Is your brand on lockdown?
Friday, 21 January 2022
With COVID-19 leaving brands entering unchartered waters, it raises many questions for marketers.
As consumers and businesses adjusted to an extended enforced lockdown they were left coming to terms with what might be considered the new norm in both the short-term and perhaps just that bit longer.
Self-isolation and a period of lockdown has helped reduce the spread of the coronavirus and ‘flatten the curve’ to give the NHS and those within healthcare a fighting chance as government attempted to prevent resources being swamped and a potential meltdown on the frontline.
At the same time many brands have been faced with an impossible scenario. Customers have disappeared overnight and advertising and marketing budgets have also been cut. For many in industries such as foodservice and retail, the consequences have already been catastrophic and the final nail in the coffin after two to three years of strained market conditions following the uncertainty surrounding Brexit and its subsequent effect on consumer confidence.
Brands biting the dust
Oasis and Warehouse were tipped into administration by the pandemic, joining Laura Ashley and Debenhams among the big household names to go early on. When Carluccio’s became the first main casualty of the dining sector at the end of March following the compulsory closure of restaurants, pubs and bars, it was swiftly followed by TRG’s Mexican chain Chiquito. Since then, the Casual Dining Group, which owns Bella Italia and Café Rouge, has filed a notice of intention to appoint administrators and is exploring options for sale.
Figures from The Office for National Statistics (ONS) show a quarter of businesses paused trading as a result of the coronavirus outbreak, while a further 41% said they would be "reducing staff levels in the short term" in response to the virus. The Business Impact of Coronavirus Survey of 5,316 UK firms also revealed that 38% said turnover was "substantially lower than normal”.
‘Wrecking ball’ for retail
If that trend continues and businesses can’t make-up for the shortfall in in-store retail and foodservice sales, it’s possible the landscape may have already changed forever. Figures from CGA AlixPartners published in the Guardian suggest that the coronavirus ‘wrecking ball’ may see 30,000 pubs and restaurants disappear.
As you might expect, initial reactions to the coronavirus outbreak saw many brands looking very carefully at campaign spend and future brand direction.
One of the first indications of this came via Marketing Week and Econsultancy who conducted a study looking at the sentiment out there just before the UK went into lockdown. Results showed that more than half (55%) of businesses were laying down plans to either delay or review campaigns, while 60% admitted that they would be pausing or reviewing budget commitments for the time-being.
Brands pausing for thought
Another survey from Advertiser Perceptions lends weight to this. Almost half of advertisers (45%) surveyed indicated that they had either stopped or pulled a campaign ‘mid-flight’ because of the novel coronavirus.
Furthermore, with nearly nine in ten advertisers taking action around ad budgets, 38% said they would pause any new advertising efforts until later in the year, while over a third said they were cancelling campaigns completely pre-launch.
In many respects such pauses are wise and give brands time to gauge public sentiment and get a sense of how their landscape and audience is shifting in response to the problem. After all, narratives and messaging must be adjusted accordingly. Brands that simply carry on oblivious risk alienating the very customers they are seeking to engage with.
Don’t turn out the lights
These trends are expected to lead to a 31% fall in global ad budgets for the year, according to the World Federation of Advertisers (WFA) Covid-19 Response Tracker.
Those surveyed said that while they would be making dramatic cuts to overall spend, 62% agreed that it was for critical brands not “to go dark” during the crisis.
However, nearly all respondents to that survey agree that this will have long-term implications for the industry, but 84% of those questioned believe that it also presents an ‘opportunity to rethink everything in terms of our marketing organisation’, with the same number revealing the pandemic has already accelerated digital transformation.
Yet, just 8% of consumers think brands should stop advertising due to the coronavirus outbreak, according to a recent survey of 35,000 consumers by Kantar. Instead, what they do want is help in their day-to-day lives, with 78% of those questioned suggesting brands should find a way of doing this. However, 74% were clear that businesses shouldn’t exploit the crisis, whilst admitting that they wanted to see ‘explicit evidence’ of brands supporting their staff, the government and consumers.
But for those companies thinking of cutting marketing budget or cancelling advertising campaigns, there’s danger ahead, according to Jane Ostler, global head of media at Kantar Insights.
“Brand health becomes vulnerable when companies stop advertising,” she warns. “If they do this for longer than six months it destroys both short- and long-term health.”
Dangers to brand health
Matt O’Grady, Global Commercial President, Nielsen Media, agrees.
“Whilst in the short term a reduction in advertising spend will mean a drop in expenditure, it will affect a brand’s resilience,” he says.
For further clarification, Kantar ran a theoretical test on an unnamed beer brand to quantify the long-term damage of advertising cuts. This revealed that a total cut in ad spend during the crisis would result in a 13% impact on sales in the long run, making market share hard to recover. Here’s the interesting bit though: a 50% drop in advertising spend would mean just a 1% drop in sales.
TV and brand loyalty
Historically, TV has always been a great way for businesses to build brand loyalty, but now marketers must reduce spend whilst continuing to engage buyers.
At the same time, this is all happening against the backdrop of two key trends, says O’Grady: “An increase in media consumption and a decrease in advertising spend.”
