Lost count of how many times you’ve heard that we’re living through unprecedented times? Google hasn’t, as you can see, their Trends show that the use of the word ‘unprecedented’ has skyrocketed since April:
We are living through an unprecedented use of the term “unprecedented” pic.twitter.com/JlZlaWQ0y3
— Jay Van Bavel (@jayvanbavel) May 2, 2020
As we head into the worst recession in 300 years, even Andrew Bailey, the Governor for the Bank of England, described the UK’s forecasted downturn as “unprecedented.” Given the bleak economic outlook, it comes as no surprise that 50% of marketers say they’re making cuts to their marketing budget, which means that networks are experiencing a sharp decline in their ad revenue.
Luckily, it isn’t all bad news, while 2020 may see GDP fall by 14%, it is expected to rebound next year by 15%. In ‘unprecedented’ times, many look back to the past as a way of making sense of the future. The voice of British advertisers (ISBA) has been looking at media spend data from previous recessions and have found that as GDP changes, so too does media spend, but does this correlation suggest that brands should reduce their media spend in a downturn?
Marketing should always be seen as an investment, not a cost.
Kantar, Brand Z, WARC, ISBA, and the IPA unanimously believe that brands should not reduce their media spend during a downturn. Their analysis of empirical data from previous recessions shows that reducing media spend damages brand metrics in the long term.
I recently listened to a webinar where Mark Ritson said that historical data shows that while decreasing budgets won’t hurt a brand’s prospects in the immediate future, it will in the long term. He argued that brands wanting to achieve a post-recession growth would need to increase their media spend during the downturn.
However, with the likes of Coca-Cola and Google reporting to reduce their media spend, it is understandable for brands to worry. To help address these concerns, many networks have launched initiatives to make media more affordable and accessible, including Channel 4, who have launched a free ad creation service to encourage more brands to make use of TV advertising.
Approaches to improve marketing effectiveness during a recession.
If you’re in the position where you can invest any funds into media this year, you’ll be wanting to make sure that your marketing campaign reaches its objectives and offers a good return on investment.
Almost 100 years ago, John Wanamaker, an early pioneer in modern marketing, was famously quoted for saying that half the money he spent on advertising was wasted; the trouble was, he didn’t know which half. Luckily our understanding of marketing and its effectiveness has grown considerably since then and thanks to the work of Les Binet and Peter Field, we have a set of guiding principles for achieving marketing effectiveness. In their IPA paper ‘The Long and Short of it,’ they emphasise the importance of balancing long and short term media investment. But do these principles still apply in ‘unprecedented’ times? In an article with the Chief Transformation Officer at MediaCom, Sue Unerman explains that given the current climate, planning should also include ‘the medium of it’ saying that;
“Brands should think medium-term and longest-term now and put people, their employees, their customers, and the nation at the heart of their decision-making.”
What should the focus of your medium and long term planning be?
I watched another webinar this week by Thomas Barta, the author of ‘The 12 powers of a marketing leader.’ Having been in lockdown for 56 days, I’ve been watching more than my fair share of webinars. He presented research from McKinsey that showed a direct correlation between a companies growth and its focus on customer experience during a recession, showing that focusing on customer experience is a winning strategy in ‘unprecedented’ times:
The Harvard Business Review agrees. In their article ‘How to Market in a Downturn’ they explain that:
“Failing to support brands or examine core customers’ changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.”
They also go onto explain the importance of understanding consumer recession psychology, which broadly fall into four segments:
- The slam-on-the-brakes segment
- Pained-but-patient consumers
- Comfortably well-off consumers
- The live-for-today segment
By understanding your customer’s behaviours and needs you’ll be much better placed to meet those needs now and in the future. In the hopefully not too distant future, customers may not remember what your brand did, but they’ll certainly remember how you made them feel. If you can be there for them during these ‘unprecedented times’ you’ll likely have some strong brand advocates to champion your brand in the future.
- If possible, use all of the empirical data that you can to evidence the importance of maintaining or increasing your media budget.
- When looking at medium-long term planning, put the needs of your employees and customers first by focusing on customer experience.
- Try to understand how your customers are feeling now and use the segments identified by the Harvard Business Review to see how you can best meet their needs in 2020. YouGov is also a great source of data; their Covid-19 Public Monitor shares daily consumer views and behaviour insight.
- TV is widely recognised as the most effective channel for advertising – make use of the bargains and initiatives that are currently on offer to create an ad and ensure it reaches as many people as possible.
Struggling with budgets?
Make use of corporate partnerships: Do you have any corporate partners that could help you? Nationwide has donated TV ad space to Shelter, and Ocean Outdoor donated ad space to the Red Cross that allowed them to use London’s Piccadilly Lights to showcase their ‘Kindness will keep us together’ campaign.
Keep an eye out for new initiatives: Last week, Clear Channel UK announced that they were offering 250 free out of home campaigns to local businesses that are working “tirelessly” to support communities across the country with their #BusinessAsUnusual initiative.
Google Ad Grants: Google offers grants for charities to help them reach a wider audience online.
Get a helping hand: A quarter of the UK’s workforce has currently been furloughed, many of whom have turned their attention to using their skills and expertise to support charities. Organisations like Furlunteering UK and Time to Spare are matching furloughed staff to charities needing support. Not Fur’Long is a pro-bono marketing agency that has been set up to help small businesses that are at risk during the coronavirus crisis.
Good luck, and please share with any organsiations that are struggling with their marketing strategy.
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