Report: The Covid effect on advertising and consumer sentiment

Several new studies find the pandemic is pushing consumers to expect brands to address the crisis in their advertising and changing their spending habits

Brands that ignore the coronavirus crisis in their advertising do so at their own peril, according to the latest stats on pandemic advertising.

Almost 40 per cent of Australians believe advertisements should acknowledge the pandemic, according to the latest Dynata research. And almost half find ads communicating how a brand is contributing to the needs of the crisis were among the most appealing. 

In terms of attitudes to advertising during the crisis, half of Australians agree it's fine for brands to continue advertising during the pandemic. However, brands should err on the side of caution, as almost a quarter of Australians said that ads that did not adjust their messaging were unappealing.

The Dynata research surveyed at least 1200 respondents in seven countries, including Australia.The surveys have consistently shown brands that demonstrate a level of empathy or action to help during the pandemic are looked on more favourably by consumers.

Dynata Asia-Pacific MD, James Burge, said the research shows while Australians are still generally receptive to advertising during this time, brands need to be mindful of the world in which we all live today. 

“At the same time, brands should proceed with caution when promoting messages of community or solidarity with consumers that are superficial or not reinforced with action. As our research shows, almost half of Australians believe some companies are taking advantage of the pandemic to market and sell,” Burge said.

The research also revealed consumers are wary of pandemic opportunists, with almost half agreeing companies are taking advantage of the pandemic. And they’re watching brands carefully about how they behave as good business citizens throughout the crisis.

Consumers indicated they will be more loyal to a brand once the pandemic is over if it continues to pay employees who are no longer able to work. Almost half indicated they would be more loyal to a brand where senior executives have forgone portions of their salary during the pandemic and almost one-third say their brand loyalty would be negatively impacted if they take no social action during the pandemic. 

Conflicting views on brand activism

When it comes to the political climate and social issues, brands have challenging territory to negotiate with varying consumer attitudes to brand activism. For instance, Burge said almost half of Australians say they prefer brands don’t make political statements of any kind, but at the same time, there are nearly a third prefer brands taking a strong stance against racial injustice. 

“There are many people who want brands to be responsive to the moment, as heightened awareness of the Black Lives Matter movement over the last few months has both broadened global awareness of the injustices faced by people of colour and raised consumer expectations that brands be socially conscious,” he said.

When it comes to advertising effectiveness, meanwhile, the new research found consumers are watching twice as many ads as they think they do and more ads online, although there is a caveat. While participants watched more ads than they thought, on average, only 51 per cent of ad minutes had actual ‘eyes on screens’. 

This ‘scarcity of attention as a commodity’ shows the significant value advertisers place on the times when people are actually focused on ads, according to a fresh Kantar-Google study. The research used a new method of eye-tracking technology for the first time in Australia to get a clearer picture of people’s viewing habits as they went about everyday life at home and on the move. 

Google Australia, head of large customer marketing, Mark Wheeler, said marketers and advertisers might be excited to learn people are watching more ads than thought, it nonetheless reveals that sustained attention is something they need to work hard for.

“The lesson here is to ensure your advertising creative is clever and engaging, and that you’re using the right mix of media,” Wheeler noted.

Changing consumer attitudes to spending

Finally, the COVID-19 pandemic has led to permanent shifts in the way consumers think, behave and transact when it comes to hip pocket decisions and brands will need to go above and beyond to show empathy for the challenges Aussies are facing, according to new research from comparison site, Finder. 

Australians are focused on household budgeting, with almost half agreeing they are now paying more attention to household budgeting than compared to this time last year, according to Finder research. One in three say they’ll spend less on non-essential items such as additional clothes, shoes and accessories.

Trust in banks is changing, with Australians becoming more conversative in their banking choices by favouring traditional banks over smaller challenger lenders, or fintechs. And consumers will demand better deals post-COVID, with at least 1 in 5 more focused on ‘shopping around for new financial providers offering a better deal’ than they were this time last year, which could lead to more consumers switching providers, particularly under the Open Banking framework.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.

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