He believes that the lockdown could end up seeing a 60% increase in the amount of video content consumed globally. And although countries are at varied stages in response to COVID-19, time spent per viewer has risen rapidly in the space of just a few months.
TV Engagement per person for 25 countries during COVID-19:
Has homeworking killed prime time TV?
O’Grady offers some interesting perspectives on how marketers might pivot in relation to this and best serve changes in engagement and demographics served. Take prime time TV for example. With people working from home and the working week having evolved completely in many households, has this window and captive audience shifted? Does it even exist anymore?
To hold the attention of consumers for longer periods of TV engagement he suggests thinking local with strategies that can reach individual areas, use different demographic splits and provide new areas of interest.
As viewing times shift, content needs to be considerate of a flexible primetime period whilst verifying the types of content consumers are hungry for, he says.
Content strategy: football and NASCAR offer new twists
During lockdown sport has been one of the TV areas that has suffered the most in terms of cancelled competitions and empty stadiums. That, in turn, has left broadcasters having to fill a huge void. As a result, there have been several clever twists on the repurposing of existing content.
In the UK, we’ve seen re-runs of classic FA Cup Finals and new analysis of old games from the BBC Match of the Day team. Over on ITV, those in charge decided that three weeks of nostalgia in the form of Euro 96 would part fill the void by allowing fans to go back in time and relive some of the best matches from one of modern football’s greatest tournaments.
That culminated with Channel 4’s replay of the 1966 World Cup Final between England and Germany, which – as well as showing the full game in black and white – had cutaway analysis and adapted content from Sir Geoff Hurst and other pundits in colour to deliver a new and unique take on the game’s proceedings.
In the US, NASCAR tried something completely different with the iRacing Pro Series that included featuring virtual driver-crew chief meetings on NASCAR.com and its social channels ahead of the main virtual event featuring live, professional racers. These drew in over a million viewers per week and enabled some teams to secure additional sponsorship whilst in lockdown during virtual drive time.
Gesture pays off for DoubleTree
That’s one way to keep an audience. But there are others. And for some brands these have been born out of necessity. Consider the approach taken by DoubleTree, the American hotel chain owned by Hilton.
Shorn of its customers and regular guests, the hotel chain decided to harness the power of content marketing and give away a corporate secret that it had closely guarded for a generation.
The hotel is famous for its warm chocolate chip cookie welcome served up for guests upon arrival, with copycat recipes having been shared online for years. But in a nod to its loyal customer base it decided to reveal the recipe so that bakers could recreate the warm, welcoming treat at home.
As Shawn McAteer, senior vice president and global head, DoubleTree by Hilton, puts it, “A warm chocolate chip cookie can’t solve everything, but it can bring a moment of comfort and happiness.”
Maintaining the brand connection
For DoubleTree it bought a lot of goodwill from fans that loved the gesture and subsequently began sharing their baking efforts on social media. The media liked it too. Numerous outlets covered the story and the video has already racked up more than half a million views so far. Moreover, at a time when most people are unable to travel and its doors are closed it has enable consumers to maintain a connection with the brand. How valuable will that be? Only time will tell, but it certainly sets the right tone for the brand going forward and people have long memories.
Remaining true to your brand story
Perhaps not unexpectedly, another brand to show off that it perfectly understood the mood and moment was Nike. Its ad urged the public to take social distancing seriously whilst staying at home: ‘If you ever dreamed of playing for millions around the world, now is your chance. Play inside, play for the world.’
That ad was then reposted by the likes of Christiano Ronaldo, LeBron James and Michael Jordan with the hashtags #playinside and #playfortheworld.
Now, not all businesses have the global sway or following of Nike, but the idea of brands using their expertise and influence to help others is something that will continue to translate well for companies of varying sizes during the pandemic and beyond.
In this instance Nike has remained true to its brand story but taken the role of PSA disseminator to amplify wider government and health guidelines. ‘Play inside’ also fosters the sense of community and whilst treating Nike’s audience as part of the team – something the brand was then easily able to amplify by encouraging people to share their stories on Twitter and Instagram.
O’Grady believes that those brands reexamining advertising messaging around brand loyalty advertising can also build a steady stream of customers.
Brand Empathy during Covid-19
“Showing that your brand is making an impact in the community or demonstrating new ways to use your products could increase your customer adoption in the long term,” he says.
O’Grady cites the response of airlines partnering with local governments in helping people to return home in addition to changing cancellation policies and the movement of flights and extension of loyalty program benefits during the crisis.
In the UK, Morrisons changed its core brand purpose to ‘feed the nation’, as the supermarket chain sought to provide reassurance to customers during the pandemic whilst setting up a hardship fund employees at the same time.
“The company has paid a lot of attention to its core purpose,” explains chief executive, David Potts. “It isn’t what they do or how they do it, it’s why a company exists and we currently believe the biggest contribution we can make in the country is playing our full part in feeding the nation.”
Similarly Pret a Manger showed its support for key workers by announcing free hot drinks for all NHS staff and increasing their NHS discount to 50%.
