Erica Garman VP of Marketing

Erica Garman, VP of marketing at Intero Digital, is an experienced marketing strategist with over 12 years of experience in digital marketing. Erica has a passion for helping brands build meaningful connections with their audiences. With a deep understanding of consumer behavior and trends, she specializes in developing integrated marketing campaigns that leverage both traditional and digital channels for maximum impact.

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macroeconomics and marketing

How the Macro-Economic Climate Is Affecting Marketers — and How You Can Capitalize on It

How the Macro-Economic Climate Is Affecting Marketers — and How You Can Capitalize on It

Erica Garman, Vice President of Marketing • Intero Digital • May 23, 2024

macroeconomics and marketing

Key Takeaways

  • Macroeconomics can provide a bird’s-eye view of how much money there is in the economy and where it’s going. And it’s the marketer’s job to ensure some of that money comes to their business.
  • A PEST analysis can help marketers analyze the macro environment and prepare for how their customers might behave. PEST stands for political, economical, sociocultural, and technological.
  • Don’t base marketing decisions based on a single macroeconomic trend. Remember that the same macroeconomic trend can affect different business models differently, and different macroeconomic trends impact different industries in different ways.

There you are. Supposedly working but instead checking your Apple News because it’s 10:30 a.m. and you earned it. But before you can get the latest celeb tea or dive into a hard-hitting BuzzFeed editorial investigating hedgehogs, you’re met with a barrage of trending news you never asked for. 

And it’s bleak.  

Spending is down. Interest rates are up.  War is seemingly everywhere. Affordable homes are definitely nowhere. And you didn’t win the lottery. 

But it isn’t all bad news if you can read between the lines. Or, better said, look beyond them. 

In this article, let’s explore how macroeconomic trends affect marketers and how you can capitalize on them right now. 

What Is Macroeconomics?

Macroeconomics seeks to quantify three things:  

  1. Aggregate production. 
  2. Price levels. 
  3. Spending. 

Together, these can provide a bird’s-eye view of how much money there is in the economy and where that money is going. 

Helping to determine those three things is a who’s who of factors you might remember from your Economics 101 class, including:    

  • Gross domestic product. 
  • Inflation. 
  • Interest rates. 
  • Employment. 
  • Monetary policy. 
  • Fiscal policy. 
  • Plus a ton more. 

Macroeconomics is the study of all this — how big-picture forces shape and move the economy as a whole. 

Why Macroeconomics Matters to Marketers

Every industry, every company, every consumer is impacted by the larger economy. Sometimes negatively. Sometimes positively. Whatever the outcome, the economy as a whole impacts how people behave. 

Which is also something that marketers do. 

That’s why macroeconomics matters to marketers. 

If macroeconomics is all about understanding where money is going, it’s a marketer’s job to ensure some of that money comes the way of their business. 

Using PEST to Understand Macroeconomics

Let’s be honest. Businesses, and marketers especially, tend to live in a bubble. They base a majority of decisions on a select few KPIs, direct competitors, and industry trends. And they often have tunnel vision for profit margins and ROI. But there’s a much bigger world out there influencing bottom lines. 

It’s called the macro environment. 

Analyzing the macro environment is an important part of any (successful) marketing strategy. One of the best ways to analyze the macro environment is a PEST analysis. 

PEST stands for:  

  • Political. 
  • Economical. 
  • Sociocultural. 
  • Technological.

By analyzing those four areas, a marketer can better prepare for how their customers will behave. So we need to stop scrolling past those top stories being spoon-fed to us on Apple News or wherever it is you actively avoid learning about current events and start paying attention. These stories are covering trends in the macro environment — trends that are influencing key macroeconomic factors that impact your business.

For more information, you can check out this full guide to PEST analysis. 

7 Macroeconomic Trends Every Marketer Should Watch

Theres a lot of macroeconomic data we can track. Some key data points I recommend marketers keep an eye on include the following: 

  1. Gross domestic product (GDP): The measure of total economic output and the value of all goods and services produced by a country. (Reference the U.S. Bureau of Economic Analysis for quarterly reports tracking GDP.)
  2. Consumer spending: The total money spent on goods and services by individuals and households. Declining trends in spending often indicate an economic downturn or recession. (The BEA tracks consumer spending monthly.)
  3. Inflation: The rate at which prices are rising. When inflation is high, consumers purchase less. Inflation is deemed high by the Federal Reserve when it starts trending over 2%. (Use this chart to track the U.S. inflation rate.)
  4. Interest rates: The cost of borrowing money. The Fed will often raise interest rates when inflation is high. This reduces consumption and business, making it difficult to grow. (Use this chart to track the U.S. federal fund interest rates.)
  5. Unemployment rate: The percentage of the population that is unemployed. High unemployment indicates a decrease in consumer spending. (Use this chart to track the U.S. civilian unemployment rate and this chart to track unemployment by state.)
  6. Government spending: The amount a government spends. When government spending is high or increases, it can boost the economy but also lead to higher inflation. (View how much the U.S. government has spent.)
  7. Economic growth: The rate at which the economy is contracting or expanding, often in relation to its levels of aggregate production. When the economy is growing, consumers have more disposable income and spending increases. The GDP growth rate is a good indicator of economic growth. (Track the U.S. GDP growth rate here.) 

There are more, for sure. The more a marketer tracks, the more informed their strategy will be. But it can also be overkill, so these are a great starting point. 

If you’re looking to get even more proactive, you can keep tabs on the Federal Reserve’s monetary policy (which focuses on interest rates and access to credit) and the U.S. government’s fiscal policy (which dives into taxation, borrowing, and spending). Internationally focused businesses should also reference International Monetary Fund fiscal policies, as well as any country-specific policies where they operate. 

How Macroeconomic Trends Impact Marketing

Sure, delving into macroeconomics might stretch the normal purview of your average marketing strategy a bit. But the goal here is to make your marketing strategy anything but normal. That said, it might help to ground some of what we’ve covered so far onto something a little more familiar. 

And there’s nothing more familiar than the 4 C’s and 4 P’s of marketing. 

In case you need a refresher: 

Customer / Product

Cost / Price

Convenience / Place

Communication / Promotion

Let’s see how macroeconomic trends impact marketing when viewed through these principles. 

Macroeconomics’ Effect on Consumers and Products 

Macroeconomics helps businesses understand their value compared to a consumer’s budget (as opposed to microeconomics, which helps businesses understand their value compared to the competition). Marketing acquires customers using a strong value proposition that satisfies the wants and needs of a consumer within the confines of their perceived budget. 

When consumer spending is high, consumers are more likely to buy non-essential products. When unemployment is high, there’s often an increase in demand for income-generating and skill-oriented services. Identify what attracts your customers to your products, and modify your offering to align with those interests. 

Macroeconomics’ Effect on Cost and Price 

There is a marketing sweet spot where consumer purchasing power parallels increasing profit margins. Monitoring macroeconomic trends can help you consistently toe the line. But it’s not easy. If inflation is high, a business may resort to raising its prices to stay profitable. But higher prices decrease a consumer’s desire to spend. So it’s easy to get caught in a self-destructive loop, especially during economic downturns. 

What do you do? Well, for one, rarely should you raise your prices just because your competitors are. That’s how industries self-implode. Nor should you raise prices just because your profit margins are down. That’s how companies self-implode. Raise prices because it makes financial sense to your business and to your customers within the broader economic environment. If you see inflation skyrocketing, see whether you can make cost adjustments before you dive into price adjustments. Once you’ve optimized your internal structure, optimize your pricing structure to ensure a balance between sales and purchases that everyone can enjoy. 

Macroeconomics’ Effect on Convenience and Place 

In prosperous economies, consumers seek convenience and are more likely to make impulse purchases. In such times, marketing strategies that focus on ease of access, fast delivery, and instant gratification excel. Conversely, in economic downturns, consumers are cost-conscious, seeking value over convenience. In such times, marketing efforts that emphasize affordability excel. 

Marketers must identify the right place at the right time based on macroeconomic trends and then tailor their strategies accordingly. 

Macroeconomics’ Effect on Communication and Promotion 

During economic upswings, businesses often allocate more resources to promotions that emphasize brand image, lifestyle, and aspirational messaging because consumer confidence is higher and purchasing power is strong. In contrast, during economic downturns, marketers might need to focus on value-driven promotions that emphasize savings and address consumer concerns about financial security. 

