Charting your brand’s response to COVID-19 through the lens of history

While the country focuses on how to stop the spread of COVID-19 and stem the economic downfall caused by its disruption, marketers must also determine how to react in the short term to minimize long-term damage as they adapt to the new normal.

If they are to prevail, companies must be prepared to serve their customers both now and when the pandemic subsides. It’s a formidable challenge, to be sure, since the current crisis is unlike anything we have had to navigate before, but there is some precedent in past events—from major recessions to the terrorist attacks of 9/11—that can help inform our actions moving forward.

Drawing lessons from previous crises and examining what we have already learned from the COVID-19 threat, answers emerge for three critical areas of concern:

• Investing for the future: Organizations that continue to support a level of marketing spending during the crisis will be better positioned (Read more...) maintain long-term brand health.
• Finding a brand voice: Marketers must find a message and tone for their brand/category that resonates with what people are experiencing right now.
• Accounting for shifting media habits: Media habits have shifted as the majority of Americans stay home, so organizations need to adjust spend accordingly.

Investing for future brand health

History shows us that it is in a brand’s best interest to continue to advertise through an economic downturn. In particular:

• Increasing advertising spending during a recession has a positive impact on both ROI and market share. A 1999 study by J. Walter Thompson’s Steven King of 300 companies that had navigated a recession revealed that those that substantially increased their advertising during the downturn saw 2.7% increases in ROI on their marketing spending and market share gains of 0.5% to 0.9%. These findings have proven consistent through later recessions.
• In a sign that King’s advice continues to resonate, research by Dentsu Aegis Group during the COVID-19 pandemic found that while 47% of Chinese agencies said their business was impacted by the crisis, only 7% stopped spending on advertising completely.
• A consumer packaged goods brand that stops advertising loses half of its brand awareness in just 2.5 weeks, according to research by Simon Broadbent in the late 1970s.
• Consumers respond positively to advertising in times of crisis, with the exception of messaging that they perceive to exploit the situation for commercial gain, according to a post-9/11 study from Hofstra and Pace universities.
• A pair of studies conducted during the COVID-19 crisis reveal two hopeful facts for marketers: 1) consumers still want to hear from brands; and 2) more Americans than not believe advertisers should carry on as normal (more on these later).

New research specific to the coronavirus crisis also supports the importance of continuing to advertise. The 4A’s polled 1,000 consumers this March, 43% of whom said, “It is reassuring to hear from the brands I know and trust.”

Another March study, this one by GlobalWebIndex (GWI), revealed that 38% of Americans believe that advertisers should carry on as normal during the pandemic, compared to 28% who do not.

While there are no studies of what it costs businesses that “go dark” in a downturn to rebound once the recession is over, recency theory suggests that the spend required to rebuild awareness could negate any savings gained by pulling back.

Also, brands that continue to invest in advertising while others cut back have the opportunity to capture a higher share of voice at lower media cost.

Finding your brand voice

A consumer-centric approach to marketing strategy is nothing new, but amid a crisis, understanding your customers’ mindsets becomes even more important than understanding their wants and needs.

Your messaging during COVID-19 needs to take into account changes in consumer behavior that will likely continue as long as the threat of the pandemic exists.

It needs to set the right tone and communicate something meaningful and relevant to what people are experiencing now. And there’s more to messaging than what your brand is saying. Now more than ever, it’s just as important is you’re doing.

Today’s consumers—driven by the priorities of millennials and Generation Z—increasingly consider a brand’s stance on societal issues when making their purchasing decisions.

They are paying close attention to brands’ actions during the pandemic and quickly reacting, through social media shaming, boycotts and other means, to those they perceive to be taking advantage of the crisis.

The good news is that consumers are open to hearing a variety of messages from brands during a crisis.

The post-9/11 research by Hofstra and Pace universities identified four key messaging formats that emerged in the wake of the attack and measured consumers’ responses to examples of each:

• Designed to show a human face of the organization.
• Designed to encourage political or community participation.
• Congratulating individuals or groups for patriotic achievement.
• Designed to exploit the event for commercial gain.

Of these, only the commercial ads received a more negative than positive response (45%) while two-thirds of respondents reacted positively to the image-related, participatory and patriotic messages.

The Hofstra and Pace researchers drew from the work of social psychologists Sherif and Sherif to explain why these themes triggered positive responses.

The answer lies in four behavioral changes the psychologists identified that take place when a group encounters an outside threat: increased group cohesiveness, rise in autocratic leadership, focus on activities, and emphasis on loyalty.

Of these, image and patriotic ads convey a “we’re in this together” message that resonates in the context of increased group cohesiveness while messages that encourage participation speak to a focus on activities.

Spend to shifting media habits

Everyday routines have been drastically altered as Americans largely ride out the COVID-19 crisis at home. Two recent studies look at the impact of stay-at-home orders on media consumption habits, providing valuable intel to marketers considering where to direct their advertising dollars.

The first, by Nielsen, predicts Americans will consume 60% more content during the pandemic. This is based on consumers’ media habits during two disruptive natural events: the 2016 New York blizzard dubbed “Snowpocalypse” and the catastrophic Hurricane Harvey that made landfall in Texas a year later).

GWI’s COVID-19 research, meanwhile, shows that 95% of Americans are spending more time using in-home media. Video, combining both digital and linear, is seeing the highest increases.

Social channels have also significantly increase, serving as a news source and a way to easily connect with family and friends, while cinema and outdoor advertising have substantially declined.

Radio consumption has predictably dropped in in-car listenership, but surprisingly, in-home usage is up 26% with people listening in on their smartphones (19%), laptops (12%) and smart speakers (10%).

The road to opportunity

There’s no question that COVID-19 has dramatically disrupted business as usual and its effects will reverberate for the foreseeable future.

For certain industries—hygiene and cleaning products, for instance, as well as groceries, food delivery, ecommerce, online learning, and work-from-home tools—the pandemic has created growth opportunities that would have been unthinkable just a few months ago, leaving them struggling to keep up with demand.

For too many others—like travel, live sports and entertainment venues, fashion and retail, transportation—safety concerns and stay-at-home orders have caused precipitous drops. As the crisis continues, existing models support a minimum GDP decline of 5%.

The lessons of history point to three critical steps for marketers today. Whether COVID-19 has brought growth or decline to their industry, they must continue to invest in marketing at some level to ensure their brand’s long-term health.

They need to understand what their customers are experiencing and find a message that will resonate with them now. And to reach their audiences with that message, they must allocate more of their marketing budget to the social media and video channels consumers are tuning into while they spend more time at home.

The challenges of marketing in a pandemic environment will be with us for some time. But with a clear path forward, informed by past crises and early intelligence from COVID-19, they are not insurmountable.

For a deeper dive into the studies and insights presented in this article, read the white paper by Egan and Mower Insight Group, Lessons From History: How Brands Should Respond During the COVID-19 Crisis.