The global pandemic is impacting every aspect of life and business. With such an unprecedented situation, it’s difficult to make decisions, especially related to marketing and media approaches. Something with the best intentions can miss the mark with consumers. And while being cautious is the natural response, we need to consider how brands can react.
Using previous learnings from economic dips is a useful source. Although there was a different reason for the 2008 recession, the economic impact may be similar. Responses from brands and the nation’s mood may offer a relatable comparison.
Lessons from economic dips
Brands that don’t go dark perform better than those that do. When the market restabilises, strong brands are likely to recover nine times faster than their counterparts, according to the Brand Z study of the 2008 recession.
We’ve also previously seen the impact of value — or what is known as “the lipstick effect.” The importance of value increases in harder economic times. People still treat themselves to luxuries but they tend to be smaller luxuries, like buying nice lipstick versus splurging on a massive shopping blowout.
This IPA report summarises resources on brand health, brand performance impacts, and how share of voice (SOV) and market (SOM) can be affected with different responses in a downturn. It is better to maintain SOV at or above SOM during a downturn. The longer-term improvement in profitability is likely to greatly outweigh the short-term reduction. If other brands are cutting budgets, the longer-term benefit of maintaining SOV at or above SOM will be even greater.
Specific COVID-19 impacts and predictions
COVID-19 is very different from anything we have seen before and will evolve. For example, how scared will people be when restrictions lift? Will this change by audience? Will youth be more willing to travel? Will business or leisure journeys start first?
Canvas8 consolidated the “pandemic response” into a useful slide overview, which nicely outlines emotional need states and responses to those.
As with SARS or any other global health crisis, the coronavirus outbreak will have three distinct phases: acute outbreak, recovery, and the new normal. It’s important to ensure we are not focused on the short term but on how our reaction to the current climate can impact our long-term business outcomes.
Unsurprisingly, consumer behaviours are changing. Cash payments are declining. Not only are people making more debit/credit payments but, importantly, mobile payments and the number of people using these for the first time are worth noting. Brands need to consider how they are set up for this model should consumers continue with mobile-first, cashless payments.
Media consumption patterns are also changing. Channels such as television, video-on-demand, paid social, and programmatic display have significant increases in audience size. This provides a real opportunity for media value for advertisers who can still invest in media during this period or who can change their messages to adjust to a changing need.
Some of the key changes will come in how younger audiences consume. There is an expectation that TV audiences within this age group will go up. The Internet will also become the lifeline for news, entertainment, research, and escapism. Negatively impacted media are those reliant on an out-of-home audience (such as cinema and outdoor display).
Brands are showing they care with a focus on social change campaigns. Many brands are providing support, donating time and money, and trying to support the vulnerable through public relations and social media efforts.
Social change activity is not about exploiting the current crisis as a way of boosting profits or putting brands and advertising above the very real worries and needs of people across the country. We need to make sure we take into account the fine line between a business demonstrating empathy or communicating something useful.
Overall, the impact of COVID-19 is huge and like nothing we have seen before. We need to think about and understand what specific challenges brands might need to overcome. With shifts in how businesses are operating, advertising communications also need to be adjusted. Brands need to consider how they communicate clearly and authentically to positively support consumers in such a tough time through positive social change.