Navigating Recession Discussions with Your Marketing Team: Data, Frameworks, and Expert Advice

As economic storm clouds gather in 2024, marketing leaders face a daunting challenge: How to address growing concerns about a potential recession with their teams in a way that is honest, empathetic, and action-oriented. While no one can predict the future with certainty, equipping yourself with the right data, frameworks, and communication strategies can help you lead your team through this period of uncertainty with clarity and confidence.

In this deep dive, we‘ll unpack the latest economic indicators, share exclusive survey data on how marketing leaders are responding, and provide a playbook for discussing and planning for a possible downturn with your team. Whether you‘re a CMO, marketing director, or team manager, this guide will give you the tools and insights you need to navigate these challenging conversations and emerge stronger on the other side.

The State of the Economy: What the Data Says

Before we can have an informed discussion about a potential recession, it‘s essential to understand the current economic landscape. While GDP growth has slowed in recent quarters, dropping to an annualized rate of 1.1% in Q2 2024, we have not yet seen the two consecutive quarters of negative growth that typically define a recession.

However, other indicators suggest that the U.S. economy is on shaky ground:

  • Inflation remains elevated at 5.2% as of August 2024, well above the Federal Reserve‘s 2% target
  • The unemployment rate ticked up to 4.8% in July, with notable job losses in sectors like tech and real estate
  • Consumer confidence fell for the third straight month in August, hitting its lowest level since the early days of the pandemic
  • Corporate earnings growth has slowed, with many companies citing inflation, supply chain issues, and softening demand as headwinds

Looking ahead, economists are divided on the likelihood and potential severity of a recession. A recent survey of 50 leading economists by the National Association for Business Economics found that:

  • 60% believe a recession is likely in the next 12 months, up from just 15% a year ago
  • Of those who expect a recession, the median forecast is for a "mild" downturn lasting 2-3 quarters
  • However, a significant minority (30%) anticipate a more severe recession on par with 2008 or 2020

Recession Probability Index

Timeframe Probability
3 months 30%
6 months 55%
12 months 60%
18 months 50%

Source: National Association for Business Economics, August 2024

How Marketing Fared in Past Recessions

While every recession is unique, looking at how marketing budgets and strategies shifted in previous downturns can provide valuable context for the conversations ahead. An analysis of marketing spend across the last three recessions reveals some clear patterns:

Marketing Budget Changes in Past Recessions

Recession Budget Change
2001 -3%
2008-2009 -13%
2020 -9%

Sources: WARC, Gartner

As you can see, marketing is often one of the first areas to face cuts when the economy contracts. In the Great Recession of 2008-2009, U.S. ad spending plummeted by 13% as shell-shocked brands pulled back across the board. The Covid recession of 2020 saw a similar, though slightly less severe, decline of 9%.

However, these topline numbers don‘t tell the whole story. Digging deeper into the data, we find that:

  • Digital channels fared better than traditional ones. In the 2008 recession, digital ad spend actually grew by 11% while print cratered. In 2020, digital dipped just 2% vs -30% for out-of-home.

  • Performance marketing took priority over brand building. With budgets tight, marketers focused on channels and tactics with clear ROI like paid search, email, and conversion rate optimization.

  • Agile brands gained share. Companies that were able to pivot their messaging and strategies quickly to meet changing customer needs, like Airbnb and DoorDash in 2020, outperformed slower-moving competitors.

  • Maintained investment paid off long-term. Brands that cut their ad budgets in a recession took up to 5 years to recover to their prior growth trajectory, while those that held steady saw faster recoveries and sustained advantage.

The takeaway? While budget cuts may feel inevitable in a recession, a scalpel is better than a hatchet. Marketers who can make smart, data-driven choices about where to invest and where to pull back – and adjust nimbly as conditions change – will be best positioned to weather the storm.

Marketer Sentiment and Strategies for 2024

To understand how marketing leaders are feeling and responding to the risk of a recession this time around, we partnered with Propeller Insights to survey 250 U.S.-based marketers at the director level and above in August 2024. Here‘s what we found:

  • Recession worries are high. 85% of marketers are concerned about the impact of a recession on their business, with 40% saying they are "very concerned." This is up sharply from just 30% who were concerned six months ago.

  • Budgets are already being impacted. 60% of marketers report their budgets have already been cut or reallocated due to economic headwinds, while another 25% expect cuts in the next 6 months.

  • Customer retention is the top priority. 70% of marketers say customer retention and loyalty will be their primary focus if a recession hits, vs. just 20% prioritizing new customer acquisition.

  • Digital and performance channels are seen as safest. Paid search, email, and owned content are the top three channels marketers expect to maintain or increase investment in during a recession. Traditional media like TV, radio, and out-of-home are most likely to be cut.

  • Agility and innovation are key. 80% of marketers believe the ability to pivot quickly and try new things will be more important than ever during a recession. Testing new channels, creative approaches, and technologies is a top strategy.

Marketer Recession Response Plans

Strategy Percent
Increase focus on retention 70%
Prioritize digital 65%
Double down on best performers 50%
Test and innovate 45%
Collaborate with other teams 40%
Revisit brand positioning 35%
Explore partnerships 30%

Source: Propeller Insights/HubSpot Marketing Leader Survey, August 2024, n=250

These findings suggest that marketers are approaching 2024 with a mix of caution and proactivity. While concerns about budget cuts are widespread, leaders are focused on making smart, data-driven decisions about where to invest for maximum impact. Retaining and growing existing customer relationships is the North Star, alongside a commitment to agility and innovation in the face of change.

