Winning ad strategy is today’s impossible mission for marketers
Advertising was hard enough before—but with unemployment numbers and economic anxieties both skyrocketing, what’s a brand to do? Here’s our CLIKK Notes on AdAge’s lessons learned from the last big crash in 2008:
Don’t expect it to get better anytime soon.
We try never to buzzkill, but our obligation to the truth might require it here—and the truth is that, as tumultuous and scary as the past month has been, we haven’t seen the bottom yet. While shutdowns and social distancing are starting to slowly flatten the pandemic curve, hundreds of thousands of businesses are paralyzed and the short-term economic outlook is correspondingly grim.
Goldman Sachs estimates a 34% decline in U.S. GDP (Gross Domestic Product) for Q2 of 2020. That’s obviously bad—but how bad? It sets the new record for Worst Quarterly Decline ever, and it’s more than three times worse than the previous record (which was set during the flu pandemic of 1958).
Let’s add more salt: this week, the U.S. Labor Department is reporting that 14% of American workers, or about 22 million, are currently unemployed. Again, ungood… but how ungood? For starters, the unemployment rate was about 4% last year, which means that unemployment has tripled in a couple short months. The last time the unemployment number was this high was 1940, the year before the U.S. entered WWII (and if we were completely soulless, we’d call for another war because unemployment was lowest in 1944 at 1.2%).
Avoid (complete) radio silence if you can possibly afford to.
In this climate, it’s understandable that companies might cut any costs they can, including marketing. In fact, marketing costs are often first on the chopping block because ad spend is one of the few business expenses you can just Turn Off without lethal consequences.
Sure enough, ad spending is way down right now; a survey by RSW/US from early April shows that almost 10% percent of marketers have completely paused spending and another 60% have “greatly” or “somewhat” reduced their ad buys (each group representing roughly 30%).
The final 30% are the marketers who haven’t reduced ad spend (or by much); as you’d expect, these are the businesses who still have money to make right now, like fast food and hoardable consumer staples. Also in this group are businesses making plays to remain relevant, like Red Roof Inns advertising new day rates for “remote working rooms.” Otherwise, it’s crickets for the hospitality industry and countless other sectors of the economy.
The cruel complication is that there are long-term repercussions for complete radio silence; for some businesses, dropping off the advertising grid to save money is robbing long-term Peter to pay short-term Paul. We sympathize with anyone in this position—it’s a horrible dilemma—but if they can possibly afford to taper rather than go cold-turkey, it’s probably the better long-term hedge.
Adjust your messages and consider different channels.
To understate things: this is a time when most people (need to) adjust expectations down, at least relative to so many sunnier January hopes. At the same time, there’s no change to the marketer’s primordial calling: find the customers where they are.
Typical “we’re here for you” platitudes aside, smart companies are pivoting their messaging (if not their entire strategy) to remain relevant to any potential customers still in the market. The platitudes aren’t worthless—they’re the hardest part to screw up and they remind people you exist—but they’re not worth ad spend for most businesses. If you’re thinking about running ads now, ask yourself how your products and services have become more relevant, whether in terms of the product itself OR details surrounding the sale, like new delivery/pickup options. For example: before COVID, liquor stores only generated about 2% of their revenue through e-commerce, and now e-com accounts for 50-100% of their revenue (we’re curious to see the figure post-pandemic).
Beyond that, we all know that many different things can become more relevant if there’s a good offer on the table. If you’ve had the TV on (yes?), then you’ve probably heard numerous car companies ringing their zero-interest and deferred-payment bells. Those enticements aren’t cheap to offer, nor are the campaigns advertising them—and the current climate makes those offers tricky to couch—but it’s the smart play for those companies on the simple logic that it’s a better bet for the bottom line than any alternatives, including (anything resembling) their original plans for 2020.
Above all else: take care of yourselves, and if your marketing engine is still running these days, do your best to avoid being That Guy in your ads.