Coca-Cola, Toyota, Nestle provide us valuable lessons, right now
By David Scribner, oOh!media Chief Customer Officer
At Nestle early in my career as a brand manager during the last recession, the company’s philosophy was to increase spending through the downturn, talk to consumers and drive brand awareness. Throughout this period Nestle kept advertising and used the increase in spend to come out the other side even stronger.
So where does this leave us today, and what should advertisers be thinking in the midst of such a difficult situation?
Marketing professionals are being put under mounting pressure to cut budgets as we enter unchartered waters, with no clear view of when things will turn around, as the world struggles to comprehend and deal with the escalating COVID-19 crisis,.
From media owners to traditional big brand advertisers, everyone in the marketing space is feeling a sudden and dramatic change that is impacting revenues, making predictions impossible, and disrupting normal operations. The corporate rulebook is being thrown out the window.
It’s no secret that marketing budgets are already starting to be scaled back. Some reasons for this are obvious – it’s hard for an airline to advertise if no-one is flying, and the same goes for hotels, tourism operators, and so on. But other sectors have a different, perhaps more nuanced, set of options available to them as they scramble to adjust to a rapidly changing reality.
For these companies, does it really make sense to stop all advertising?
Should brands consider a smarter, more focused and targeted approach that will allow them to maintain a presence while riding out the storm?
Coca-Cola and Toyota’s history lessons
History can teach us a lesson,perhaps the most famous example being that of Coca-Cola’s strategic decision to increase its advertising spend during the Great Depression, which ravaged America and the rest of the world in the 1930s. Like many companies, Coca-Cola had to cut its operating expenses to match the prevailing conditions, but it actually increased its advertising spend in order to build longer term brand equity – an approach that, to say the least, clearly worked.
Other companies have adopted the same far-sighted strategy in similar downturns. Toyota, for example, increased its ad spend during the early 1970s energy crisis, which helped it become the US’s best-selling imported car a few years afterwards. Famously, ad agency Leo Burnett was actually founded in the Great Depression, in 1935 to be exact, and survived through hard times to become a global powerhouse for decades afterwards.
Here’s four themes for marketers to keep close:
Brands: Be careful about being absent
First, it’s a good time to remember that brands are long term entities. It’s increasingly important to connect with consumers and let them know about your business and how you are operating in the crisis, even while millions of people are tightening their belts and worried about the future. Advertising is a daily reminder that your brand is around, available, and there for the long run.
On the flip side, being absent from the market, and perhaps even forgotten, will make it harder to bounce back and generate sales when conditions stabilise and optimism creeps up. Now is the time to connect with your consumers.
Watch non-discretionary spend – it’s still happening
Second, at unprecedented times, it’s important to really understand audiences and the social economics that are creating shifts in their behaviour. Our daily lives are changing from the usual 9-5 routine. Many of us are now working at home and therefore spending more time in our local neighbourhoods as we duck out for our takeaway coffee, head to the park with the kids, walk the dog, go for a run, or buy groceries at our local supermarket (or at the store in the next suburb over because there’s no toilet paper in our local store!). For consumers, non-discretionary spend in general is on the up.
Time to think hyper-local
Third, this increasing suburban activity suggests it’s time for brands to increase the local flavour of their content. oOh!media is very much a company of local assets, and we’re encouraging and working with customers to add an enhanced local dimension to their ongoing campaigns, so they can continue to reach their audiences and talk to their customers.
It’s all about tone
Fourth, now more than ever, brands need to think about tone and the way in which they talk to their audiences. It’s time to be sober, calm and trusted. To do what’s right for your customers and society in general. People will respond well to an appropriate tone that reacts quickly to our changing world and the high levels of concern out there.
We are seeing evidence that forward-thinking companies are already adapting quickly – understanding how audiences and their movements have changed, and how they can be reached. For example, businesses involved in food delivery services, as well as supermarkets, convenience and liquor stores, have seen rises in activity levels and taken note of their continuing ability to build brand awareness by providing relevant products to people during this difficult time.
In a related retail note, alongside our Junkee Media publishing business, we have just launched a campaign across our network promoting kindness, compassion and consideration, spreading messages of positivity across our assets. The initiative builds on community spirit through uncertain times, is reactive to the changes we’re facing in Australia, and connects with audiences through emotive messaging.
Brands too are presented with the opportunity to connect with people on an emotional level, being genuine and perhaps placing greater emphasis on factual content.
Of course, it also goes without saying that companies should be adapting their business models to reflect changing circumstances, focusing on what people need in the short-term, and telling them about it appropriately. By necessity, new ideas will arise and, despite the challenges, some of these may well stick and evolve well into the future.
In summary, the shock of the coronavirus is rippling through our economy and society, posing serious – but not insurmountable – challenges for brands. Focusing on local activities and long-term perspectives is the order of the day, reinforced by adopting the right tone for the times. Brands which are agile and adapt through this period will be well-placed to cement themselves more strongly into the public consciousness in future years.
David Scribner is oOh!media’s Chief Customer Officer, and has a unique combination of experience as both a CMO and a CEO in customer-centric and digitally-driven businesses.