Late last year, we were all freaking out about the next possible recession when the yield curve for US Treasury bonds inverted – one of the first signs that an economy is shrinking. Now in 2020, with the most unexpected turn of events due to the coronavirus pandemic, we have actually found ourselves in an economic recession. Businesses across every industry and around the world have been forced to halt operations amid the COVID-19 outbreak – with the travel/tourism and quick service restaurant (QSR) sectors hit the hardest. In the advertising industry, many marketers and clients have had to pause or cancel PR and media activities, risking huge loss of brand equity. The question on every company’s mind now is, “To advertise or not to advertise?”. Experts in the field – including specialists from Kantar Group and Havas Media – believe that brands ‘need to keep the marketing lights on’ and ‘use this time to reinforce consumer relationships.’ Here’s why:
The COVID Recession is ‘far from a typical downturn’
In June 2020, the National Bureau of Economic Research (NBER) officially designated the past two quarters of the US economy as a recession. However, many economists and experts have said that this past pandemic-driven economic recession is immensely different from previous downturns.
First of all, the factors leading up to the current recession are not financial in nature. Previous recessions, including The Great Recession that lasted from December 2007 until June 2009, resulted from issues in the finance industry, monetary policy, oil prices, or a specific sector in the economy. What we are currently experiencing is a recession caused by a public health crisis – what is referred to as a “self-induced recession” by Jason Furman, an economist and professor at Harvard Kennedy School. As such, consumers and companies remain hopeful that, with time, businesses will reopen again, work will resume, and things will go back to ‘normal’ as we gain more control over the pandemic.
In technical terms, many experts believe that the U.S. will undergo either a “U-shaped recession” or a “V-shaped recession”. In the first proposed model of recovery, the drop in economic output will bounce back in “fits and starts” before eventually climbing again. In the second model, the sharp and rapid downturn in GDP will be followed by a violent upswing.
In other words, as much as we are in the deepest recession since WWII currently, “it is almost certainly also the shortest recession” since the war – as noted by chief economist Jan Hatzius at Goldman Sachs.
The Importance of Advertising NOW
A recent Kantar study found that 92% of consumers believe brands need to keep advertising amid the outbreak, providing them a form of distraction, entertainment, positivity, and normalcy in their daily lives from being inundated with COVID-related news. However, only 7% of those surveyed said that brands should continue using their normal brand tone of voice.
According to Jason Kanefsky, chief investment officer (CIO) at Havas Media, this means that “a larger portion of advertising investment will need to be focused on building and maintaining a meaningful relationship with consumers rather than driving near term sales.” The biggest loss for brands who don’t invest in advertising right now is not in profits, but rather in the lifetime value and loyalty of their customers. So whether you’ve just revamped your ecommerce website or your restaurant is still open for takeout, or you’re now offering contactless delivery, let your audience know that you’re there for them. Consumers will remember those – including companies – who helped them during these challenging times, and will be sure to return the favor for many more years to come.
What’s more? Let your communities know that your company is doing its best to serve and support society for the greater good. At least 75% of consumers say they expect brands to support frontline workers, vulnerable people, their local communities, and their employees. It goes without saying, but there isn’t a better time than now to show that your brand is a leader in corporate social responsibility.
Post-COVID Advertising Checklist:
Advertising during COVID is by no means a time to capitalize on consumers’ vulnerable state of mind and sentiments. However, now is the time to communicate a powerful and sincere message that resonates with your audience. Consider some of the following points to take stock of the creative development process during COVID-19:
1. Connect and empathize
Whether you’re an essential or non-essential business, tap into what exactly it is that you can do or provide to serve your customers and create a strong and relevant ad message that encapsulates what you can offer. For example, if you’re a brand that provides “COVID critical” resources (e.g. personal hygiene items, PPE, cleaning products), focus on assuring your audience that your products and services are safe to use and fully stocked. Likewise, if you’re a non-essential business, the last thing your customers want is to have a new product or service shoved down their throats when there are bigger worries at hand. Instead, consider showcasing your solidarity and your company’s values and championing togetherness.
2. Be responsible
Ensure that your message and content doesn’t conflict with local government regulations and authority advice around social distancing measures and gathering numbers. For example, if you’re a local restaurant, now probably wouldn’t be the best time to suggest to consumers that they should bring their entire family out for dinner on the weekends. Instead, advertise your takeout options that families can enjoy in the safety of their homes.
3. Bring out the creativity
Creativity will always be appreciated by anyone. It can come in the form of a novel message or humorous remark, for example. Just make sure that when you use humor – which can be a highly effective way to engage with your audience – you are doing so appropriately. If done correctly, humor can give your audience a much-needed chuckle and sense of normalcy. Just make sure not to trivialize the current situation.
Final Thoughts: What’s Next?
As regulations slowly start to ease across the country, consumers are looking toward brands to help guide them into living a safe and somewhat normal life again. It would be a priceless mistake for your brand to not get your message out there during this time.