While the likelihood and severity of any disruption remains unclear and widely debated (with an anticipated $20 billion slash in ad spend), many advertisers will be preparing contingency plans and seeking clarity on how best to respond.
The phrase “Don’t go dark” has, for several years, served as a kind of security blanket for marketers navigating economic downturns and/or industry upheaval. It is rooted in long-standing evidence, notably from the IPA and the work of Binet and Field, that brands maintaining investment during periods of economic instability tend to recover faster and grow share in the long term. However, while directionally sound, the phrase is now insufficient. It is too blunt for a market environment marked by category fragmentation, uneven macroeconomic impacts, and varying recovery trajectories.
Businesses need to opt for a more refined solution – such as the one analyzed by Magic Numbers (in collaboration with the IPA). The analysis of over 500 econometric case studies reveals that recession-era effectiveness varies widely by sector, and that advertising strategies must be adapted accordingly. Simply repeating historic axioms is unlikely to yield optimal results.
A More Nuanced Framework: Beyond Binary Advice
The decision to maintain, increase, or reduce advertising investment in a downturn is rarely binary. It requires an understanding of three interrelated factors:
- The trajectory of the category (both current and projected)
- The relative value of media inventory (particularly as competitors retreat)
- The capacity for payback within the planning horizon
Without reference to these dimensions, advertising becomes reactive rather than strategic.
Three Strategic Archetypes: A Sector-Based Typology
The Magic Numbers framework suggests a more contextually appropriate segmentation of advertisers into three downturn response archetypes:
Beneficiary Sectors
These are categories that either benefit directly from macroeconomic disruption or are structurally positioned to thrive under changing behavioral conditions.
During the COVID-19 recession, this included e-commerce, home entertainment, digital learning, and connected fitness. These sectors were not merely resilient, they were accelerated by shifts in consumer habits, logistical models, and forced adoption.
In more conventional slowdowns (i.e. those driven by inflation or interest rate shocks rather than lockdowns), beneficiary sectors typically include:
- Discounters and value-led retail propositions
- DIY and home improvement
- Certain FMCG categories with inelastic demand
- Digital finance tools and low-cost leisure
It is important to distinguish this from rebound beneficiaries, which include sectors like international travel, hospitality, and live entertainment. These categories suffered greatly during COVID but experienced exceptional post-pandemic recovery due to accumulated savings and deferred demand. In that context, their strategic window for increased advertising came after the recession, not during it.
Secure Sectors
These are categories where demand remains stable or only marginally affected. Their primary advantage lies in the relative cost of media. As competitors reduce spend, secure brands have the opportunity to acquire mental availability at a discount.
During the COVID recession, FMCG was a textbook example. Brands in this category largely preserved their investment levels and saw improved returns as a result.
Secure brands also maintained a broad media mix (averaging five distinct channels), which enabled continuity across both brand-building and activation disciplines.
The strategic imperative for secure sectors is not necessarily to increase spend dramatically but to ensure that reductions, if any, are proportionate, deliberate, and do not create brand erosion.
It is also worth noting that many brands do not necessarily reduce overall budgets, but reallocate. Shifts may be made from high-cost brand channels to placements with more immediate performance and apparent accountability, such as retail media, search, and social. In some cases, this reallocation is influenced by internal pressures to tie investment more directly to revenue outcomes. This is not always an appropriate course of action, and one that requires careful navigation. Informed, tactical investments are key – and we should not lose sight of the importance of mental availability here, and understanding how to maximize the efficiency of marketing budget.
Victim Sectors
These are the categories most exposed to negative economic forces. Their challenges may include falling demand, constrained discretionary spending, supply chain disruption, or sectoral contraction. Furniture, live events, and food delivery services are examples identified during the COVID period.
In these cases, the standard advice to maintain advertising may be financially unjustifiable. As Grace Kite notes, “Only buy the dip if you’re going to get the bounce.”
The relevant calculation is whether incremental share gained during the downturn is worth the cost, particularly when the category itself is shrinking. In some cases, continued advertising may result in a larger slice of a permanently smaller pie.
This does not mean all investment must stop. However, it does demand rigorous modelling. If payback cannot be achieved within a reasonable window, and survival itself is in question, then preserving cash may be the most strategic option available.
Strategic Missteps: The Lure of Activation Efficiency
In response to economic uncertainty, many advertisers instinctively shift investment toward lower-funnel activation. The rationale is superficially logical: target only those already in-market and demonstrate efficiency through platform metrics.
However, this approach often creates a false sense of precision. As John Dawes’ 95:5 rule makes clear, the vast majority of buyers (~95%) are not in-market at any given time. Over-indexing to the visible 5% may yield diminishing returns and cannibalize long-term growth.
An illustrative case: A brand reallocating 80% of budget to performance media ends up spending ~76x more per in-market buyer than on future buyers. This imbalance rarely produces efficient or sustainable outcomes.
Moreover, the belief that demand can be “created” through sheer force of “performance” advertising is inconsistent with observed purchase behavior. Most advertising works not by generating immediate action but by creating mental availability for future need states.
Messaging in Times of Uncertainty
Economic slowdowns may not only change how media money is allocated, they also shape what kind of messaging is required.
There is often a shift toward clarity, assurance, and utility. In some sectors, this means focusing on price or value; in others, it may mean promoting long-term outcomes, durability, or essential benefits. Brands may seek to recalibrate their creative strategy around trust, reliability, or competence.
Messaging may also become more selective, with priority given to products that address heightened consumer sensitivity whether through cost, usefulness, or relevance to the moment. Tone can become a useful lever: effectiveness depends not just on what is said, but on how well it reflects the prevailing mindset.
Amidst these shifts, the principles of sound creativity should not be lost. Distinctive brand assets, association with category entry points and needs, emotional cues should dominate, particularly where the audience are largely not buying today. Consumers, for the most part, are still indifferent about your long list of rational proof points.
A Note on Measurement
Effective strategy in a downturn requires measurement frameworks that distinguish correlation from causation and short-term lift from long-term value.
Where possible:
- Deploy econometrics to isolate the effect of advertising across channels
- Use incrementality testing to validate platform performance claims
- Supplement with leading indicators such as Share of Search to track brand momentum
Advertising must be treated as a portfolio of financial investments, each with varying risk, return, and time to maturity.
How to Outperform Despite Uncertainty
The objective in a dip is not to appear bold, but to act rationally. Some brands should invest aggressively, others defensively. For some, the optimal strategy may be to withdraw temporarily and preserve the runway. Throughout all of this – agility and control is key.
There is no single answer. But there is a right question: Given our category, our margin structure, and our competitive set, what does the evidence suggest we do next?
To outperform is to understand how the situation relates to your business – and if your current approach enables you to build a competitive, and sustainable future.
To navigate complexity with confidence and deliver results that outperform, fill in the form below, and let Incubeta turn your marketing into an unstoppable force of growth:
