Marketing through COVID-19: What can we learn from the ‘winners’ of past recessions?
We’re undoubtedly living through a period of change that is almost unparalleled in recent history, with the current lockdown set to be extended in the UK until May, and catastrophic predictions on the associated economic hit. This period of uncertainty has unsurprisingly led to many brands and marketers deciding to cut back on advertising spends. As we have detailed on these pages previously, there are many reasons for advertisers who can keep selling, to keep spending. Media costs, particularly on TV, are at an all-time low and audiences are spending increased time at home and consuming more media than ever before.
Looking into the past can often give us interesting insights into the future, so observing historic recessions, what are the key trends for those advertisers who “win out”?
The oft-quoted consensus is that those brands who continue spending and ‘out shouting’ their competitors are those who come out of the other side strongest. In 2008, the ‘top 10 most powerful brands’ in terms of marketing spend recovered three times faster than the S&P 500. As far back as the great depression, we can see that those advertisers who increased spends in 1920 fared better for the rest of the decade. Evidence suggests this is due to the extra share of voice (ESOV) trend observed by the IPA, that there is an inextricable link between SOV and market share: to increase market share, you must invest in ESOV. With rival brands pulling back, this is the time to be driving SOV. As true as this may be, the studies on this topic have generally only taken in huge, established brands with extremely deep pockets and maintaining or increasing spends isn’t necessarily viable for many advertisers.
Probably more relevant is research by both Ehrenberg-Bass Institute and Harvard Business School into the attributes of businesses that came through past recessions in a stronger position. Consistent in their analysis, the important pillars were:
- Audience research – This is more crucial than ever, with consumer habits and values seeing major shifts, being on the front foot to react to these is key. Advertisers who can spot opportunities and be adaptive will see success. As an example, we have been monitoring TV viewing habits versus consumer response rates daily and identified areas of opportunity, such as in the third sector.
- Product – Brands that can be flexible with their product offering will be in the best shape to succeed. Uber Eats swiftly integrating ‘no contact’ food delivery is an excellent example of this. We’ve been working with several direct-to-consumer brands who have been able to maximise the e-commerce opportunity in the current marketplace.
- Pricing – Both Ehrenberg-Bass and Harvard Business School recommend against automatically dropping prices – which could impact brand equity in the long term – and instead to consider short-term tactics such as offers, quantity discounts etc. At All Response Media, we are working with brands and cost-efficient creative partners to develop and test tactical pricing and messaging for our advertisers accordingly.
- Marketing – Both studies also comment that whilst brands should try to maintain marketing spends, the key is to make them work as effectively as possible. As we have illustrated in our articles previously, maximising the cost efficiencies currently in the market and pivoting to changing audience consumption habits, make a better return on investment (ROI) a tangible reality.
All Response Media viewpoint
The above pillars are always a core part of our planning and execution, but this is even more important in the current situation. Whether it be using daily BARB data to assess the shifting patterns in viewing behaviour or leveraging YouGov omnibus surveys to understand the impact of COVID-19 on consumer habits and therefore creative messaging – we are urging our advertisers to remain adaptive and ready to improvise.
The developing market dynamics have opened new channels to reach our audiences cost-effectively and most excitingly, they also offer the potential for challenger brands in the right marketplace to truly disrupt and drive longer-term consumer change.
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