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The Power of Digital Marketing Through Economic Uncertainty
These are major financial issues that will be part of our everyday vocab in 2022.
Inflation.
Uncertainty in the economy.
Living expenses are increasing.
Many people use Google to search for a variety of finance-related topics as they try to balance — and face challenges with — their wages or salaries.
Google’s insights team examined the most recent Google Trends to gain a better idea of what's on people's minds during these times of economic uncertainty.
Millions of high-growth search terms from Europe, the Middle East, and Africa were measured.
Here are the three conclusions:
1. Many people have financial search inquiries.
"What is inflation?" is one of the phrases that has seen a significant increase in worldwide search interest this year. The state of the global economy, as well as personal finances, is a complicated subject.
It's understandable that people have a lot of questions as they try to figure out what's going on in the world.
For example, global search interest for "why" in regards to "expensive" has increased by 20% in the last six months(1).
In addition, throughout 2022, shown an increase in search interest for sentences such as "why is butter so expensive" in the United Kingdom, "pourquoi pénurie moutarde" ("why is there a mustard shortage") in France, and "warum steigen die preise" ("why are prices rising") in Germany.
Furthermore, people are worried about the consequences of inflation on their personal finances.
They ask worldwide questions like "what can I afford?" and "kiedy stopy procentowe" ("when are the new interest rates") in Poland.
2. An unexpected relationship: saving money and saving the environment
According to the most recent Google Search trends, inflation and sustainability go toe - to - toe in some cases.
As consumers look for ways to save money, many of the more affordable options are, unsurprisingly, less harmful to the environment. Consider the rise in searches for "used" and "second-hand."
Previously, second-hand products may have had a negative stigma.
Today, the surge in app reselling tells us a different story about today's consumer's shopping habits. Another area where the sustainable solution has recently combined with the less expensive option is "energy."
People want to save money because prices have risen, and using less energy is, of course, beneficial for the environment.
According to Google Trends, global search interest in "how to save energy" spiked in 2022.
We also noticed an increase in Search interest for the phrases "hora más barata para poner la lavadora hoy" ("cheapest time to turn on the washing machine today") in Spain, "elpriser time for time" ("hour by hour electricity prices") in Denmark, and "ile prdu zuywa klimatyzacja" ("how much electricity is consumed by air conditioning") in Poland.
3. Despite all, people continue to desire (minor) luxuries.
Interest in "cheap" searches has also increased in 2022. For example, in Poland, "tanie sukienki" ("cheap dresses"), "en ucuz derin dondurucu" ("cheapest deep freezer"), and "billigt kaffe" ("cheap coffee”). There is an increase in people searching for luxury items.
In Germany, searches for "luxus sonnenbrille" ("luxury sunglasses") and "luxury underwear" ("luxury underwear") have increased. Furthermore, people are making new plans for future purchases that are not always affordable in the short term — or without some form of assistance. Search interest has grown in Italy for "incentivi auto elettriche" ("electric car incentives"), France for "subventions panneaux solaires" ("solar panel subsidies"), and the Netherlands for "subsidie warmtepomp" ("subsidy heat pump"). This data indicates that, despite the face of economic uncertainty, people are attempting to strike the right balance between "cheap" and "luxury."
They are willing to wait for — and invest in — more expensive purchases, but they are trying to find other ways to fit it into their budget.
Now the question is: How do you succeed in uncertain economic times?
Advertising and marketing are the departments that your Financial Director is likely to cut back on when cost-cutting measures are implemented, but this goes against prevailing opinion in several ways.
In other words, during a downturn, money goes further.
You gain a larger share of the market as competitors exit your market, and, of course, downturns end, and you want to emerge powerful than ever.
When the economy is uncertain, you must stay ahead of the curve by utilizing digital marketing to your advantage. It is a way to save money by lowering costly advertising costs while reaching more people with less overall spending.
As the management consulting firm McKinsey stated in their 2002 Quarterly Special Edition on Risk and Resilience, that it has been proven time and again:
“Thus, when other companies simply battened down the hatches, seeing only risk during the recession, the more successful competitors found opportunity and pressed their advantages.”
Dobbs, Richard F., et al. “Learning to love recessions”
It is important to stay on top of changing consumer preferences and behaviours in times of rapid change and uncertainty. Search trends tell us what's important to people right now: how they're feeling and what they're looking for.
To truly understand the mindset of today's financially constrained consumer, it's also necessary to look at long-term trends. This is far from the first time that inflation and economic uncertainty have weighed heavily on people's minds, and it will not be the last. Google Trends data spans 15 years, revealing long-term shifts in behaviour and demand and not just recent fluctuations.
Oh, think twice, 'cause it's another day for you…
Marketing budgets are most likely to be cut first in times of economic uncertainty, primarily because shareholders believe that spending money to make money may not be in their best interests during a recession. To demonstrate the time lag effect of advertising, the graph below shows modelled reports on real companies that cut advertising and marketing budgets - in this case for one year.
According to Data2Decisions, a pause in advertising spend can provide a misleading short-term boost in profitability, but the time lag can take several periods to recover.
It also took more than half the time to recover from half the budget.
As the world of business today continues to digitise, the importance of developing and refining your company's digital presence cannot be compromised.
Investing in digital marketing will ensure that your organization brand is well positioned to adjust, not only in the face of economic uncertainty, but also in the face of rapid changes in your industry.
Focus on one thing - Provide Value to Customers & Brands
Since we all worry about the economy and our personal finances, it's critical to provide genuine value to your customers and the business as a whole.
Consumers expect brands to be helpful, and they will place greater emphasis on companies demonstrating their value, such as through special offers and discounts.
Simultaneously, as companies, like individuals, feel the pull, advertising agencies must collaborate closely with their finance teams to ensure campaigns contribute to the bottom line. Your marketing team or digital agency should establish a common goal, such as revenue or profit.
Moreover, allocate values to various conversions to understand what you're all working toward. Just before this is in place, you can use first-party data and automated solutions to boost efficiency and deliver value for money.
In conclusion, investing smartly in digital marketing it can be the best way to stay competitive in such an evolving environment.
AI driven advertising & personalised content are a chance to invest your marketing budget wisely in 2022-2023.
Sources:
- (1) Google Internal Data, Global, July–Dec. 2021 vs. Jan.–June 2022.
- Thinkwithgoogle
- Data2Decisions.com
