What Will the Post-Pandemic Advertising World Look Like?
Business is changing but there’s more to come for the advertising industry
The coronavirus has dominated global news channels due to the seismic impact it's having on every industry. Daily predictions soon become outdated as the crisis unfolds before our eyes, in real-time.
The true economic impact is not entirely clear, but early signs indicate that no industry will emerge unchanged.
There’s an air of uncertainty due to the magnitude of disruption. Rapid adjustment means it’s hard to estimate how severe the implications of Covid-19 will have on the marketing industry or any industry, but historically advertising lags out of a recession, with a few shining stars that break the mold.
So what is happening in the advertising industry and what may lie ahead?
Spending Cuts
Advertising spend has “fallen off a cliff” according to some sources, due to the uncertainty brought on during lockdown. It paralyzed consumer spending. Depending on what you read, the looming recession means that many are bracing themselves for the worst possible outcome.
A few weeks ago a V-shaped bounce was a popularly held belief, a swift market rebound was forecasted. It was expected that pent-up consumer demand would create a spike in spending as consumers have cash at hand, unlike 2008.
In reality, the longer uncertainty lingers, the longer the recovery will be.
Past examples
There are dozens of well-researched case studies about brands that maintained advertising spend in a recession, emerging stronger in the aftermath. This argument still holds true.
For instance, during the last recession, Cadbury continued to advertise rather than switching to discounted promotions. This strategy helped them to regain market share from their competitors, who did the opposite.
Lots of advertising budgets are understandably on hold.
In the 1920s, “Post was the category leader” in the ready-to-eat cereal space. During the Great Depression, “Post cut back” on advertising and their rival Kellogg’s doubled their “advertising spend, investing heavily in radio” while introducing “a new cereal called Rice Krispies.” Kellogg’s “profits grew by 30% and the company became the category leader.”
Maintaining advertising spend during a recession is considered to be a smart move over the long term. There is one problem, the recession is not here yet. Pandemic-management is still ongoing, life preservation is lapping up billions in liquidity, so a recession is very much guaranteed in the near future.
On that note, now is a perfect time to plan and create future campaigns.
Industry noise about spending in a recession does have a self-preservation undertone, but there’s plenty of evidence to back this up.
For now, marketers are carefully trying not to seem emotionally-bankrupt in the glare of a much bigger crisis. So, paralysis by analysis is having an effect.
Companies are also preserving the cash they have, so they aren’t spending as much on advertising if any. This fear-driven response is not a very creative measure to ensure that they stay afloat.
To be fair, consumers cannot physically buy some brands, and others are experiencing fulfillment issues. So stimulating demand doesn't make commercial sense for certain brands.
Cash preservation is key but equally a double-edged sword.
In the short-term, sales channels are the primary focus for brands that can sell, mostly online. Marketing spend is therefore discretionary or is on pause. Although advertising is the aggregator that fills the sales funnel, so without it sales will run dry eventually.
Companies that absorbed a huge decline in sales had no option but to redistribute advertising budgets, an unfortunate necessity.
That said, brands should explore creative ways to advertise now in order to excite purchase intent before normality resumes. What will the new normal look like? Who knows, but consumers are willing to buy, it’s what we do.
Relevance
Relevancy is another consideration. This determines when a brand campaign should go live or not. Timing being the keystone, based on consumer insights and social feedback.
Brands also have to evaluate if existing campaigns are still relevant or insensitive in light of the global situation. These are some of the potential pitfalls that marketing teams need to consider to avoid brand damage. If the message is wrong, refreshment is called for.
Businesses have been criticized for opportunism too. Aligning brand extensions to tap into popular trends like social distancing is a bad move. Likewise is seeking government support to pay furloughed employees when the brand or owner has plenty of cash on reserve.
The most important thing now is to do right by your employees.
People don’t forget and consumers can be unforgiving. They will remember brands that sought to exploit and profit at a time of crisis, “it’s morally repulsive.” Be warned, those that do behave socially irresponsible will be punished. To what extent is hard to predict.
