The past five years have undeniably changed the landscape of the global economy. From the COVID-19 pandemic to the oscillating pressure of inflation, trade and weakening labor markets, the 2020s have largely been defined by uncertainty.
Marketers and advertisers sit at a precarious spot amidst these concerns. How do brands still maintain meaningful conversations with their customers while also shielding themselves from economic turbulence? And what buoys can they hold onto when weathering a potential storm?
Epsilon experts say the best way forward is to double down on basics: investing in data strategies that enable fundamental insights on who their customers are and how to reach them.
“It’s easy for brands to want to chase after the shiny new thing,” said Greg Gage, Sr. Director of Strategic Consulting at Epsilon. “Brands want to be agile and adjust their plans in the heat of the moment—tactical strategies that are reactionary. But are they focusing on those fundamental strategies? Are they using data and technology to strengthen strategies with lasting impact?”
A turbulent economy makes for tough decision-making by CMOs. According to eMarketer, US total ad spending growth is still in the black, though projected growth is down from last year by 1.2% (down to 6.3% from 7.5%). The Interactive Advertising Bureau (IAB) found that 94% of US advertisers are concerned about the impact of tariffs introduced by President Donald Trump, and as a result, 60% of advertisers expect a 6-10% decline in budgets.
Moreover, consumer sentiment in general is low. According to the University of Michigan, consumer sentiment has fallen 14.3% compared to a year ago. Joanne Hsu, director of consumer surveys at the university, said consumers are concerned about high prices and personal finances.
Marketers and advertisers are now faced with two compacting problems: as they tighten their own budgets, they need effective, authentic ways to reach consumers who are more selective about what they’re buying.
“In today’s environment, personalization isn’t a luxury—it’s a necessity ,” said Luke Flatla, vice president of strategic consulting at Epsilon. “CMOs need every dollar to drive measurable outcomes. That means aligning media spend with the moments, mindsets and messages that matter most to individual customers.”
But many brands are putting advertising band aids on deeper-rooted issues. For example, Flatla said he’s seen CPG brands lean in on pricing reductions and promotional tweaks as their main strategy shifts. And while consumers respond to that, there’s only so much a brand can do in those areas alone. Brands need effective messaging that clearly communicates things like price reductions and need to build conversations with their current and prospective customers that highlight a brand’s value amid turbulence.
“Promotions and pricing can boost short-term volume, but they’re not a substitute for long-term brand equity,” he said. “When brands pull back on personalized engagement or fail to reinforce their core value proposition, they risk eroding penetration and weakening the very consumer behaviors that drive sustainable growth.”
Losing sight of future-forward strategies during economic turbulence often makes or breaks brands. In a 2019 McKinsey Quarterly article, authors said—notably even before the 2020 pandemic—that higher volatility in the business environment was “the new normal.”
But the desire to pivot quickly in reactive ways is not a winning strategy. They looked at more than 1,000 publicly traded companies during the Great Recession in the late-aughts and early 2010s, and found that companies that drove growth during tough economic times achieved above-market total shareholder returns for the following 10 years.
Additionally, 70% of these companies became and remained top-quintile performers in their sector.
“In other words, in moments of uncertainty, growth is the key to establishing strategic distance from competitors,” wrote McKinsey.
During the COVID-19 pandemic, McKinsey cited United Airlines as a good example of growth-oriented thinking. They doubled down on branding, launching its biggest ad campaign in a decade.
The “Good leads the way,” campaign began production during a record-low for commercial airline travel. It was an emotional and optimistic call to the airline’s loyal customers, one designed to garner brand affinity even among those not traveling. Maggie Schmerin, head of global advertising and social media at United Airlines, told The Drumthat the campaign eventually rolled out as traveling picked up, and put the brand top of mind as travel swiftly recovered—and exceeded—pre-pandemic levels.
“Putting our employees in the spotlight helps us underscore that ‘Good leads the way’ is more than a tagline,” Schmerin said.
And it worked: McKinsey analysis showed the airline experienced growth in passengers and miles flown in the two years post campaign.
“We know that people choose an airline based on things like price and schedule and ‘is it non-stop?’” United Airlines Chief Communications Office Josh Earnest told Inc. in 2022. “This is another reason for people to choose an airline. And we think it is a really good reason.”
So what is a brand to do when they’re being asked to cut budgets while maintaining growth strategies? Gage said it’s all about recognizing foundational strategies that propel long-term ROI. That starts with developing an intentional data strategy and investing in technology that gives brands a deeper understanding of who their customers are, what they want and how to reach them.
“We’ve seen a scramble to purchase tech and data, but they have no clear strategy for what they want to do with it,” Gage said. “You have to understand the path you want to take to achieve specific outcomes, and you start with the data you have and determine how it can have a meaningful impact in achieving those outcomes.”
He said brands often have ill-defined data strategies or have several data silos within their organization. Fragmented and incomplete data can cause brands to deploy strategies that aren’t getting to the root of their problems.
For example, if a brand is trying to bolster a retention strategy but doesn’t have the data to inform granular channel activation allocations, they may waste a lot of money doing big media buys on channels that aren’t reaching their real customers.
Even on a more targeted level, there are many examples of where advertising waste goes wrong because of bad data: marketing to customers who already purchased a product, sending diaper ads to people who recently purchased them for a friend but don't have kids of their own, etc. In an economic downturn, every dollar matters, which is where efficient marketing becomes that much more important--you can't be wasting impressions on people that aren't going to buy from you.
“Data allows you to function in a test and learn environment,” Gage said. “And it allows marketers to make purchase and activation decisions based on quick wins to learn the right way to do it versus throwing all your eggs in a basket and waiting to see the outcomes after the campaigns have already passed.”
Flatla agreed, adding that during times where the economy is strained, brands may look at a shiny new solution to alleviate pain for the sake of effectiveness. He said AI is a prime example of this: Brands believe it can fix their problems quickly and deploy AI-based solutions without stringent due diligence.
“Too many brands are rushing into AI or new tools without a strategic foundation,” he says. “The real opportunity is to revisit core business objectives and reverse-engineer from there: Which use cases matter most? Which audiences drive future value? Do we have the data and activation muscle to go after those opportunities in a targeted, scalable way?”
He likened it to a workout regimen. Fad workouts may tone specific muscles, but a holistic wellness strategy requires consistency, defined goals and fundamentals beyond mere exercise.
“Strategy can’t live in a deck—it needs to show up in the day-to-day execution," Flatla said. “Every campaign should ladder up to clear goals and consumer experiences, tie into defined objectives and use cases and use data to create feedback loops. That’s how brands build both relevance and resilience."
The biggest tool in a marketer’s toolbox is the depth of actionable, insightful data at their fingertips, and making that data usable is a strategy that succeeds in good and bad economic periods. This includes determining how (and why) data is collected, how it’s being cleaned and organized, and how all systems inside an organization are accessing it for insights.
Investing in those strategies now can help marketers run more effective campaigns during this economic crisis and whatever economic headwinds will surely come after it.
“The more siloed a company is in how they execute data strategies, the less nimble they are, the more difficult it will be to measure, and the more fragmented the customer experience will be,” Gage said. “In the face of a changing economy, you can’t afford to not be sure of what data fuels your campaigns—and you want to be equipped for whatever change happens.”
