The COVID-19 crisis is not a time when brands should cut back on marketing. Actually, those that can afford to should make use of the opportunity to increase their Share of Voice and with that their Share of Market.
A natural response of brands to the current crisis might be to try to protect profitability as much as possible by cutting their marketing spend. Some might even consider an approach that they resorted to during the 2008-9 crisis and spend less on brand building but more on demand activation. Of course, for the latter option the problem is that for some product categories there is either not enough supply to cater to the growing demand or demand has dropped because the buyers simply have no use for the product or can not buy it.
If buyers can not or have no reason to buy your product or service, doubling down on demand activation is not a fruitful path. But does this mean that companies should also cut back on brand building? The answer from Les Binet and Peter Field on that question is a resounding no.
The risk of lowering Share of Voice
Binet and Field are famous for the data crunching they did on the British IPA Effectiveness Awards entries over the years. In 2013 there findings appeared in their now classic report The Long and The Short of It. Binet and Field took a look at the campaigns that ran in the 2008-9 recession period. Some brands had cut their Share of Voice (SOV) while others had raised theirs. SOV is strongly correlated to Share of Market (SOM). As a result, it could be expected that such strategy would prove to be very risky.
What was expected did actually come true. The brands that took advantage of lower SOV costs (once brands start cutting budgets, keeping up with the others comes at a lower cost) achieved impressive business gains. The companies that invested the most and acquired the highest Excess Share of Voice (ESOV) meaning that they managed to punch above their weight by acquiring a SOV beyond their SOM saw 5 times as many very large business effects (profit, pricing, penetration, etc.) and 4.5 times the annual market share growth.
Put in negative terms, and this is data from Kantor, 60 percent of brands that do not resist the temptation to ‘go dark’ during a recession decline on at least one key brand metric.
Brand building to maintain brand salience
Binet and Field recommend that in peace time the ratio brand building and demand activation spend be 60:40. In 2008-9 companies reshuffled some of their budget to end up with something more akin to a 50:50 spread, a decision that Binet and Field consider sensible. Of course, as I said, the financial crisis was a very different crisis than the current COVID-19 crisis where you will achieve limited results by working on demand. For many industries it will now make more sense to focus on brand building first and foremost.
Continuing brand building efforts will keep brand salience at a high enough level so that when the peak of the crisis is past and we see a release of pent up demand, the brand is reassured of a place in the consideration set. [to be complete: the initial findings from Binet and Field applied to B2C campaigns – however, their subsequent research taught us that the same principles remain applicable in a B2B context.]
What should this brand building efforts now look like? Global Web Index asked more than 12,000 internet users from different countries what they expect brands to undertake during the coronavirus outbreak. Only 37 percent thought that brands should carry on advertising as normal. 83 percent wanted flexible payment terms, 81 percent desired free services, 79 percent expected brands to close non-essential stores to help prevent the spread and 67 percent wanted them to suspend their normal factory production to help produce essential supplies.
Looking back at the campaigns that were most successful in 2008-9, Binet sees most potential in emotional feelgood campaigns that are rooted in the reality of what the brands do for customers. Together with topical opportunities to build goodwill through acts of humanity and generosity, as hinted by consumers through the survey mentioned above, we now have two important tracks of brand building B2B and B2C brands can get to work with.
Binet and Field focused on paid advertising campaigns. Of course, the day to day practice of public relations does not just revolve along large-scale advertising campaigns. Owned and earned media will continue to be an important part of the mix for any brand building and – even in COVID19-times, and this goes especially for B2B with its long sales cycles – a minimum of demand generation efforts where they are useful and warranted.
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You might also like our piece on how to conduct B2B media relations in a severe crisis.