On the flip side, customers will remember brands that pivoted, adjusting quickly for the common good. Shifting from luxury goods production to manufacture masks, sanitizers, or gloves. So there is unsaid loyalty bubbling away that will be ripe to harvest soon.
While this is still opportunism, the sentiment is much different. Particularly if such brands don't create campaigns to shout about what they’re doing for humanity. At least not now. This is a story for another day.
Content
Creative content has transitioned in the last few weeks. Initially, there was residual confusion as some companies allowed campaigns to run as normal. There was no knee-jerk reaction to pull ads, which is understandable given the unknowns. Also, many were probably under contract so pulling adds was a waste of money.
Lately, ad campaigns are more informative, advising the public about the practical steps that a brand or company is taking for public safety.
In the weeks ahead it's likely that advertising campaigns will be simple, more refined, polished, and emotive. Gratitude will be expressed with epic drone shots — the thank you campaign is upon us — many are already underway to retain brand positioning if nothing else.
The problem with this is that all brands will sound, look, and feel the same. Differentiation is lost in translation.
Digital harvesting
Before Covid-19, one of the biggest changes to face the advertising industry was Google’s notice to “phase-out third-party cookies.” This will come into effect in January 2022. Some brands have requested that Google delay this inevitable change, but this is very unlikely.
Obviously Google will still win, removing third-party cookies from Chrome means that advertisers will need to use Google’s data analytics (GA) more. While GA is already used industrywide, the same arbiter will remain, Google.
The impact could mean that the free version of GA will be leaner, pushing users to invest in Google 360, the paid version of their analytics tool with more enhanced functionality. In fact, Google may unlock tiers of the tool to fit a wider selection of budgets.
This is good for Google.
However, cookie-blocking may not be a bad thing for advertisers as it will force industry players to unlock audience behavior by investing in data lakes to enrich consumer insights.
In return, brands can improve audience-based buying, cash generation conversions as opposed to just impressions.
The right product at the right time will win in the end.
When change does arrive, those with loyal subscribers will do well. In fact, direct deals between brands, agencies, and publishers, will spring up strategically to harness shared audience traffic.
When cookies are gobbled up by Google, agency relationships will strengthen to solve complex problems for brands. This will create an opportunity for consultative type services so brands can navigate the new world.
Brands have sweated the cookie-based model for years, building loose databases that fed campaign targeting. In time this will be no longer. Rich measurement and sales attribution, while more challenging in a cookie-free world, will be more relevant and better in the long run for all parties. Also, it will be a valuable asset.
Final Thoughts
To recap, there are five key recommendations that brands should adopt as we emerge from the global crisis and beyond.
№1 — Content: Your brand message should be relevant, not completely ignoring the current global events, but doing so with a customer-friendly undertone and a valid reason to promote, if at all.
№2— Tone of voice: Brands should adjust ‘tone of voice’ to express gratitude, recognizing customer business, past, present, and future. Sharing steps the business has put in place in the interest of public safety will benefit brand positioning in the short-term as opposed to a hard sales pitch or promotion, which is unlikely to be well received. Not just yet.
№3— Differentiate: Highly creative imagery, a memorable tagline, and emotive video content resonate with consumers on a deeper level while improving recall. So gratuitous messages are a step in the right direction to ease back into the homes and phones of the customer.
№4— Timing: This involves a degree of tact with respect to 1–3 above. As economies reopen advert timing is crucial to ensure that a brand is in front of the target audience in what is likely to be a less-noisy arena. Being out there early means that the brand-tone will be heard.
№5— Future planning: With digital and post-pandemic changes very likely in late 2020 and beyond, investing in a brand's data lake should not be considered a cost, rather an asset to nurture. Think of it as the fountain of youth that belongs to the brand, always giving birth to new revenue opportunities. One that must be developed as a priority, as search engines have zero control over this.
To conclude, releasing advertising funds for campaign refreshment and digital innovation is a powerful strategy that brands should not overlook.
Advertisers have a vital role to play to jump-start the global economy.
There are opportunities out there for brands to seize, so unlock the purse-strings.
