Why Smart Brands Double Down on Media During Economic Uncertainty

THE UNCERTAINTY PLAYBOOK: WHEN OTHERS RETREAT, YOU ADVANCE

During periods of economic uncertainty, two powerful forces converge and create a unique opportunity. First, media costs lessen as competitors pull back, reducing competition and driving down CPCs and CPMs. Second, consumer media consumption actually increases as people seek information, entertainment, and connection.

During COVID's peak, our clients saw YouTube video completion rates spike 70%. Social engagement doubled. Search costs dropped 10-15%. And, of course, stay-at-home orders played a role but (!)—historical data from the 2008-2009 financial crisis tells a similar story. During that time, TV viewing hours increased by 13% and more than one-third of Americans ranked watching TV as a favorite media activity, a jump of 28% vs previous years.

The Consumer Confidence Index consistently emerges as a strong predictor of sales performance in our MMM models. When confidence wavers, as it has throughout 2025, consumer behavior shifts in predictable ways: increased media consumption, heightened deal-seeking, and more deliberate purchase decisions. For brands willing to lean in, this creates an environment where media dollars can work significantly harder.

THE CASE FOR COUNTER-CYCLICAL INVESTMENT: REAL BRAND EXAMPLES

Let's consider real numbers. We tracked two client beauty brands through the COVID period with dramatically different strategies:

Brand A chose to invest aggressively. This beauty brand increased media spend by 56% during the height of the pandemic in 2020-2021, resulting in a 44% revenue increase in 2022, even as media spend remained relatively flat. This demonstrates that the increased investment during the uncertain period was the key driver of post-recovery growth.

Brand B took the opposite approach. Another beauty brand eliminated media efforts completely at a key retailer during the pandemic's peak. When the brand resumed advertising at normalized spending levels, it took a full year to reach pre-pandemic ROAS levels, even when accounting for seasonality. The algorithm restart challenges and loss of brand momentum created a compounding negative effect.

These aren't isolated cases. In an oft-cited study, McGraw-Hill discerned that brands that maintained advertising during the 1980s recession saw 256% higher sales growth than those that cut spending. This pattern has repeated across multiple economic cycles.

WHY YOUR MEDIA DOLLARS WORK HARDER DURING DOWNTURNS

• Reduced Competition: When competitors pull back spending, the media landscape becomes less crowded, translating directly to lower CPCs, reduced CPMs, and higher share of voice for brands willing to maintain investment. You're essentially buying market share at a discount.
• Increased Engagement: Economic anxiety drives higher media consumption across all channels. Whether consumers are seeking information about the economic situation, looking for deals, or simply seeking entertainment during stressful times, they're spending more time with media.
• Long-term Brand Building: Our MMM analyses consistently show that upper-funnel channels like TV and video have significant carryover effects—approximately 50% of online video impact carries into the following week. During downturns, when competitors reduce their brand-building activities, continuing to invest builds cumulative advantage that pays dividends during recovery periods.
• Algorithm Momentum: Digital advertising platforms reward consistent spending with better algorithm performance. Brands that maintain investment preserve their algorithmic momentum, while those that pause face the costly and time-sensitive process of rebuilding their digital presence.

STRATEGIC APPROACHES FOR DIFFERENT BUDGET LEVELS

Not every brand has unlimited resources to increase spending during downturns, but the principle of strategic reallocation still applies. For brands with constrained budgets, the key is identifying which channels offer the best combination of efficiency and reach during uncertain times.

Search channels typically become more efficient during downturns as competition decreases. Brand search, in particular, offers strong initial returns but limited scalability—making it ideal for right-sizing first to free up budget for other channels.

Social media and video platforms often show the strongest halo effects, boosting performance across the entire media mix. Even modest increases in these channels can have outsized impact when competitors are reducing their presence.

For brands with larger budgets, connected TV presents unique opportunities during downturns. TV often displays S-shaped response curves, requiring threshold spending levels before performance improves dramatically. Economic downturns can make reaching these thresholds more affordable.

THE RECOVERY ADVANTAGE

Perhaps the most compelling argument for maintaining media investment during economic uncertainty is the recovery advantage. Brands that sustain their market presence during downturns emerge from uncertainty periods with several competitive advantages:

• Preserved brand awareness while competitors rebuild from zero
• Maintained algorithmic momentum across digital platforms
• Established customer relationships that drive immediate growth as consumer confidence returns
• Market share gains that compound during recovery periods

• The data consistently shows that brands taking a long-term view during short-term uncertainty consistently outperform those making reactive cuts.

NAVIGATING 2025'S UNCERTAINTY

As we navigate 2025's continued economic volatility, the lessons from previous uncertain periods remain relevant. While every economic situation has unique characteristics, the fundamental dynamics of reduced competition and increased media consumption create consistent opportunities for strategic brands.

Ready to develop a counter-cyclical media strategy that positions your brand for immediate—and future—success? Connect with us to maximize every marketing dollar and optimize your media investments at every lifecycle stage.