As part of the WARC Guide to marketing in the COVID-19 recession, Les Binet, Group Head of Effectiveness at adam&eveDDB, explains why this recession is different and why the normal rules of business may not apply, at least for a while. This is an excerpt from Binet’s exclusive article ‘Navigating COVID-19: survival, adaptation and recovery’.

I don’t know about you, but I feel overwhelmed by the flood of COVID-19-related research that keeps pouring into my inbox. Every day brings more research, more opinion pieces, more strategy documents. Some marketers clearly have a lot of time on their hands.

Amongst the many articles and analyses are pieces warning advertisers not to “go dark”. Based on data from previous recessions, these argue that firms should maintain or even increase adspend in order to gain market share, and so emerge stronger when all this is over.

There is definitely some truth in this. Indeed, I have made the same argument myself in the past. But I can’t help feeling that we need a more nuanced and thoughtful approach just now. For a start, advice from Adland about “not going dark” is likely to sound self-serving and hollow to a CEO who faces imminent bankruptcy. But more fundamentally, I think there are three reasons why lessons from past recessions may not apply just now.

  1. This is not a “normal” recession, and lessons from previous recessions may not apply directly, at least not at first.
  1. This is a social crisis. In fact, it’s more like a war than a recession. And that means that the normal rules of business may not apply for a while.
  1. Different businesses face very different problems, and those problems will change as the crisis proceeds. There is no one-size-fits-all solution. Your strategy should be tailored to your business, and it should evolve as your crisis unfolds.

For all these reasons, I think we should examine the evidence very carefully to see where we can draw lessons from past recessions and where we can’t.

There are not any simplistic pronouncements about the right way to ride out the Corona Crisis. We’re in uncharted territory here, and we should freely admit that no-one knows anything for sure.

When deciding how to adapt its marketing strategy to meet the crisis, a brand needs to think about a lot of internal and external factors. It needs to think about:

  • How demand and supply will evolve over the next couple of years, and how to use all 4 Ps - Product, Place, Price and Promotion - to keep them in sync.
  • How competitors will behave, and how the costs associated with marketing will change as a result.
  • The tension between short-term cashflow and long-term profit.
  • How its actions will be seen and remembered in the long term, not just by its immediate customers, but by its staff, suppliers, distributers, Government, regulators, the media and the public at large.

All these things are interlinked, and affect different firms in different ways. First, we need to understand why it’s so different this time.

This is not a normal recession

It’s been a very long time since we have faced a disaster of this magnitude. Most people working in marketing and advertising today have never faced problems like the ones they are facing now, so it’s only natural that they should look to history for guidance. And there is an obvious place to start looking: previous recessions.

There is a substantial body of research on how businesses and brands should behave during economic recessions, some of it stretching back to the 1920s. Broadly speaking, this suggests that most firms should try to resist their natural tendency to slash advertising budgets. The less they cut back, the better they perform in the long run. Indeed, for some firms, a recession is an excellent buying opportunity. Advertising is cheap, making it a great time to increase share of voice, gain market share, and maybe even kill or acquire some of your competitors1.

Some of this advice is relevant to the current crisis, but before we swallow it hook, line and sinker, we should bear in mind an important caveat. This is not a “normal” recession, and lessons from previous recessions may not apply directly, at least not at first.

Most of the historic market contractions that we have studied have been crises of demand. Some had their roots in the supply side of the economy (industrial disputes, oil prices, financial liquidity), but as far as CEOs and CMOs were concerned, the immediate problem was a slump in consumer demand.

This crisis is different. Yes, demand is an issue for many businesses right now (although not all). But for many firms this is a crisis of supply. And that changes things in two important ways.

Firstly, it changes the size and shape of the crisis. This recession probably will be much sharper and deeper than most previous recessions and the shape of the recovery is unusually hard to predict. Telling advertisers to “invest for the recovery” may grate if they are fighting for their very survival and there is no recovery in sight.

Secondly, it changes how firms should respond. If demand is the problem, advertising is an obvious solution. But if people can’t buy or use your product right now, then the role for advertising is much more limited. There may still be reasons to advertise. But stimulating immediate demand certainly won’t be one of them.

The COVID-19 crisis is different from previous recessions in another, more important sense. This is not just an economic recession – it’s also a humanitarian, social and political crisis. In fact, it’s currently more like a war than a recession, and that means that the normal rules of marketing and business may not apply.

To find out more about how your brand should adapt its marketing strategy in these troubled times, read Les Binet’s full article here.


1. It’s more complicated than that, of course. Different businesses face different challenges, even in a “normal” recession, as Peter Field and I pointed when the last recession hit.  For a fuller discussion, see the Advertising in a downturn report.

Read more articles from the WARC Guide to Marketing in the COVID-19 recession.