Following the arrival of the COVID-19 health crisis and subsequent economic downturn, a number of IAB member organisations have quickly responded by conducting consumer research studies and mining their own data sources to provide insight and guidance for marketers and brands.
While each organisation has focused on their own area of expertise and each study brings different perspectives, five common themes are clear across this body of work.
Many of the research studies acknowledge there will be phases to this journey, moving out of the crisis period into a more stable new normal and later into recovery and revitalisation. Marketers will need to be attuned and adjust to consumers throughout these stages.
Marketers should also watch for the signs of consumer behavioural changes that will be long lasting post COVID-19 and be prepared for when we emerge from this period and consumer spending picks up again. A consumer survey from Pollinate, for example, indicated 76 per cent of consumers think COVID-19 will have a big impact on how we go about our lives in the future.
During the initial period of crisis, people’s feelings have been dominated by anxiety and uncertainty and their reactions have been typified by panic buying and a craving for information. The research has highlighted these feelings, with Pollinate’s consumer survey showing prevailing feelings are of uncertainty and anxiety, followed by calm, acceptance and being in-limbo.
Consumers are on the hunt for the latest information and have increased need for digital content while in lockdown. Changing content consumption patterns, as evidenced in the digital industry currency data, show time spent on news sites increasing significantly, along with increased consumption in other digital content areas (such as food and cooking). Australian media owners are seeing huge jumps in online traffic and the IAB encourages advertisers to be informed on how to manage brand safety during COVID-19 crisis and utilise this increase in consumer engagement.
Consumer spending is also changing due to panic, livelihood concern and many physical stores being closed. Nine’s Consumer Pulse reports consumers have increased grocery spend along other categories such as streaming and in-home entertainment, alcohol, food deliveries, business and office supplies, gardening and hardware supplies as people expand their activities at home.
During April, the IAB engaged with advertisers and agencies with a COVID-19 Digital Ad Impact Survey to understand advertiser reaction and their ad investment intentions for the coming months. Twenty-one per cent of respondents indicated they have paused all their ad spend, and 57 per cent have decreased some of their spend.
Encouragingly, of those who have decreased spend, some 31 per cent reported they are delaying spend are still reviewing whether they will be in a position to invest later.
There is a significant body of research conducted over previous recession periods that has shown that companies who can protect marketing budgets during these times tend to do better in the ensuing recovery period. Harvard Business Review analysed the corporate performance of 4700 public companies over three global recessions and reported that companies that reduce costs selectively by focusing more on operational efficiency, while investing relatively comprehensively in the future by spending on marketing, R&D, and new assets, are the best performers out of a recession.
The Journal of Advertising Research also reports strong and consistent evidence that cutting back on advertising during a recession can hurt sales during and after the recession, whereas firms that increased advertising experience higher sales, market share or earnings during or after the recession.
Ipsos consumer polling data shows the majority of people want to continue to hear from brands during the coronavirus period. Ipsos reports there are clear indications people expect brands to lead the fight and want continued contact with brand communications that make them feel secure, to retain a sense of consistency and normality and meet their desire for general positivity with messages of hope, comfort and calm.
Kantar has re-tested 10 TV and digital ads, from five markets, tested prior to the crisis, to identify if people’s concerns about COVID-19 and the economy are affecting how they respond to advertising. On 95 per cent of indicators, response to advertising is unchanged from previously and Kantar’s recommendations from studies for individual ads would not change from those given originally.
Marketing performance data from Analytic Partners proves that even during a recession marketing still performs –
Unruly has tested the creative of a number of brands who decided to tackle the issue of Coronavirus head-on in their creative strategies. From their ad testing, it seems the best thing to do right now for brands is to be brave and to acknowledge the impact COVID-19 is having on their customers and how they can help and offer support.
As we know, brand building is the main driver of long-term growth and emotional engagement plays an important role in impacting branding. Ipsos asserts that during the current uncertainty and beyond, building stronger emotional engagement shows greater potential to further drive brand equity than promoting product superiority, which runs the risk of being disconnected from how people are thinking and feeling.
Pollinate’s research shows consumers would like brands to communicate with empathy and be informative and educational. Brands need to find new ways to connect with their customers that provide utility and help. But they must do so in a way aligned with their brand values and purpose.
Creatives should also take note of the importance of brand differentiation, many US ad creative designed for brands during COVID-19 is starting to look and sound very similar, take a look at this video clip of brand advertising that demonstrates.
PWC acknowledges the level of disruption we’re witnessing with development of the COVID-19 pandemic is unprecedented in the modern era and is likely to reinvent the meaning of the term. PWC’s resources outline how companies fit for the digital era are better placed to pivot their operations and processes to find new ways to meet customer demands — and new customers.
Sir Martin Sorrell in a recent interview with Randall Rothenberg, CEO of IAB US, spoke about trends from pre-COVID-19 and enterprise management transformation being accelerated rapidly through this period, particularly in the areas of ecommerce and brand disruption. He reiterated the vital importance of brands building their own first-party data, even in the face of the policy revisions taking place.
With Australian brands actively reviewing how to adapt their businesses models to address the rapidly changing market conditions, the IAB Australia Direct Brands Report recommends reviewing the strategies of direct brands, particularly around ecommerce, finding the direct brand economy is achieving mainstream status and has much to offer traditional brands.
As Australia’s COVID-19 case numbers slow and the easing of isolation restrictions come into sight, where possible it is time for those brands who have gone dark or decreased spend to make plans to recommence brand communications to ensure they are competitive and in a good position for the ensuing recovery period.
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