Urgent Need for Proactive Marketing Investment Analysis as Consumer Sentiment Plummets and Business Uncertainty Reaches Record Highs

By Rob Jayson

Marketers should get ahead of potential negative revenue impacts brought about by falling consumer confidence and reduced business investment spending. 

Three steps marketers can take now manage this economic climate

1. Use Marketing Analytics to understand the potential risks
2. Evaluate the marketing budget and what is effective and required to deliver brand growth in changed economic circumstances
3. Review the ideal optimum balance of brand and promotional/value support and messaging to drive brand sales

USIM’s Marketing Mix Modeling (MMM) forecasts the impact of these changing circumstances which can help to mitigate the effects of the changes, protect the most essential marketing investments and prevent any knee-jerk reactions that could do lasting damage to a brand well after this downturn is over.

WHAT HAPPENED? 

In March 2025 both consumer sentiment (falling) and business uncertainty (rising) indices are showing alarming changes that will potentially have direct negative impact on consumer spending.

US Consumer Sentiment fell by another 11.5% in March and is approaching it’s all time low of 50.0 that occurred during the pandemic in 2020.

Source: University of Michigan

Business uncertainty (measured by Experian) rose to an all time high in February – higher even than during the COVID pandemic.

Source: Federal Reserve Bank of Atlanta and Experian Economic Strategy Group

WHY DOES THIS MATTER?  

There is strong evidence (both from pandemic era studies and the federal reserve) that sinking consumer confidence has a negative impact on consumer spending.  Consumers put off spending on high ticket items and reduce discretionary spending on non-essentials.

Combining this with all time high business uncertainty and USIM forecast that we will see increasing pressure on marketing budgets in the current budgeting cycle.

USIM MMM studies have shown that negative consumer sentiment has a negative impact on sales in many categories.  As a benchmark we show here the findings in several large retail categories

WHAT CAN BE DONE TO ADDRESS THE ISSUE? 

Brands Need to Take Proactive Measures To Counteract Potential Negative Sales Impact

It is critical to understand the potential impact consumer sentiment has on a particular category and brand.  Some categories and brands can be highly resistant to falls in consumer sentiment if they have a strong value positioning or a very loyal base of consumers.

However, if analytics like MMM show that a brand has a high vulnerability to sales impacts from falls in consumer sentiment, then forward planning to address different aspect of communication strategies can help to successfully counteract the negative effects.

Media investment strategies.  MMM analytics reveal the media channels that can maximize short term sales response and directly counter-act the negative drag from dips in consumer sentiment.  Rebalancing spending between long-term brand/awareness building media channels to proven short-term sales acquisitions channels deliver increases in short term sales.

Audience segment strategies.  Evaluate the balance between tightly targeted first party/CRM based lookalike audiences and wider prospecting target segments that build brand interest and engagement for the brand.

Geo-location precision.  For our retail clients with bricks and mortar locations USIM have developed a unique mobile data solution to ensure we only serve media in the precise trading zone of each individual location.  For clients with brands distributed through national retailers we deliver custom sales driving messages to prospect buyers only in the trade zones of each retailer

Promotion and brand messaging.  Brands with stronger value for money positioning are more resistant to downturns in consumer sentiment.  It’s essential not to undermine brand differentiation and positioning, but with careful management and media placement, the role of targeted promotion and a higher focus on value can be delivered to the most receptive target audience segments.

To sustain resilience in the face of shifting consumer sentiment, brands must remain agile and continuously refine their strategies. Regular performance analysis, market trend monitoring, and consumer feedback integration will ensure that media investments, audience targeting, and messaging remain effective. By fostering brand loyalty through meaningful engagement and adapting swiftly to emerging challenges, brands can not only weather fluctuations in demand but also position themselves for long-term growth and stability.