The Ukraine War has intensified rising inflation, energy prices and supply chain disruption. In this new Spotlight WARC's Catherine Driscoll looks at the impact for consumers and shares advice for marketers a year after the conflict began.

This article is part of a Spotlight series on the impact of the war in Ukraine. Read more

Russia’s invasion of Ukraine on 24 February 2022 prompted the most serious conflict in Europe since World War II. The war has intensified existing strains on European consumers such as high energy prices, inflation and supply chain disruption, as well as caused a humanitarian crisis in Ukraine and for the seven million Ukrainian refugees who fled the country. For our first EMEA Spotlight we take a look at the impact of the Ukraine War on consumers, with advice for marketers on how to respond to a conflict that shows no signs of resolution.

Since COVID-19 began its deathly spread across the world at the end of 2019, we have entered an era of polycrisis with the causes and effects of rising inflation, energy prices and food insecurity feeding into one another and causing widespread hardship and anxiety for consumers. Russia’s invasion of Ukraine intensified these stresses, and a year on from the invasion UN food security experts are more concerned than ever about the global cost of living crisis that the war has fuelled. The war also raised complicated questions for advertisers and agencies on how to react in the short and long term as Europe fractured overnight. The Yale Chief Executive Leadership Institute has tracked more than 1,000 companies that have publicly announced they are voluntarily curtailing operations in Russia to some degree beyond the bare minimum legally required by international sanctions.

Abhimanyu Kumta, Lead Analyst, Quantum, shares insights from social media scanning, revealing the evolving concerns of consumers across Europe since the conflict began. As he explains “The effects of a relatively small and localised war are rarely felt globally. However, on this occasion the dominant global positions of the aggressor and the defender as major players in the global food and fuel markets have had wide implications.” In the research, scans of social conversations are used to explore the impacts of the Russian invasion of Ukraine with insights from the initial boycott movements to the longer-term implications for global food and fuel prices, and the growing humanitarian crisis. The seven million people who have fled Ukraine and further seven million that have been internally displaced has been described as the largest movement of people in the European Region since the Second World War.

In an exclusive, large-scale research study Peter Steidl of German agency Kochstrasse investigates German consumers’ perceptions surrounding the war. Germany has been particularly impacted by the war, having welcomed more than one million Ukrainian refugees. This study looks at both explicit and implicit responses, so not only what consumers said about the war, but also how certain they were in their responses. While some German consumers are relatively indifferent or complacent, 33% are overwhelmed with fears about the potential impact of the war on them personally and on their country, both in the near and longer term, and another 27% are mainly fearful of the impact on them personally. The greatest fears are for their personal financial situation and quality of life, now and in the future, and a full 30% are strongly convinced the Ukraine war will force them to reduce their spending.

The Ukraine war has contributed to what has been called the ‘Fear Economy’, an economy driven more by expectations and fears than by today’s reality. As Peter Steidl explains “The message for brands is that in times of great insecurity anything that promises respite from fear, or an even fleeting sense of control, will be welcome [but] the bigger opportunity is for brands to step up and take a leadership position on something that matters. Authenticity and creativity will be key to developing compelling new ideas that offer hope that they will make a difference.”

The war also unexpectedly reinforced the power of communications, and caused significant swings in the nation brand value of Russia and Ukraine – macro lessons for advertisers in brand trust and value. In his article, Konrad Jagodzinski, Place Branding Director, Brand Finance shares insights from the latest Global Soft Power Index. Russia was the world’s only nation to lose Soft Power over the past year, as its reputation plummeted globally in the wake of its aggression against Ukraine, causing it to drop out of the ranking’s top 10. At the same time, Ukraine saw the strongest Soft Power improvement among all 121 nation brands in the ranking, driven by a steep increase in Familiarity and Influence. However, as Konrad Jagodzinski cautions, it is important to remember “perceptions of Russia differ between countries and regions of the world. While in Europe, the Americas, Oceania, and Japan, Russia is seen as an overwhelmingly negative influence on the world, in China, India, and many countries across Asia, the Middle East, and Africa, its influence is considered positive or neutral.”

While European countries have become more united, Russia has become more isolated on the world stage and its people restricted in their business activities. As Stephen Woodford, Chief Executive of the UK Advertising Association explains, “the last year has taught the world two big lessons – the Putin regime’s ruthlessness is only matched by its incompetence and Ukrainian bravery and resilience has no bounds. The galvanic effect on democracies has been remarkable, as they rapidly threw their political, diplomatic, social and economic support behind Ukraine and cut their ties with Russia as fast as possible.”

Ukraine’s president Zelenskyy has shown himself to be a communications genius, as Stephen Woodford describes, “Whether he is on the war-torn streets of Kyiv in his now-famous green sweatshirt, or standing alongside world leaders, Zelenskyy harnesses simple, emotive visuals and stories” which have not only boosted Ukrainians morale and resolve, but also lead to very significant military aid from Europe and the United States.”

The advertising industry has also stepped up over the past year, to offer support not only to Ukrainian colleagues, but to provide aid and more. One initiative which quickly stood out was the job opportunity platform In collaboration with the Ukrainian National Association, helps connect Ukrainian advertising professionals with employers from across Europe so they can safely be resettled.

This is one of several innovative campaigns from the ad industry to support Ukraine. When Russia invaded Ukraine it was not only people’s homes that were destroyed. Virtue Worldwide’s Global ECD Innovation Morten Grubak and Creative Director Tao Thomsen share the story of a ground-breaking project that gave Ukrainians the power to help preserve their cultural heritage. The BackUp Ukraine project was launched in two weeks, and enabled anyone in Ukraine with a mobile phone to scan and record artifacts that might otherwise be lost due to the bombing and devastation.

The advertising industry responded swiftly and generously to the invasion of Ukraine, but a year on the crisis shows no signs of resolution. Consumers across Europe are increasingly concerned by the rising the cost of living and ongoing backdrop of uncertainty. Brands and agencies need to both reassure and support consumers, as well as their own employees in a difficult economic and political climate.

Read more in this Spotlight series

How our industry has responded to the war in Ukraine
Stephen Woodford
Advertising Association

The story of Backup Ukraine
Morten Grubak and Tao Thomsen
Virtue Worldwide

What does the Ukraine war mean for marketers? Exploring Germany’s Fear Economy
Dr Peter Steidl, Dr Rafał Ohme, Dr Dorota Reykowska, and Dr Malgorzata Jakubow
Kochstrasse and iCodeX

Russia has lost Soft Power war with Ukraine
Konrad Jagodzinski
Brand Finance