We’ve seen a pullback in TV ad spend across a number of consumer categories. Some are quite understandable, such as travel, restaurants and movies. Some are a bit surprising, like automotive. But one is absolutely perplexing: soft drinks.
MediaPost reported that TV ad spend in April by automakers was down 71%. Similarly, according to another report, soda advertisers spent 78% less on national TV ads between March 16 and April 26.
Why cut back so much? For sure, companies faced sales challenges in this terrible crisis, but those cuts were only in the tens of millions of dollars in categories where annual sales in the U.S. are measured as portions of trillions of dollars and single point share gains in billions.
As reported in both stories, the primary reason for the cuts was the loss of live sports programming on TV, where companies had planned to run their ads.
What gives? It’s not as if people aren’t buying lots of soft drinks these days, like the hundreds of millions of Americans sheltering in place at home. Milk consumption alone is up 40% year over year.
In fact, this is probably the best time in history for a soft drink company to take market share through advertising. Daily, hundreds of millions of consumers in the U.S. are buying beverages in grocery stores, from delivery services and online shopping sources — and faced with much more brand choice than normal, since most of the restaurants, theaters and stadiums where they can’t go now had exclusive deals with just one or two brands.
Yes, losing live sports puts marketers in a quandary, but many of them have put alternatives in place. When one financial securities firm lost its NCAA March Madness and NBA buys, its agency immediately redeployed the marketers’ ad spend in data-driven linear TV ad buys targeted to the same sports viewers in other programming across dozens of national TV networks.
Company strategists knew the lack of sports content wasn’t keeping sports viewers away from TV. Their data showed those target sports viewers were watching more TV than ever, just different types of programming.
Advertisers should fall in love with their customers and their problems, not just some of the content that they like to watch.
Don’t get me wrong. I’m a huge fan of sports on TV. It’s great to watch and a super strong place to advertise. But, when it comes to sustaining and growing your business, you have to have contingency plans. Plus, sports advertising is really expensive. Brands that advertise on sports programming should have back-up plans, if for no reason other than price negotiation.
Maybe all those spending cuts weren’t really about lack of sports programming, but about saving money? We know the drill. Media director gives money back to corporate; looks good to boss.
We also know that too much of the corporate marketing world works this way, which is why most large U.S. consumer brands have a growth problem. They stopped investing in growing their brand to grow their sales.
What I know for certain is that people will drinks lots of soft drinks later this year, next year and the next. Those who are able to effectively grow their brands’ mental availability among target customers in this time (thank you, marketing expert Byron Sharp) will grow their sales and own more of those consumers. Those who don’t, won’t.
What do you think?
Dave Morgan, a lawyer by training, is the CEO and founder of Simulmedia. He previously founded and ran both TACODA, Inc, an online advertising company that pioneered behavioural online marketing and was acquired by AOL in 2007 for $275 million, and Real Media, Inc, one of the world’s first ad serving and online ad network companies and a predecessor to 24/7 Real Media (TFSM), which was later sold to WPP for $649 million. Follow him on Twitter @davemorgannyc
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