This week WARC published The WARC Guide to Marketing in the COVID-19 Recession. Lena Roland, Managing Editor, WARC Knowledge, picks out some highlights.
We hope the guidance and new frameworks presented in The WARC Guide to Marketing in the COVID-19 Recession – sourced from an array of subject and industry experts from around the world – will help marketers make the best strategic choices to protect and grow their brands. Here are some highlights from our report.
1. The standard advice to keep advertising does not apply to all brands
A significant body of research studies – drawn together over the course of almost a century – strongly indicates that brands that maintain advertising investment fare better in the long-term than those that significantly reduce or cut spend. Essentially, media costs are lower and so it’s cheaper to advertise, and for brands that maintain spend their message has greater cut through (because many brands will have gone dark).
However, this pandemic-driven recession is different: the fight for life has led to lockdown orders in countries across the world and caused immediate disruption to all our lives and a sharp shock to the global economy.
The threat of another outbreak, and subsequent lockdowns, means the shape of the recovery is especially hard to predict. That said, Sir Martin Sorrell, Chairman S4, expects a “reverse square root” recession – a sharp downturn, a partial bounce back then a plateau.
2. Supply-side shock means many brands can’t meet demand
Not only is there demand-side contraction, lockdown orders have caused supply-side contraction and many brands are unable to service the demand their marketing might stimulate. As Sorrell put it: “It’s patent nonsense. You can’t say to a client spend your way through this. If you don’t have distribution, what’s the point?”
Les Binet, Group Head of Effectiveness, adam&eveDDB states in an exclusive article for WARC, “companies need to take a more nuanced and thoughtful approach” to this recession.
3. Brand response and strategy will vary, depending on the state of the category
Gerard J. Tellis, Neely Chaired Professor of American Enterprise, USC Marshall School of Business, provides a framework for advertising strategy, depending on if they’re in a winning or losing category. Tellis takes into consideration the short-term and long-term outlook.
WARC has identified 10 key actions marketers can take today, to help them plan past the lockdowns.
WARC subscribers can take an in-depth look at all 10 action points, but here are a couple of highlights.
4. Brands that must reduce spend should use other levers to remain visible
We’ve identified a few, such as:
• Prioritise customer satisfaction. A comprehensive study of the last five major recessions suggests brands that focus on customer service and satisfaction win — during and after a recession
• Use PR and partnerships – with influencers or organisations where there is a good value exchange
• Brands in survival mode are advised to prioritise key seasons to focus limited resources i.e. make cuts in off-peak periods.
Feel free to let us know the marketing levers you’re using to stay visible to customers.
5. Audit your e-commerce capability
E-commerce may double its share of total retail, making this a priority area for brands in most categories. While there’s pressure in a recession to act and see results (and cash flow) quickly, Publicis Sapient’s David Carr says brands should be prepared to go back to basics and check what they want to sell through e-commerce and how they can do it profitably. They need to ask key questions about Product, Proposition, Place, Pack/Price and People. Carr states that in a recession the need to focus on the most viable and sustainable offerings is vital.
Further, trust is vital in e-commerce, not just in the brand but in the end-to-end experience. Reassuring people about product availability and the robustness and safety of manufacturing capabilities is important.
6. In China, brands are already planning for the recovery, offering lessons for all
As China emerges from the COVID-19 crisis, and lockdown orders are eased, brands are planning how to navigate a changing environment that falls between business as usual and a “new normal”. The lessons will be critical both locally and internationally.
Nike has already set out its recovery playbook, with a four-phase response to COVID-19. While Coca-Cola is planning for a gradual recovery and assessing which channels are now best placed to reach Chinese consumers.
Our report also outlines four priorities for China’s ‘normalisation’ period and looks at how packaging has played a key role in reassuring Chinese consumers.
7. Opportunities for future growth
Recessions are a challenge, but even in the toughest times, there are opportunities for brands to be relevant, to support, to collaborate and to grow. As GroupM’s Brian Wieser states, “… growth is going to be out there, for all the doom and gloom. I genuinely believe there are substantial opportunities”. Opportunities where brands can play a powerful role include:
• Develop a ‘close-to-home’ strategy. While people will be eager to leave their homes, the potential of another outbreak, combined with economic hardship, means many consumers will prepare their homes as a place of sanctuary and safety. They will likely shop local, and initially, travel domestically.
• Similarly, support for small businesses, and helping to rebuild local communities will be a powerful strategy
• Find ‘white space’ opportunities in healthcare. Health is set to be all pervasive and a health offer is likely to seep into categories not typically associated with wellbeing leading to opportunities for new positioning or NPD
• The shift to e-commerce has been accelerated and is likely a permanent shift. At a time of significant consumer change, there is an opportunity for CMOs to play a leading role in interpreting those changes and act as ‘superconnectors’ between internal functions.
There’s a total of 20 new articles in the report, packed with actionable advice and guidance from experts around the world. Thank you to all contributors to the WARC Guide, including Les Binet, Gerard J. Tellis, Brian Weiser, Remona Duquesne, Sir Martin Sorrell, Fiona McAnena, J Walker Smith and many more. The Guide also features the freshest and most relevant content from WARC’s Data team, Case Studies team and recent content from our commissioning teams around the world.
Please do feel free to join the conversation – what actions are you taking to support your brand through the COVID-19 recession? What other marketing levers are you tapping? And take a look at the webinars we’re running next week as part of the WARC Talks 360 series: you can register here.