PR during a recession with Jason Mudd

On Top of PR podcast: PR through a recession with show host Jason Mudd episode graphic

In this solocast, host Jason Mudd describes why it’s important to continue to invest in PR during a recession and provides ways to keep your company in consumers’ minds.

Tune in to learn more!

Watch the episode here

5 things you’ll learn during the full episode:

What a recession is
Why it's important to keep investing in PR
Ways to stay in your consumers’ minds during a recession
How PR is an investment
How a dip in the economic market can create opportunities for your company

Resources

Listen to more episodes of the On Top of PR podcast
Find out more about Axia Public Relations
Find Jason Mudd on Twitter
Connect and learn more about Jason Mudd on LinkedIn
Additional Resources:

Additional Resources from Axia Public Relations:

Highlights

[00:55] Threat of a recession

Jason: “Whenever a downturn occurs, leaders and managers are asked to do more with less.”

[03:07] What is a recession?

Recession has an evolving definition.

Jason: “A recession is a significant, widespread, and prolonged downturn in economic activity, which is a general rule of thumb that economists use for two consecutive quarters of negative GDP.”

Rising cost of living and interest rates puts pressure on American households. This can those households will spend less, which can lead to a recession.

[04:19] How do brands prepare for a recession?

Fifty-four percent of brands that maintained or increased marketing budgets during financial pressure saw a return on investment improve on their investment and advertising PR marketing-type activities.
With media spending, brands that boost their investment can see a 17% increase in sales than what they saw in good economic times.
As inflation grows, prices rise across the board and open corporate communications become critical.
Harvard Business Review concluded that the most efficient way to maximize customer value is by connecting on an emotional level. And so conveying bad news is never easy, but if you stay active, you know, that's the best way to continue to be part of the conversation.

Jason: “Conveying bad news is never easy, but corporate communications teams can still make lemonade out of the lemons to build trust and brand loyalty with current, empathetic messages during a crisis. For example, we're in this together, or we're going to help you through it, or we understand that you're having a difficult time.”

Jason: “So the bottom line is don't take a downturn as an opportunity to bury your head in the sand. Because you know what happens if you bury your head in the sand – you show your rear.”

Research shows companies that continue PR and marketing efforts during a crisis perform better in the long run.

Jason: “The key part I think is the ROI and public relations means relying on data-driven insights to deliver unforgettable brand experiences that the audience never forgets and will remember you and your company during the difficult time, as we go into a more positive economic environment.”

Jason: “WARC looked at thousands of case studies and definitively were able to illustrate that investments in creativity generate long-term, positive impacts on the health of the company.”

To plant a seed in the marketplace during a recession, you should focus on content marketing, your social media, your search engine optimization, your media relations, speaking in front of the industry, and winning awards for your company.

[10:44] Top lessons from this episode

PR is an investment.
PR is not overnight or fast. PR is not like advertising in that way.
Building a reputation through PR is done in patience.
Investing, a steady, measured approach is the best strategy for long-term brand growth.
A dip in the markets creates buy opportunities, downturns represent a unique and powerful moment to connect with the audience on a deeply personal level and submit the gains over the competitors who go dark during bad economic times.
You should continue to invest in PR, even in uncertain economic times.

About Jason Mudd

Jason Mudd is a trusted adviser and dynamic strategist for some of America’s most admired brands and fastest-growing companies. Since 1994, he’s worked with American Airlines, Budweiser, Dave & Buster’s, H&R Block, Hilton, HP, Miller Lite, New York Life, Pizza Hut, Southern Comfort, and Verizon. He founded Axia Public Relations in July 2002. Forbes named Axia as one of America’s Best PR Agencies.

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Transcript

- [Narrator] Welcome to On Top of PR with Jason Mudd, presented by ReviewMaxer.

- Hello, and welcome to On Top of PR. I'm your host, Jason Mudd, with Axia Public Relations. I'm glad to be here today with you. Today is a solocast, which means it's you and me. There isn't a guest this episode, but there will be a guest in the next episode. But every first and fifth episode, every fifth episode, basically, we do what's called a solocast where I'm sharing with you some of my thoughts and advice and expertise based on my experience. And so this is a unique episode, and I'm excited to do that with you today. What we're talking about is actually what happens to companies that cut back on public relations and marketing during a recession. Obviously, this is a very timely topic. We are recording this on Nov. 16, 2022. There is a threat of a recession looming. In fact, Bloomberg economics model shows that a recession is 100% likely to happen in the next 12 months. Despite some early headlines of negative economic environment going on, there certainly have been some very positive economic headlines recently.

