Other brands have taken a more conservative approach to marketing spend, freezing budgets and conserving funds. This got me thinking and reading about past periods of hardship like the Global Financial Crisis, back in 2008 when Saltmine was in its infancy. It seems to me that the brands that fared the best through this period were the ones that took a long-term approach, maintained their marketing spend and seized the opportunity during the rocky period to strengthen their market position for the future good.
It seems certain to me that a global recession is on the horizon and that instinctive consumer behaviour in a financial crisis is to cut spending. But I strongly believe that now is not the time for brands to stop spending too. Based on what I know and what I’ve researched, these are my key thoughts about marketing in a global crisis and the importance of maintaining your marketing spend.
Easier said than done? Perhaps, but there are plenty of reasons to Keep Calm and Carry On too.
In some industries where there are no longer consumers and may not be for some time, such as airlines and travel, protecting cashflow for the survival of the business may leave you with no other option but to cut all marketing spend. But for many other consumer goods and services brands this situation could be an opportunity to explore cleverer ways to put your marketing budget to work.
In his study, “Advertising in a Downturn” British researcher and ‘Godfather of Effectiveness’, Peter Field, referred to the data collected by the Institute of Practitioners in Advertising (IPA) during the Global Financial Crisis in 2008-9. The data measured how brands coped with the recession and Field noted that freezing advertising during an economic crisis poses a significant risk that can take up to five years for brands to recover from. All the while experiencing a “major loss” of profit.
So, with this in mind, now is not the time to make any knee jerk reactions to cost cutting.
Shift your focus
Before you go and pull your marketing spend because your tactical brand activities are no longer relevant, or possible (I’m thinking of in-store activation and sampling campaigns for example) – have you considered redirecting your short-term activity budget into your brand building budget for longer term gains?
As an FMCG marketer in my previous life, an increased spend on long-term brand building activities to increase my share of voice and competitive advantage seems like a total luxury. And one that may now be afforded by brands by rethinking their short-term vs long-term focus.
Keep doing what you’re doing well
Like most of our clients, I feel strongly about keeping doing what you’re doing well currently. By this I mean sticking to your well thought out brand strategy and continuing to implement your brand plans and campaigns. Your core brand message likely hasn’t changed because of this crisis. There will be some exceptions with some brands who can no longer be experienced in the way they were intended. But for most brands your consumers value consistency, reassurance and continuity of brand message. After weeks on end of having the kids at home from school, I’m sure that the tagline ”Have a break…Have a Kit Kat!” resonates more than ever right now!
If we’re heading towards a recession with a cut in discretionary spending, chances are consumers are not choosing not to buy your product; they’re unable to. With that in mind, I urge brands to stick with what they know works well. Don’t throw your focus and budget into tactical activities that consumers might not respond to – because they financially can’t, it’s not that they don’t want to.
Show your true colours
The perhaps clichéd saying “with every cloud there’s a silver lining” has been demonstrated during the COVID-19 crisis more than ever. Even during the darkest of days in Italy, the heart-warming videos of residents playing music, clapping and ringing cowbells out of their apartments capture the raw emotion of the human spirit. We know that humans are lapping up feelings of warmth, generosity and even humour, as we are flooded with daily memes.
Increasing emotion and empathy within a campaign, done tactfully, will likely resonate well with consumers at this time. If these are attributes within your marketing message pre-crisis (bravo to you), focussing on these now will be even more genuine.
Put your money where your mouth is
I’ve been humming the tune “we’re all in this together” for weeks as it’s played more frequently and the sentiment is championed by more brands. It’s a lovely attitude and one we hope to be true but if you’re making big statements like this as a brand, be sure you’re walking the walk too.
My health fund, a not-for-profit business, is using this time to reinforce their “People before profits” tagline and walking the talk by freezing their annual price increase for this year.
Check on your competitors
I’m sure you’re already all over what’s going on in the marketplace and following what your competitors are up to, and I’d recommend continuing to closely monitor their activity regularly.
If you get wind that they’re decreasing marketing spend, now’s your time to shine. If you can maintain yours, you’ve got a great opportunity to increase your competitive advantage and your share of voice in the market. Especially as media costs fall, so in turn it costs you less to do so. Peter Field said, “You get this ability to maintain your share of voice for less money, which is a huge asset.”
When you cut back on your spending, your brand loses share of mind with your consumers and share of voice within the category. Peter Field stresses the increased cost of trying to regain share down the track, when your brand is less profitable and media costs rise. “It’s going to be very painful, and some brands never come out of that period,” he said. “If you can find the dollars to invest now, they will work much harder for you than they will in five quarters time.” (Five quarters being the usual time a recession lasts).
This is really one time I think that we can keep the short term the same, for long term gain.
“The coming months will test everyone – we are in uncharted territory. But this was much the same in 2008 and it was the brands that held their nerve – and share of voice – that bounced back strongly when recovery came.” – Renowned author, strategist and marketing consultant, Peter Field.