Hong Kong's recession deepened to a record high of 9.1 per cent in the first quarter of this year, and has further extended into the second quarter. While much of the rest of the world has only been battling the Covid-19 pandemic for the last eight months, Hong Kong has also had to deal with months of anti-government protests.

As head of advertising for the South China Morning Post’s largest market, Hong Kong, I’ve spent the last several months reading countless papers and articles while studying recessions as far back as the Great Depression from 1929 to ’39 – curious to see how they have had an impact on the global advertising industry and discover what we can learn and apply from past recessions.

If taking advantage of low advertising costs, increasing your brand’s share of voice, and using an opportunity to capture market share from weaker rivals of category leaders that have gone silent is not your cup of tea, then there are other things you can consider while this recession and pandemic is underway.

Change your tactics – because your customers have changed

Choosing not to advertise right now is not the worst thing you can do. Yet this stance assumes that everything is the same. Advertisers need to accept that the playing field will have changed by now – and so should their marketing strategies, starting with their target audience. Harvard Business Review calls this “Understanding Recession Psychology” and this starts with an understanding of the new customer segments that have emerged as a result of a recession. Traditional audience segmentation becomes less important and psychological segmentation, which takes into consideration the consumers’ emotional reactions to the economic environment, takes over.

Last month SCMP launched Lighthouse, an audience activation and insights tool that relies solely on SCMP’s first-party audience data. Through this tool we are able to effectively and efficiently find relevant audiences for our advertisers to target. However we are also seeing a lot of interest from advertisers that want to use Lighthouse audience insights to validate whether their existing audience segments are still relevant given the changes in the market, or if new ones have emerged. Some have been using Lighthouse to find new audience segments to target to replace old ones they’ve lost.

Innovate with new product and service offerings

I am seeing many of our advertisers innovating through the introduction of new service and product offerings, which adapt better in a new market landscape of health-conscious, remote-working consumers. Another way brands can innovate is through the introduction of a fighter brand; ironically this is one of the oldest strategies in the recession playbook. Premium-brand market leaders shouldn’t move their brands downmarket. Instead they should introduce a lower-priced version of the premium offering sold under a different name as a response to lower-priced rivals, while protecting the more premium-priced offerings.

Trim your product and media portfolio

Tough times provide an imperative to cut loose poor performers and eliminate ineffective tactics, and this can apply to both under-performing products and media tactics. While months of lockdown and isolation have caused web browsing and social media engagement to increase, the Kantar Covid-19 Barometer has highlighted the fact that social media platforms are trusted by only 11 per cent of respondents, while 52 per cent have shifted back to trusting news platforms.

The whole world’s attention has undoubtedly shifted towards China in the last several months – firstly as the place where the Covid-19 outbreak began and most recently on its controversial National Security Law. The SCMP, having established itself as the global authority on China news, has seen monthly users to scmp.com reach as high as 50 million, two-thirds of them coming from the United States and Southeast Asia.

Recessions make it easier to get a companywide buy-in for revising marketing strategies and reallocating investments and over the last few months we are seeing more advertisers shifting some of their regional campaigns towards SCMP.

Act on a moral obligation

Only 8 per cent of consumers surveyed by Kantar said brands should stop advertising, while 75 per cent of them feel brands should be informing the public about their efforts to combat the situation.

Information has become a vital currency, and the Covid-19 pandemic has made this even more apparent, but advertisers sometimes do not realise the extent to which they themselves control global communication channels. Take Nike for example, a brand that has more than 300 social media accounts across major social media platforms. On Instagram it is the most-followed brand. It has the resources to reach more people than some governments do. The World Health Organisation has 7.4 million fans on Facebook while Nike Football alone has 43 million. On top of that, Nike has access to billions in advertising-spending dollars that would further extend that reach.

When Nike launched its “Play Inside, Play for the World” advertising campaign, it essentially encouraged quarantining and social distancing during the Covid-19 pandemic much more effectively than governments were able to do. This should put pressure on advertisers to uphold an unspoken moral obligation, to talk about this global pandemic and put the right messages out there to help fight alongside government agencies and the media on the information dissemination frontlines during this crisis.

Stopping all advertising is not the way forward. Going dark will only add to the sense of crisis and panic, as well as undermining one’s brand in the long term. The best quote about advertising in a recession is definitely that from Sam Walton, the founder of Wal-Mart. When he was asked, “What do you think about a recession?”, he responded: “I thought about it and decided not to participate.”