“Dear NHS workers, your hot drinks are on the house from today, and we’ll take 50% off everything else,” said the firm in a tweet.
Forming emotional connections
Finding an emotional connection with customers is key and brands leading with empathy will find consumers keen to hear human stories from those that are socially conscious.
By reminding customers that you understand the challenges they face and are socially responsible, you are letting them know that community and a wider thinking about the health of their ecosystem sits at the heart of your brand values over sales-oriented marketing campaigns chasing the quick buck.
Go too far and you can get it wrong though. When YouGov asked the British public how they felt about brand communications during the pandemic, it appears many had overstepped the mark with ‘unoriginal messaging and creative’.
Covid Comms: brand authenticity is key
Their research revealed that more than half (51%) believe brands are over communicating, with 43% believing that current messages and advertising were ‘inauthentic’.
Widely used phrases such ‘all in this together’ and ‘the new normal’ were falling on deaf ears, with over two thirds (69%) agreeing that messages were too similar and lacking authenticity.
Clearly, there is much to digest. Covid-19 has forced nearly all businesses to reevaluate both marketing materials and strategy, but with digital consumption at an all time high the audience is there.
However, with people spending more time online consumers everywhere are becoming more ‘net-savvy’ and scrutinizing brand communications and partners ever more closely.
Yet, the Kantar figures confirm that consumers do expect brands to keep advertising and that will be crucial post pandemic.
Back in the ‘80s, a McGraw-Hill study of 600 businesses undertaken between 1980 and 1985 revealed that those who maintained or increased their advertising spend during the 81-82 recession saw significantly higher returns following economic recovery. However, those aggressively marketing during the recession had sales 256% higher than those that cut advertising.
None other than Henry Ford once said: “Stopping advertising to save money is like stopping your watch to save time.”
Further evidence of this comes from the financial crisis of 2008, where additional analysis from Kantar and BrandZ revealed that strong brands recovered nine times faster then the S&P 500 standard.
That’s because when thoughts turn to recession, short-termism can often takeover. Often, businesses begin to focus on preserving cash flow and making cuts in order to present investors and boards with quick returns.
source: brands in a pandemic world
Advertising in a recession: what the data tells us
However, by refocusing brand strategy now and thinking long-term, brands can provide more fertile ground for increasing market share in the future, explains Mark Ritson.
“Confronted with a 50% cut in marketing budgets, the smarter play is to actually focus more of it on the longer-term brand-building mission. Performance marketing is going to under-perform in the current market conditions,” he says. “But this virus, too, shall pass … Keep the brand light burning, because the cost of snuffing it out for the rest of 2020 and then trying to reignite it next year is gigantic.”
Furthermore, cutting back on marketing means you’ll lose share of voice (SOV) and potentially hand the advantage to competitors at a time when you could be saving on investment there anyway.
Back in 2008, the Institute of Practitioners in Advertising (IPA) Report added further weight to this argument, when it confirmed: “It is better to maintain SOV (share of voice) at or above SOM (share of market) during a downturn: the longer-term improvement in profitability is likely to greatly outweigh the short-term reduction.”
source: advertising in a downturn
The future for brand communications
While all the data is telling us that silence isn’t golden, it does come with a note of caution. This most definitely isn’t the time to be tone deaf or opportunistic.
In the current climate it’s not just about what you say, but how you say it too. Brand storytelling and communications must be relevant and culturally appropriate. Moreover, authenticity and empathy must sit at the heart of everything you do, as consumers need to be able to relate to brands that serve them more than ever. Future brand loyalty will come to those investing in this for the long term, as well as those investing in community and partnerships.
Right now, leadership and a clear perspective are also crucial, as are clear USPs and brand stories that cut through the noise. Tighten your brand strategy and look at how you can turn problems into opportunities whilst putting the customer first.
Good data and analytics can help to inform you and lead you towards better decisions, so begin by ascertaining what data you already have access to and what you may need to consider outsourcing to fill the gaps. That will help you to adapt your existing strategy and content to the challenges ahead to ensure you remain relevant. After all, COVID-19 has affected brand audiences in different ways.
One thing is certain: as digital transformation intensifies, you’ll certainly be challenged to innovate and evolve even further during the coming months. While that shift has been happening for some time, the pandemic has certainly seen a surge in the use of mobile, laptop and tablet use. As a result, many businesses have been forced to quickly adapt to mobile- and video-first strategies for digital marketing, as virtual ‘Zoom’ meetings and online events become an intrinsic part of our working lives. Consider the different ways these allow you to pivot and how they can improve customer communications, ‘touch points’ and support. What new things are they telling you about your customers and what additional services or value-adds do they enable you to offer? Change is the new constant. You can rely on that. Yet brands have to try and remain true to their purpose and values.
Unsurprisingly, the best place to start with that is ‘story’. Think carefully about that. Ensure your brand narrative reflects where you are and where you want to go as a business, using data driven insights to help you craft it where necessary. Use it to reassure your audience and maintain an active online presence while taking the time to analyse content performance and balance this with your consumer’s emotional needs. Your story is your most powerful ally. It’s what makes you unique. Make sure it speaks to your audience.