PETER FIELD ON WHY IT’S IMPORTANT TO KEEP ADVERTISING DURING A DOWNTURN

23. 4. 2020
Source: GettyImages.com
FOREIGN NEWS LONG READ NEWS TRENDS
There have been many warnings, often from anxious advertising agencies, about the danger of brands “going dark” during the COVID crisis, but British researcher Peter Field provided evidence-based analysis of why it’s imperative they heed that advice during a thinktv Canada webinar this week.

Field, the so-called “Godfather of effectiveness,” provided an update to his highly regarded study Advertising In a Downturn, which used the Institute of Practitioners in Advertising (IPA) case study database to provide insight about how brands coped with the global recession in 2008-09.

The original study determined that switching off advertising in response to an economic crisis poses a significant risk that can take up to five years for brands to recover from, all while experiencing a “major loss” of profit.

“Do not panic… and particularly don’t go dark,” he said on Tuesday. “You will regret it at great length.”

Field’s presentation also addressed one of the topics sure to appear on his greatest hits album: the tendency by brands to revert to short-term promotional strategies at the expense of long-term brand-building, particularly during a downturn.

It’s a tactic that ultimately leads to dependency, he said, since it establishes a consumer expectation that a brand’s products will always be discounted and promoted. “It’s very difficult to claw your way back from those expectations,” he said.

While comparisons with the 2008-09 recession are inevitable, Field said the current COVID crisis is markedly different—particularly in regards to the “enormous” polarization between categories deemed essential (grocery, toilet paper) and non-essential (basically everything else).

It has also led to what Field calls a very “lucky minority” of highly scalable businesses that are seeing growth through their ability to cater to homebound consumers. Zoom, for example, has seen its active user base explode from 10 million pre-COVID to 200 million during the working-from-home period.

While the economic decline is expected to be deep, he cited a recent report from the Harvard Business Review noting that the recovery from economic downturns created by major global health crises—from the 1958 Asian Flu to SARS in 2002—has been “V” shaped. “You get a lot of pent-up demand, and the up-tick side is at least as steep as the down-side,” he said.

Here are some of the other key takeaways from Field’s presentation:

Focus on the long-term


One of the most visible shifts in U.K. marketing during the 2008-09 recession was a sharp downturn in investment in long-term brand building efforts—in some cases by as much as 15-20%—while investment in short-term digital media, with its emphasis on activation, increased by roughly the same amount.

While IPA data suggests a 50/50 split between branding and short-term promotion/activation might have worked in 2008-09, Field said that many businesses today are already investing less than half of their marketing budget on brand-building, and there is no business case to be made for diverting more of their budget towards activation.

“A recession is no time to abandon the brand, because brand-building is what is going to see you through recovery,” said Field. “If you’re not doing it, you’re going to get kicked where it hurts.”

Marketing at a time when sales are down can help safeguard brands, said Field, “Brand-building is not all about now,” he said. “It’s about ensuring that next year’s sales targets are easier to achieve than this year’s.”

Make sure you’re being heard


Field stressed that maintaining or even increasing share of voice (SOV) during a downturn is “extremely important” in helping brands recover profitability, noting the strong correlation between SOV and stable market share.

“You’re trading a big long-term benefit for a small short-term gain,” he said. “If [reducing share of voice] is not about survivability—companies in the travel sector, for example, don’t need to be spending at the moment—it doesn’t make sense,” he said, calling SOV the single most important metric brands should monitor during the downturn.

The imperative for brands during a recession, he said, is to ensure that their share of voice doesn’t fall below their share of market. “I know there are people out there who question the validity of that rule, but there are flat earthers in almost any area of science,” he said. “This is a well-proven rule.”

The good thing about this approach, he said, is that acquiring that share of voice will cost brands less during a recession because a) their competitors are likely reducing their spend and b) media costs will fall. “You get this ability to maintain your share of voice for less money, which is a huge asset,” he said.

Rebuilding lost share of voice during the recovery period will be much more costly, he said, since the brand will be less profitable, media rates will have risen, and multiple brands will all be vying for attention. “It’s going to be very painful, and some brands never come out of that period,” he said.

Seize your market opportunity


P&G has already signalled its intention to maintain its advertising during the current crisis, and will “almost certainly” see dramatically increased share of voice, even without increasing investment, said Field.
“You may not think a recession is a time of sunshine, but if you’ve got the resources and you hold your nerve, it’s a great time.”

Field said that viewing of linear TV, one of the premiere brand-building media sources, is skyrocketing among homebound consumers.

Analyzing the IPA database, Field then divided brands into three segments: “cutters” (brands that reduced spend), “hangers-on” (brands that maintained ) and “opportunists” who invested more in their marketing.

The analysis found that opportunists enjoyed five times as many very large business effects as cutters (2.1 versus 0.4), 4.5 times more annual market share growth and “widespread” strong profitability growth during the recovery period versus none for under-investors, while the benefits of investment grew strongly during recession compared to normal times and the penalties of under-investment worsened significantly.
“If you can find the dollars to invest now, they will work much harder for you than they will in five quarters time,” said Field.

Demonstrate humanity


The current mood of society during the COVID crisis is “solidarity in adversity,” said Field, and advertising that reflects this mindset will strike a chord with consumers.

That is being manifested by brands abandoning their typical brand advertising in favour of messaging that directly addresses the COVID crisis, although he notes that this is leading to ads that look more and more alike and are therefore unlikely to have much effect.

Field says that studies suggest that ads about humanity and community are performing better than those that focus on self, self-image and performance. “People turn to those softer human values and they want advertising that reflects that,” said Field.

However, Field said that there is no need to completely abandon an existing brand campaign (unless it’s wildly inappropriate, of course) and certainly no need for all advertising to be deadly serious and somber. “People want people who can bring them messages of hope and enthusiasm and encouragement, done in a sensitive way.”

Source: the-message.ca
Loading more ...