But consumers aren’t the only ones this relates to. Macroeconomic factors like interest rates can also impact the affordability of marketing campaigns themselves, particularly when businesses operate in global markets. Recognizing macroeconomic shifts and aligning communication strategies accordingly is essential for keeping marketing efforts profitable. 

qoute

To capitalize on macroeconomic trends, a marketer, above all else, must know everything there is to know about their target audience and how they are influenced by any given macroeconomic trend.

— Erica Garman, VP of Marketing • Intero Digital

How to Capitalize on Macroeconomic Trends Right Now

At this point, we should address the elephant in the room. 

Most marketers don’t love math. 

Marketers get into marketing because it is the most creative, least numbery of all the business disciplines. So you might be wondering how in the world any self-respecting, math-averse marketer can be expected to make sound strategic decisions based on economic data. Don’t worry. You don’t need to be an economist steeped in statistical analysis to capitalize on macroeconomics.

You just need to understand how lines work. 

Most macroeconomic data has already been collated by government agencies, often in handy line graphs. Which means marketers are saved from having to do a lot of hard work (and math). 

Macroeconomics and Marketing: Unemployment Rate 

For example, the unemployment rate is mapped out in a handy line graph by the Bureau of Labor Statistics. Let’s start there and apply what we’ve been discussing to some real-world examples. Hopefully by doing so you can extract a few key takeaways to use for your own campaigns. 

The unemployment rate in Q4 2023 hovered just below 4%. It also returned to pre-pandemic levels. This indicates consumer confidence was likely strong and spending was likely up. That’s good news for B2C marketers, especially those promoting non-essential lifestyle products. 

However, for B2B marketers, that unemployment rate might have been too low. 

Economists typically cite a 3.5% to 6% unemployment rate as ideal. Anything lower threatens wage inflation, which requires businesses to pay employees more, which cuts into profits, which makes it more challenging to spend on third-party services. The rate in Q4 2023 skirts the bottom threshold. So B2B marketers might need to heed customer anxieties when running promotions. 

Which brings us to our first key takeaway: The same macroeconomic trend can affect different business models — like B2B or B2C — differently.  

Also, the unemployment rate noted above represents the national average, which is useful for businesses that operate nationwide. But local marketers will want to pay attention to geographic-specific unemployment rates.  

This leads to our second takeaway: Macroeconomic trends should be analyzed separately at the global, national, and local levels. 

Macroeconomics and Marketing: Gas Prices 

Fact: Gas prices affect the economy. 

They can also be a strong indicator of consumer behavior. 

As Investopedia puts it: “Though economists and analysts may argue about the extent to which gas prices have an effect on the economy, there is, at the least, a correlation between consumer confidence, spending habits, and gas prices.” 

Backing that up is a Gallup poll on consumer sentiment showing that increases in state gas prices made consumers more pessimistic about the economy, even if GDP grew. 

So looking at gas prices, a marketer might deduce that because gas prices are going up, consumer confidence is trending downward and spending is getting tighter. 

Right about now, you might say: “Hold up, Erica! Didn’t the unemployment rate just tell us that consumer confidence was trending up? So unemployment says consumers are buying more, while gas prices say they’re buying less. They contradict each other!” 

That’s a fantastic point and brings us to another takeaway: Different macroeconomic trends impact different industries and different demographics in different ways. 

Not all consumers will be impacted by high gas prices in the same way. For instance, households that run on oil, electricity, and cooling will be more impacted. Those who work from home will be less impacted. 

The same goes for businesses. 

If you’re a business that can offset higher gas prices — like an electric bike seller — then you’ll want to adjust your marketing strategy to capitalize on the times. 

Conversely, if you’re, say, a business in the travel industry, then you could be hurt by high gas prices, and you might need to adjust your marketing strategy to compensate. Or if you’re an automaker, you may want to increase your marketing efforts for your EV cars over your gas cars. 

But this also brings up a fourth key takeaway: Don’t make marketing decisions based on a single macroeconomic trend in a vacuum. 

I say that because sometimes high gas prices don’t mean low consumer spending. In fact, gas prices are a mixed bag of information about the economy. 

For example, a report from the EIA on gas expenditure revealed that despite rising gas prices, the amount of disposable income people were spending on gas was holding steady, if not going down. Which meant that gas prices were having little negative impact on their spending behavior.  

The conclusion here being that a rise in disposable income per household offset the rise in gas prices. That, along with improvements in fuel efficiency, gas mileage, and oil independence around the world was ensuring high prices didn’t prevent people from spending their money. Which was great news for marketers. 