Some have said we're already in a recession. Some have said that a recession hasn't started yet. Some are saying that there may not even be a recession. But we're here and now, and I just want to spend some time kind of talking through to you what happens to companies that cut back on public relations and marketing during a recession. Whether you are currently working with an agency, considering working with an agency, or maybe you're doing everything in-house, I'm just simply here to guide you, guard you, and advise you of what's around the corner, and how you might prepare yourself for a possible recession so that your budgets don't get slashed, and you don't lose progress on the work that you're doing today, and the efforts and programs that you have in place. Because history shows that cutting PR spending in a downturn can be bad business and bad for business. So whenever a downturn occurs, leaders and managers are asked to do more with less. And it's just the reality of business, as difficult as that might be. So for many teams, they may be experiencing quick growth, or they may be experiencing slight growth, and then they're asking to cut staff and cut budgets as well to prepare for winter or a difficult economic environment.

What I want to do instead is just talk about some of the historical efforts, excuse me, evidence that companies should maintain their efforts despite a downturn and grow more, not just go dark. And so we're going to provide you with some resources in the episode notes to help you with this. But the key thing I want to talk about is you can look at historic recessions and PR spending. But first, let's define what a recession is. And it's kind of evolving – if I'm going to be candid with you – because there used to be a time where we were very focused on GDP, but we've moved our economy from being a production economy to being more of an intellectual economy. And so, you know, the U.S. isn't exporting goods as much as it used to. We've moved more away from more of a production economy and more to a service economy. But a recession is definitely a significant, widespread, and prolonged downturn in economic activity, which is a general rule of thumb that economists use for two consecutive quarters of negative GDP. What's currently happening in 2020 is a cost of living crisis. And there's some debate among economists whether or not that is an automatic indicator of a recession. But we know the cost of living is rising, and so are interest rates for the first time in many, many years. And so that's putting a lot of pressure on the American household and the American consumer. And they may have to just spend less, which ultimately can trigger less economic activity in the marketplace.

So how do brands prepare? So with the economic threat looming, how do brands prepare? We'll answer that by looking at the last recession to see what happens to companies that decrease PR and marketing in a downturn. So what we're going to do is look at data from Analytics Partners. And there'll be a link in the episode notes to this. But they published a report called "Why advertisers need to keep spending in a recession, and other effectiveness insights." What they reported was 54% of brands that maintained or increased marketing budgets during financial pressure saw a return on investment improve on their investment and advertising PR marketing-type activities. With media spending, brands that boost their investment can see a 17% increase in sales than what they saw in good economic times. And if you think about it, if all your other competitors are pausing or freezing or going dark, and you're staying active and visible, that's just going to increase the visibility awareness in the marketplace that you're enjoying, while everyone else is going dark. As inflation grows, prices rise across the board and open corporate communications becomes critical. Harvard Business Review concluded that the most efficient way to maximize customer value is by connecting on an emotional level. And so conveying bad news is never easy, but if you stay active, you know, that's the best way to continue to be part of the conversation. A good way to build trust. A good way to build a relationship with the audience.

Conveying bad news is never easy, but corporate communications teams can still make lemonade out of the lemons to build trust and brand loyalty with current, empathetic messages during a crisis. For example, we're in this together, or we're going to help you through it, or we understand that you're having a difficult time. During COVID-19, advertisers had to change on a dime, had to pivot to ensure messages seemed relevant to the current state of the environment, to the economic environment, the health environment that we were going through. I mentioned that because here we are just, you know, two years later, when all of that is very fresh, and we learned how to do that. So the bottom line is don't take a downturn as an opportunity to bury your head in the sand. Because you know what happens if you bury your head in the sand – you show your rear. But you have an opportunity, instead. Based on research, companies that keep up PR and marketing efforts during a crisis perform better in the long run. So resist going dark, and if need be, you know, communicate through the economic climate and economic crisis. There's an organization called WARC, W-A-R-C. The WARC Group did a study, and global marketing data and analytics company is what they do, and one of the top priorities during a downturn is to resist going dark, they reported. And again, we'll provide links to this in the episode notes, but the investment in communications should be positioned as a way to strengthen pricing power now, and also prepare for an eventual recovery. Because how are you going to know when there is recovery? How are you going to know to start turning budgets back on? By the time you realize that it's time to turn budgets back on, you're going to be reacting to the marketplace that's already started to grow and expand. And you may have missed your opportunity. Meanwhile, your competitors have gotten a leg up on you. And so the key part I think is the ROI and public relations means relying on data-driven insights to deliver unforgettable brand experiences that the audience never forgets and will remember you and your company during the difficult time, as we go into a more positive economic environment. And so if you think of it, as a consumer, or a client, if you're B2B, might be aspiring to do business with you and wanting to do business with you, but they just can't right now. So they may write down, I don't know about you, but I keep a list. Here are things that I want to purchase in the future.

