessary for survival and well-being.
  2. Treats: Indulgences whose immediate purchase is considered justifiable.
  3. Postponables: Desired items whose purchase can be reasonably put off.
  4. Expendables: Perceived as unnecessary or unjustifiable.

How Do Companies Differentiate from Competitors on Their Marketing Strategy?

Companies need to highlight the importance and added value of their products to consumers to rank high on their consumption priorities. Additionally, consumers want to know what brands are doing during hard times, hence communication is vital. Consumers want to feel like brands are there for them, not just to sell them products but to support them and to walk with them through crisis, therefore it is not justifiable to cut marketing/media budgets due to a recession but instead increase them, or at least keep them untouched, as companies should not want to disappear from their customers’ radar at their worst times.

How Do Companies Improve and Measure Their Marketing Paid Search Strategy?

Companies need to choose the best course of action for paid search and other paid digital campaigns for the next 1-2 years, depending on whether their goal is to:

A. Drive sales even at the expense of profitability, or

B. Maintain a profitability margin even if it means losing out on sales.


If your main objective is the volume of sales, look at your year-over-year trends since COVID-19 started and plan accordingly. Keep in mind seasonality and calculate how many conversions/sales/revenue you want each month going forward. Then, do some quick math based on your cost per conversion and return on ad spend (ROAS) levels and find out how much money you are going to need to spend to meet those sales targets. If the money you would need to get the sales are less than the money you would get by making those sales, then is profitable, even if the profit is lower than what it used to be before COVID-19.


If your main goal is profitability, look at your year-over-year trends since COVID-19 started and plan accordingly. Keep in mind seasonality and calculate how much money you are going to need to spend in order to achieve your planned ROAs and ROIs. Most likely some of your campaigns will not make sense anymore because of increased costs of goods sold (COGS) due to everything that is going on, so you can cut some of these budgets and reinvest into more effective and cheaper already-in-progress sales channels/efforts so your profit is not compromised. This strategy to maintain a certain profit margin will likely result in less overall revenue and return for your business. The goal here is to stay profitable enough so you do not have to make significant cuts. Sacrifice what is needed in paid digital advertising to stay afloat and viable during the economic downturn...

The Message You Should Take Home:

Remember we are all in the middle of great uncertainty. You may end up having to forecast and make lots of predictions frequently in the next couple of years due to a fluctuating economy and changing circumstances. Be flexible and cautious as the economy keeps crawling its way back to normal.

Not feeling like having to deal with all of this? At Sigma Ridge we make things easy and painless for you! Our data scientists and engineers can take the weight off your shoulders while providing professional and transparent consultancy services so you can go back to your priorities while we take care of the not so appealing hard work. Book a free no commitment exploratory call with us at a time that works for you and join the group of happy clients to whom we made their lives a little less busy and more enjoyable!

  • https://moz.com/blog/adjusting-paid-campaigns-during-recession
  • https://www.mni.com/blog/research/how-advertising-during-a-recession-can-preserve-your-brand/article_f8f13d4e-d56e-11e9-be80-d76025819b6f.html


More from 



View All