MENU WHAT WE’VE LEARNED (SO FAR) ABOUT ADVERTISING DURING A PANDEMIC AND RECESSION Can't Stop, Won't Stop By Emily Milhoan, May 26, 2020 // MARKETING [ABOUT AN 8 MIN READ] As the 2020 coronavirus outbreak created uncertainty across the world, companies and marketers have been bombarded with data. Stop advertising. Keep advertising. Advertising is cheaper. Advertising is skyrocketing. The contradictions go on and on, and the rapid information has created a mass of confusing clutter. Interpreting this data, determining its value, and deciding how to use it is imperative to advertising success as we come out into whatever comes next. Because when it comes to the so-called New Normal, you’ll want to be top of mind for your customers for their next purchase decision. A QUICK REFRESHER FROM PAST RECESSIONS The adage is correct: When times are good, you SHOULD advertise. When times are tough, you MUST advertise. Your decision to continue, slow, or stop spending will have many personal factors, but let’s look at what happened when ad spending in the U.S. dropped in past recessions. In the 1990-91 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40%, and McDonald’s sales declined by 28%. In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies covering 16 differing industries from 1980-1985. The results showed that business-to-business firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales from companies that were aggressive recession advertisers had risen 256% over those that didn’t keep up their advertising. WHAT THE 2020 DATA IS TELLING US How we shop has changed If this pandemic hit in 1980 or 2008, most shopping would have come to an abrupt halt as brick-and-mortar stores would have been forced to close and restaurants sealed dining rooms. But in 2020, the internet and mobile apps have changed the game. Forced stay-at-home orders, job losses, and pay reductions have meant many families have adapted how they shop, watching their spending habits and cutting corners like never before. Time will tell if families latch onto this new spending and saving or if they return to old habits — and we must keep an eye on these changes and adjust messaging and ad spend as necessary. But not everyone is impacted with job loss or pay reductions. In stark opposition, many consumers have shifted in the opposite direction. One study says that 43% of U.S. consumers have the same spending habits as they did prior to the pandemic. This can be attributed to the lack of entertainment options and being unable to spend on social activities and eating out. The appeal of the always-open ecommerce provides an endless draw of consumers who are still working and spending. In looking at total digital visits to an aggregate of Amazon, Walmart, and Target’s websites, the aggregate saw 779 million visits the week of March 9, 2020. This is the highest number of visits of any week in 2020 so far. Other online retailers are also seeing an increase, around 34% as reported by consumers year-over-year. 2020 Media consumption is at an all-time high Digital devices, social media, and online shopping has provided an infinite number of paths to engage your stay-at-home audience. These channels weren’t available in past recessions, and they provide a cheaper, quicker, more agile form of messaging for your brand. In fact, smart phone, laptop computer, tablet device, streaming TV, and gaming console usage has increased in all categories 11-76%. Data trends have shown that internet usage has increased 7.1% since the year prior. Unique mobile users have increased 2.5%. Even social media usage gets a boost, with an 8.7% increase in active social media users — that’s more than 304 million users. With little to do while stuck at home, consumers are watching 61% more connected TV or OTT (Over-the-Top) than years prior. Actual video streaming is up 12% since the start of COVID-19 stay-at-home measures. And we know that people are not single-device users. More than 50% of users use a smart device to shop while watching connected TV. Engaged audiences engaging daily in regular consumer habits and spending on products they know and trust. What this is telling us is that consumers are not turned off by advertising during this time of change. Generally, consumers agree that advertising should not stop and expect for companies to continue to message. WHAT COMPANIES ARE DOING NOW Using the data It’s important for brands to project the image of corporate stability during challenging times. As advertising sales decrease during a recession, the noise level in a brand’s product categories can drop when competitors cut back on their ad spend. When marketers cut back on ad spending, the brand loses its “share of voice” with consumers. This can lead to the potential of losing current and possibly future sales. Considering the increased consumer social media and digital presence, there are many opportunities to gain a