If you’re not entirely sure what your marketing strategy should be during the COVID-19 pandemic, you’re not alone. There’s uncertainty about how brands should react now and what to prepare for in the months ahead. This is all new territory and there aren’t many parallels in history that we can draw from to guide us.
If any comparisons are possible, the 2008 recession is likely the only applicable example in recent history. We have to be mindful that digital marketing then was only a fraction of the entire marketing mix, but there’s a glimmer of light for digital marketers.
Overall, in 2008 the spend on online only dropped by 2%, while more traditional advertising mediums suffered greatly. Newspaper ad spend saw a 27% downturn, while outdoor ad placement spend dropped 18% (data reflects the US market).
As social distancing measures become a new reality, it’s likely that traditional print mediums will be in jeopardy again, while TV and online advertising will remain an always-on strategy, with the latter being preferential due to its lower costs.
Now the question may be why not turn off marketing altogether? Hopefully, this article will explain the exact role marketing plays in helping a business soften the effects of the crisis and the looming recession.
In its most basic definition, a recession is a slowdown of economic activity that’s more precisely defined by at least two quarters of negative growth in the economy.
But this isn’t a particularly useful definition for marketers.
What’s critical for businesses to predict is exactly what the shape of this economic downturn will be, and since we’re entering uncharted territory this is proving to be an extraordinary challenge for economists.
However, we do know that recessions come at three different geometries, the V-Shape, the U-Shape, and the L-Shape. Each leaves a progressively longer lasting impact on our economies, our businesses, and in the end, on us, marketers.
What economists and analysts are currently rushing to figure out is exactly which roller coaster ride are we about to take, and what can we do to ensure we end up with a V-Shape and not an L-Shape recession.
Businesses are not unlike economies; they follow a similar pattern, and preparing for the quarters to come can prove much easier if you can estimate the nature of the recession ahead.
Marketing plays two vital roles in getting your business through an economic slowdown. First, it can be used to soften the depth of the downturn – the degree to which your growth slows. Second, it can be used to reduce the duration of the recession effect by accelerating your business in the upturn once the economy awakens.
It’s understandable that as the world entered a nearly universal lockdown due to the pandemic, the first reaction for marketers was to pause. Everyone needed to take a moment to soak in what was actually taking place, deal with the ordeal of campaign withdrawals, and find ways to pivot quickly.
We’ve seen the spend on Facebook advertising in the US decline over the course of the past two weeks, but as governments, markets, and businesses start to get a better sense of where this is headed, and once we set strategies to counteract, this is likely to change.
We’ve seen this happen in East Asia already, where spending on Facebook advertising returned to its pre-March figures.
Even with East Asia stabilizing, though, it is unclear if we’ll avoid a global long-term slowdown, and it’s paramount that we, as marketers, have a solid plan in place.
Ideally, it should have three parts. One for the ride down, one for the ride up, and then a third for the acceleration after.
The very first one, that of the initial downturn, unfortunately, none of us had time to prepare for. In just two weeks we’ve seen businesses come to a halt. These are what the three stages entail:
We know for sure that we’re far from being through the first stage. In this crucial point, when there’s uncertainty in the market and our business-as-usual strategies come to a halt, it’s important to have the following covered:
The toughest corner to position your brand in is to hope that you can ride it out and keep quiet while running business-as-usual marketing. This means you’re currently not investing your time in softening the depth of the downturn for your business. We’re all in this now; we’ve been pushed out of the airplane and to not open your parachute now will hurt your business down the line.
We know, based on data from IAB, that 63% of marketers have already adjusted their advertising to mission-based marketing, cause-related campaigns or building brand equity.
Your customers may not need the services or products that there was demand for yesterday. Use all the data available, either from your social media campaigns or your web properties to understand which sections of your business are relevant to your audiences in the current circumstances and find ways to innovate. Your brand may still be able to offer solutions to their immediate problems.
Having to create a marketing plan at lightning speed that requires collaboration from multiple teams contributing content across different distribution channels is difficult any day of the week, but having to do it all remotely is an entirely different challenge.
In these critical weeks, it’s important to ensure that your teams can focus on the customers and content, and aren’t stuck figuring out the process. Ensure they are set up with everything they need to move forward.
You want to be sure that your brand is top of mind as soon as there’s an upturn in the economy. Companies that continued to advertise through the 2008 recession were able to grow immensely – for example, Amazon grew 28% in 2009. It is also a time when the costs to advertise have halved, which creates a possible opportunity for prepared marketers.
See the full data report on current ad costs.
Your core customers today may just be what gets you through the economic slowdown. Focus on understanding their exact concerns today. What can your business do now to ensure their loyalty extends further than the recession? You’ll be able to transform that loyalty to business growth once spending behaviors change.
While in the first stages of the crisis the digital channels may have been too crowded for your brand to be noticed, later down the line there could be more space for your brand to surface. Social distancing and the uptrend in online usage is likely to stick for months, and your brand can turn to content marketing to reach these stay-at-home audiences.
Get creative with how your business can provide value. It may not only be through direct product sales, but could involve services or subscriptions. You could in the end find new revenue streams for your business. Don’t be afraid to offer alternative pricing either.
If you’ve set up your business for growth during the second stage of the recession, you may be able to catch up if the downturn hasn’t been too long. Being top of mind will allow you to tap into the recovering economy.
As the downturn ends, it will not only be your chance to grow, but it’s also a time when you can leap ahead of competition. Each business will have weathered the crisis differently, and if yours was set up just right for this stage then increasing your advertising spending can help you expand.
This crisis will likely leave a lasting impact on our behavior. You’ll want to know exactly which behaviors have remained permanent, like working from home or ecommerce behaviors, and which have returned to what they were before the pandemic.
If there’s anything that we have learned so far during this crisis, it’s that many of us simply don’t have enough liquidity to buffer an economic emergency like this. One route to take would be to invest in contingency funds for such scenarios in the future. The second route is to think about how you can build more alternative revenue streams for your business.
This is going to be a time when we are truly tested for how fast we can move on our feet and how readily we’re willing to accept and act on the dire state of our circumstances. One of the biggest dangers, as the insights by McKinsey suggest, is for organizations to stay optimistic rather than cautious.
One challenge you could resolve already today is to set up your team for a perfectly streamlined remote workflow. Learn exactly how your team can do this.
What the next couple of months are going to look like for your business does not only depend on the circumstances, but also on how exactly you choose to face them.