The Effect of COVID-19 on Marketing Strategies - and what to do about it
By: Marc Fanelli
Despite the entire city of Manhattan being in complete lockdown, I was still able to spend an enjoyable evening of dinner and discussion with my I-COM peers albeit at home rather than our usual restaurant meet-ups (though some of the green screen backdrops were very clever!). We gathered to listen to Chris Cable, Director of Data, Analytics and Strategic Planning at Diageo, USA deliver the keynote presentation about the effects of COVID-19 on marketing and the strategies to adapt to the changes.
Here are the top 5 most useful pieces of advice for brands and advertisers that I took away from what was an extremely engaging session:
History tells us that companies who have either maintained or even increased their top of funnel marketing activities during recessions have tended to emerge on top vs their competitive set. There is a well-known case study about how Kellogg’s cereal pulled away from Post during the Great Depression by investing heavily in advertising whilst Post cut budgets - and Kellogg’s maintained for decades.
If you can afford it, maintain your top of funnel activities - or, at least, do more than your competitors - if they cut their marketing budget x%, only cut yours x-y%, with y=the smallest number you can afford. While it can be tempting to “zero out” your marketing budget, historical research shows that it will take on average 5 years to recover from the absence of your voice.
Cut all experimental activities and focus on what you know works.
Maintain price points - discounting is dangerous - you may train brand loyal buyers to become conditioned to promotions. Most brand loyalists will revert back to your brand once a recession is over.
Focus on share of voice and innovation - while counter-intuitive, companies that have done this, have tended to come out "winners" as they emerge from a recession with new products, services and primed to expand market share versus having to play catch up as a result of “hibernating” during a crisis.
The research seems to be clear that those companies who focus on innovation, geographic expansion, process efficiencies and market share tend to win vs companies who prioritize costs and process efficiencies and de-emphasize everything else.