[PARTNER CONTENT] What affect will COVID-19 have on advertising? Will budgets be cut? Will budgets be reallocated to later this year? How are brands adjusting their media plans to sell products and maintain market share?
The logical assumptions on what impact COVID-19 will have on advertising may seem to be obvious at first glance.
TV and online digital should benefit, as news hungry people will be spending more time at home. The global ban on sporting events is a huge disappointment for sports obsessed South Africans resulting in a challenge to reach this male-dominated demographic. Streaming services will attract bigger audiences.
With restrictions on movement and gatherings, categories like events, cinema, OOH and radio will take a knock. This means less drive-time chaos on our roads, but people will still have to shop and go about their business. The flexibility of DOOH will certainly come into play now. Advertisers can create new adverts cost effectively and they can run numerous creative changes throughout the day.
One of the worst mistakes brands can make is to quarantine their marketing and media plans. The effort required to reestablish market share and brand equity will take way longer than the cuts or reallocations in the short-term.
Consumers need reassurance and comfort during times of crisis. They need to know that their trusted brands are still around and that they will be there for them in times of need.
Messaging must sensitive during times like these. Brands cannot take advantage by pushing offers to consumers with lines such as ‘Take advantage of these killer deals’ or ‘Prices so low stock is flying off the shelves’.
History shows that brands that advertised during times of crisis came out stronger in the end with greater brand empathy and market share.
Here are some examples
Post was the category leader in dry cereal in the 1920s, but cut their advertising budgets significantly during the Great Depression. Rival Kellogg’s doubled their ad spend and introduced a new cereal called Rice Krispies featuring ‘Snap Crackle and Pop’. Kellogg’s profit grew by 30% and the company became the category leader, a position it has maintained for decades.
During a 17-month recession in the US between 1973-1975, which was triggered by an energy crisis, the car market became very aware of fuel efficiency. Toyota was experiencing strong sales when the economic downturn hit, and the temptation was to reduce their advertising budget, which they resisted. By adhering to its long-term strategy, Toyota surpassed Volkswagen as the top imported carmaker in the U.S. by 1976.
In the 1990-1991 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to reduce its advertising budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.
Companies can also increase brand empathy during times of crisis. Pick n Pay’s recent media announcement is spot on. With social distancing and panic buying taking place, the elderly need assistance and Pick n Pay came up with a solution. People over 65 years old will have exclusive access to Pick n Pay stores between 7am and 8am every morning – brilliant! Pick n Pay’s empathy and compassion will remain close to our hearts long after COVID-19 has passed.
Meanwhile, Relativ Media remains open for business while implementing social distancing and working from home. Together, we can beat this.