But that was 2022. 

Jump ahead to Q4 2023 with record temperatures hurting oil refinery outputs and Saudi Arabia cutting oil production, and the outlook is a little different. 

This time around, rising gas prices are impacting disposable incomes and consumer spending habits.  

By exploring the Bureau of Economic Analysis’ personal income reports, we find that by 2023, people were saving less, their disposable income levels were decreasing, and their outlays (expenditures) were increasing.  

Most notably, that same report showed gasoline taking up a massive amount of consumer spending.  

So what’s all this mean?

For one, marketers need to analyze both long-term and short-term macroeconomic trends to get the full picture. 

For another, every macroeconomic trend has both a positive and a negative. (Yes, consumer spending was up in August 2023. Good for marketers. But that’s because everyone was spending a crazy amount on gas. Bad for marketers.) 

Marketers need to use a PEST analysis, cross-analyzing several different macroeconomic factors to decode opportunities and arrive at a well-informed marketing strategy. (Rising gas prices are a perfect example. They are influenced not only by economic factors, but also technological, political, and sociocultural ones.) 

And finally, one last takeaway: Know your audience.  

To capitalize on macroeconomic trends, a marketer, above all else, must know everything there is to know about their target audience and how they are influenced by any given macroeconomic trend. 

Macroeconomics and Marketing: Takeaway Review

That was a lot we just covered. We might have only just examined two macroeconomic trends in detail — unemployment rate and gas prices — but we’ve covered several key takeaways that marketers can use for any macroeconomic trend analysis.  

To recap, those takeaways are: 

  • The same macroeconomic trend can affect different business models differently. 
  • Different macroeconomic trends impact different industries in different ways. 
  • Macroeconomic trends should be analyzed globally, nationally, and locally. 
  • Don’t base marketing decisions on a single macroeconomic trend. 
  • Analyze both long-term and short-term macroeconomic trends. 
  • Know your audience.
macroeconomics

Use Predictive AI to Boost Macroeconomics for Marketing

Macroeconomics for marketing can be overwhelming. My recommendation? Don’t do it alone. 

Let AI help. 

Without a doubt, you have to be careful when using AI for anything. But if you follow the tips in our article on how to use predictive AI, you will not only make your life so much easier, but you will also get so much more out of your macroeconomic analyses. 

For instance, here’s what happens when we query a very simple prompt for “unemployment rate” using Google’s AI functionality in search: 

Google SGE unemployment rate

Here’s a slightly more refined example exploring consumer spending in the video game industry:

consumer spending on video games

In a matter of seconds, we’ve found valuable demographic data on consumer spending habits and what they’re spending on. You’ll need to factcheck those figures, but AI just gave us a great head start. 

Macroeconomics Makes Marketing Better

Think of the economy like this: It’s the horse leading the cart. 

Where the economy goes, your customers will follow. So if marketing is all about being at the right place at the right time, you need to predict where the economy will bring your audience. Analyzing macroeconomics is the key. Do that, and you will ensure that when they arrive, you’ll be there, standing confidently well-informed. 

Some final tips to ensure you get there:  

  • Stay up-to-date on the latest macroeconomic news and data. 
  • Pay attention to government websites, reputable news outlets, and financial publications. 
  • Identify opportunities and threats in macroeconomic trends (every trend will contain both). 
  • Macroeconomic trends change quickly, so be adaptable in your pricing, communications, product offerings, campaigns, and other marketing strategies. 
  • Diversify your reach, strengthen your offering, and recession-proof your business by partnering with other businesses. 

When marketers don’t use macroeconomic analyses, they’re offering half the value to clients. I can’t stress enough how useful it is when we present real-world data based on current economic factors to support our marketing strategies. It’s an invaluable tool in our arsenal, and I highly recommend adding it to yours.

Besides, macroeconomics is impacting your marketing whether you like it or not, so you might as well use it to your advantage. 

Are you ready to find the gaps in your digital marketing strategy?

Erica Garman VP of Marketing

Erica Garman, VP of marketing at Intero Digital, is an experienced marketing strategist with over 12 years of experience in digital marketing. Erica has a passion for helping brands build meaningful connections with their audiences. With a deep understanding of consumer behavior and trends, she specializes in developing integrated marketing campaigns that leverage both traditional and digital channels for maximum impact.