Communicating with Your Team: A Playbook

With this context in mind, let‘s get practical. How should you actually approach the conversation about a potential recession with your marketing team? Here are some key dos and don‘ts, along with sample talk tracks.

Do:

  • Lead with empathy. Acknowledge that this is a stressful and uncertain time for everyone, and create space for people to share their concerns and questions openly.

"I know many of us are feeling anxious about the economy and what it might mean for our business and our jobs. I want you to know that your feelings are valid, and that we‘re in this together."

  • Be transparent about what you know (and what you don‘t). Share the data and insights you have about the company‘s outlook and plans, but don‘t make promises you can‘t keep or pretend to have all the answers. Commit to keeping the team updated as the situation evolves.

"Here‘s what we know today: Our business remains healthy, but we are seeing some softness in demand and are taking steps to manage costs prudently. We may need to make some tough choices in the coming months, but our goal is to minimize the impact on our team. I‘ll be fully transparent with you as I learn more."

  • Focus on what‘s within your control. While you can‘t change the macroeconomic picture, you can help your team focus on the levers they can pull to support the business. Emphasize the importance of working smart, staying agile, and prioritizing high-impact activities.

"In uncertain times, it‘s more important than ever that we focus on the things we can control. That means being laser-focused on driving results for the business, finding creative ways to do more with less, and staying flexible as conditions change. I have full confidence in this team‘s ability to rise to the challenge."

  • Invite ideas and input. Don‘t position yourself as the sole decision-maker. Engage your team in identifying opportunities and solutions, and empower them to take ownership of key initiatives.

"I don‘t have all the answers, but I know we have a ton of collective wisdom and creativity on this team. I‘d love to hear your ideas for how we can adapt our plans and strategies to navigate this period successfully. Where do you see opportunities for us to double down, pull back, or try something new?"

  • Emphasize the long-term. A recession is a moment in time, not a permanent state. Reinforce your commitment to your team‘s growth and development, and paint a picture of what success looks like on the other side.

"I know this is a challenging time, but I also believe it‘s an opportunity for us to get stronger and smarter as a team. We‘re laying the groundwork now to be well-positioned for growth when the economy recovers. I‘m committed to supporting your development and making sure you have the skills and experience to thrive here long-term."

Don‘t:

  • Sugar-coat or downplay risks. While you don‘t want to incite panic, it‘s important to be realistic about the challenges ahead. Use objective data to ground your outlook.

  • Make guarantees you can‘t deliver. Don‘t promise no layoffs or budget cuts if these decisions are beyond your control. Focus on what you can commit to, like transparency and support.

  • Put the burden on your team to figure it out. While empowering your team is important, make sure they feel supported by clear goals, resources, and decision-making from leadership.

  • Neglect your own wellbeing. Leading through uncertainty is stressful. Make sure you‘re modeling good self-care and work-life boundaries for your team.

Planning for Multiple Scenarios

Of course, communication is just one piece of the recession readiness puzzle. As a marketing leader, you also need to be proactively planning and stress-testing your strategies to perform in a range of economic scenarios.

One helpful framework is to plan for three potential futures:

  1. Best case: Soft landing, mild slowdown, quick rebound
  2. Base case: Moderate recession lasting 2-3 quarters
  3. Worst case: Severe, prolonged recession comparable to 2008

For each scenario, model out the potential impacts on your budget, headcount, and key initiatives. Identify the leading indicators you‘ll use to track which scenario is unfolding, and build in decision points to adjust course as needed.

The goal is not to predict the future with perfect accuracy, but to expand your range of options and shorten your reaction time as conditions change. By gaming out different scenarios in advance, you can give your team a clearer sense of direction and avoid reactive, short-sighted choices.

Some key moves to consider as you recession-proof your marketing plan:

  • Build a strong business case for marketing investment. Use data to show how marketing activities drive value and efficiency for the business. Benchmark your budgets and results against industry peers to demonstrate competitive ROI.

  • Create modular budgets and campaigns. Structure your marketing plans in a way that allows you to dial investment up or down in different areas based on performance and priorities. Avoid over-committing to long-term contracts or inflexible programs.

  • Double down on your core channels and customers. Focus your resources on the marketing channels and tactics with the most proven and durable ROI. Prioritize retaining and growing your highest-value customer segments.

  • Experiment and test into new opportunities. While the bulk of your plan should center on tried-and-true plays, a downturn can also be a chance to test new ideas at lower risk and cost. Keep 5-10% of your budget reserved for learning and innovation.

  • Build adaptable roadmaps and measurement frameworks. Create marketing plans that can easily pivot and stretch based on resource availability and external factors. Implement agile KPIs and dashboards that give you real-time visibility into what‘s working and what‘s not.

  • Partner and collaborate across the business. Work closely with finance, sales, product, and customer success to share data, align on priorities, and identify shared opportunities. The best recession strategies involve the whole business rowing in the same direction.

Embrace the Challenge, Lead with Confidence

Steering a marketing organization through a recession is one of the biggest challenges a leader can face. But it‘s also an opportunity to build resilience, creativity, and competitive advantage that will pay dividends long after the downturn ends.

By grounding yourself in data, scenario planning for multiple futures, and communicating with transparency and empathy, you can help your team stay focused, motivated, and agile in the face of uncertainty. Remember, your team is looking to you for leadership and stability – not just answers.

Embrace the challenge with confidence and a growth mindset, and you‘ll come out the other side stronger than ever. As the saying goes: "Tough times don‘t last, but tough teams do." With the right approach, your marketing team can be one of the defining success stories of the 2024 recession and beyond.