competitive advantage, even in times of uncertainty. Capture the increased volume through OTT and OLV (Online Video) Cost efficiencies and lower CPMs are attractive to lower ad spend budgets Premium services like Hulu have the highest volume of Ad-Served Streaming Services Target the large volume of online activity through Programmatic and Native Content Don’t forget the marketing funnel and drive more consumers to your brand Display advertising helps provide rich audience data to inform paid search campaigns and increase the view-through rate Increase Paid Search budgets that gain more search inventory With correct audience targeting we can optimize and increase CTR% Capitalize on the increased inventory and spend a little more to gain impression share Explore Paid Social advertising through Facebook and Instagram There is a temporary 50% decrease on Paid Social Ads Cost per Click (CPC) For a low investment you can capture a targeted audience based on your audience’s profile More advertisers are focusing on organic social posts. Using as little as $100 a month, you can “promote” your higher performing socials posts to increase awareness or gain new followers. Getting the message right The right medium is one thing. But, the value in advertising during this type of recession can only exist if companies choose a message of relevancy. Many businesses continuing to advertise during the COVID-19 pandemic have almost universally used the “We’re All in This Together” message with somber music, passing pictures of doctors, people hugging, and babies. Recently, Ad Age put together a supercut montage from a number of brands including Apple, Budweiser, Chick-fil-A, Facebook, FedEx, Hyundai, Lincoln, Mazda, and many more. Advertisers can be most appealing by sharing that the quality of their product, service, or value is most appropriate and connected to their customers’ current situation. Let’s look at some messages that hit home without mirroring the “togetherness” landscape. Wendy’s “Free Nugs not Hugs” The message? Simple. Get free nuggets. This one-day promotion drove business to storefronts when social distancing efforts closed dining rooms. As of April 29, Wendy’s stock was up 5.3%. Source Why does it work? This message nods to the current situation of social distancing in a cheeky way. We can’t hug, so why not get free nugs? It’s a simple way to improve your customers’ situation. Oscar Mayer’s “Front Yard Cookout” The message? Oscar Mayer’s social media campaign called on their fans to join them in the first-ever Front Yard Cookout, where communities can be together, even when apart. Oscar Mayer asked consumers to snap a photo of their socially distant cookout and share on Twitter. Each social share using the hashtag #FrontYardCookout donated one additional meal to Feeding America on top of Oscar Mayer’s 1 million meal commitment. Source Why does it work? Even as businesses begin to open, the spring/summer cookout stands to be threatened. Bringing the fun to the front yard is a simple change that provides an attainable relief to quarantine. Even more successful is the idea that you make a difference with your participation since Oscar Mayer will donate an additional meal for each hashtag. Hush Puppies “Anyone’s Grandparents” The message? While supplies lasted, Hush Puppies asked consumers to send a FREE pair of Power Walker shoes to their favorite senior. While they’d much prefer an in-person meeting or hug, a pair of comfortable, free shoes might be the next best thing. Source Why does it work? The older adult population was lonely and isolated prior to the pandemic, and according to the National Academies of Sciences, Engineering, and Medicine, “Strong evidence suggest that many older adults are socially isolated in or lonely in ways that puts their health at risk.” With a niche product, Hush Puppies played to our heartstrings and offered a relevant service to those in need. Remember your target audience is juggling tough decisions in between video conference calls, getting curbside takeout, and streaming new TV shows. You can’t stop advertising — you shouldn’t stop advertising. Choose wisely so you maximize your impact, your message, and your budget. All of this will make sure your brand is top of mind AND relevant when consumers make the final leap to purchase. FACEBOOK TWITTER PINTEREST LINKEDIN AUTHOR EMILY MILHOAN Since 2005, Emily Milhoan has used complex data analytic targeting to better understand client audiences and inform strategic media plans. Her political work strengthened campaigns for Statehouse, Congressional, Gubernatorial, and Presidential candidates, as well as Issue and Advocacy clients. As she expanded into the non-political landscape, Emily has innovated ways to reach audiences. By creating custom media solutions, her team has delivered real-time strategy results to clients such as Hills Bros. 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