Here are services I want to acquire for my company in the future. And I maintain that list. And so if you could get your brand name on that list during a difficult economic time, they aspire to buy from you when they're able to, then you have top-of-mind brand recognition and awareness that perhaps your competitors who go dark will not have. Also, WARC had another group report they put out: "How can I justify the financial value of marketing investments to the board?" And so we'll provide a link to that as well. Now, some of this may require a subscription to be able to read it. Maybe this will be behind a paywall. But we'll still provide the link, and you can make a decision if you want to purchase it or not. But they looked at thousands of case studies and definitively were able to illustrate that investments in creativity generate long-term, positive impacts on the health of the company. Investments in creative include, you know, advertising, marketing, PR, and those types of activities. And so if I was you, sitting in your shoes at a corporation, and budgets were looking like they were being slashed or cut, or there's cuts around the corner, I would really fight hard for, you know, making a case and using this material that I'm bringing to you and this insight that I'm sharing. Making a case for why you should keep PR going, why you should keep the marketing programs going. Your content marketing, your social media, your search engine optimization, your media relations, getting out and speaking in front of industry, and winning awards on behalf of the company. Those types of activities will help you plant a seed in the marketplace. And we've talked before about having a funnel of awareness, trust, consideration, and decision. You want to make sure you're keeping buyers in that funnel. You're building trust with them. Even if they can't make a purchasing decision right now, you want to stay in front of them and continue to remind them of the value of what your company's offering.

So these are some of the lessons learned based on, you know, my reading of the environment and the economy and business. I've been doing this for 20 years. I've advised many companies during that 20 years, including some of America's fastest-growing and most admired brands. So perhaps the most important lessons here today is helping you understand that PR is an investment and it's in the long haul. PR is not instant and overnight. It's not like advertising where you buy a big, splashy Super Bowl ad and everybody sees it, but then the next day they forget it. PR is about building a brand over the long term. As Warren Buffet says, you know, "It takes 20 years to build a reputation." You might say, "Gosh, I don't have 20 years to build a reputation." So let's use PR to build it as quickly as possible, but understand that it's done in patience. So like investing, a steady, measured approach is the best strategy for long-term brand growth. Like a dip in the markets create buy opportunities, downturns represent a unique and powerful moment to connect with the audience on a deeply personal level and submit the gains over the competitors who go dark during bad economic times. So history shows us the fruit of continuing to invest in PR and marketing and rough times, and it can be a lightning rod for future growth

So if this was interesting to you, I'm going to share these reports in the episode notes. I hope you appreciate this information. Spend some time reading it, talk about it with your team, bring it up to your leadership team. And we're also going to provide a link to one of the books that I've wrote called "Maximizing Your Public Relations Investment." I think that'll be very helpful as well. And so as we're wrapping up here today, I want to say thank you for tuning in. Thank you for help allowing me to help you stay on top of PR. If you have any questions that you would like to share or ask us, we are always looking forward to hearing from you. You can send those to podcast@axiapr.com. In addition, if you have a topic or request that you would like us to cover as a solo episode or bringing an expert guest to talk about something, we would be thrilled to accommodate that request or at least consider your request. Lastly, if this episode was beneficial to you, I would ask you to take a moment and share it with a colleague who would also enjoy it.

So if you benefited from this solocast today, it would be a real pleasure for us if you would take a moment to share it with a colleague or contact in business that you know that might benefit from this same message. We thank you. We think they will thank you as well. And with that, I want to just sign off and say thank you for letting us have the opportunity to help you stay on top of PR. And this is Jason Mudd signing off from Axia Public Relations. I hope something great happens to you today.

- [Narrator] This has been On Top of PR with Jason Mudd, presented by ReviewMaxer. Be sure to subscribe so you don't miss an episode. And check out past shows at OnTopOfPR.com.

What happens to companies who cut back on PR and marketing during a recession with Jason Mudd, CEO of Axia Public Relations

Watch the episode here

5 things you’ll learn during the full episode:

Resources