Advertising through a recession

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Wherever possible, the message is clear: brands should hold their nerve and invest for long-term success during and after the recession.

The coronavirus pandemic threatens to plunge the world into the deepest and longest recession for almost a century. Not only is it predicted to be more severe and more all-encompassing – in terms of categories and countries – than any recession in living memory. The growing lockdown of free movement of citizens will also make it unlike any other.

Brands that are still able to trade effectively in these extraordinary circumstances are looking for guidance on what marketing they should undertake during the pandemic, during the recession that will follow, and afterwards.

HIGHLIGHTS

  • What we can learn from recession history - Recommendations for advertisers
  • The perils of shifting spend into short-term promotions
  • The impact of “Going dark” on retaining brand price premiums
// What we want to investigate and why

Objectives

Brands that are still able to trade effectively in these extraordinary circumstances are looking for guidance on what marketing they should undertake during the pandemic, during the recession that will follow, and afterwards.

While it is in theory attractive to turn off marketing investment, historical precedent suggests that brands that thrive during and after a recession are those that sustain and even increase marketing spend.

“Going dark” and focusing on short-term price promotions are in fact counter-productive strategies. They erode brand equity measures, stifle growth, and put brands at competitive disadvantage. They also make it incredibly challenging to retain price premiums that brands take years of long-term brand building investment to secure.

  • Do not focus on short-term promotions and avoid “Going dark”
  • Where you still have access to customers, do whatever you can to sustain investment when times are tough
// What we've discovered and suggest

Findings

With fewer brands choosing to advertise during a recession, media is generally cheaper and so it costs less to increase share of voice relative to competitors and so share of market.

Cutting spend and going dark should be avoided because they harm the ability of your brand to retain its price premium and its price elasticity. Get the right mix and adapt media channel choices.

  • The optimal balance of spend is 60% on long-term brand building and 40% on short-term sales activation
  • How to adapt media channel choices

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