How Brands Can Win in a Covid Recession
Recessions are not new but, with the collision of biological, psychological and economic crises, this one will be unlike any other. And indeed economic indicators were already flashing for an imminent ‘traditional’ cyclical recession before Covid-19 appeared.
Many brands have naturally reacted by pausing or reducing spend until it is clearer on how we might work through the current circumstances. Others in sectors such as gaming and food delivery have shifted to direct response tactics to take advantage of lockdown opportunities. None of this is surprising.
Our new report ‘How brands can win in a recession’ focuses on what comes next, and how to act to ensure that brands rebound and rebuild at the right time.
The underlying business, comms, data and tech environment – and so the way people experience brands – has clearly changed fundamentally since the last recession. There are new strategic choices to be made to rise to the challenge this time, being ever-mindful of the tragic consequences of the current crisis to many in the way we do it.
Despite these differences, a review of past recessions reveals much to re-apply, not least the double benefit of maintaining brand-building investments. As remarked by commentators such as Mark Ritson, brands that continue to invest don’t just avoid the self-inflicted long-term brand and financial damage experienced by brands that don’t – they also get more for their money, increasing their ‘excess share of voice’ without increasing spend, because of competitors who make different decisions.
This double benefit is in the DNA of companies such as P&G, whose brand foundations have been reinforced by continuing to invest through past recessions, and who are using the same playbook this time around. In an April 2020 earnings call the company stated it needs to ‘double down’ on marketing investment in order to ‘move forwards not backwards’.
But, in the age of the connected consumer, the way that brands are built in 2020 has evolved since 2008. Wunderman Thompson spans the whole range of brand marketing possibilities, from advertising to ecommerce – and we believe that brand-building is more important now than ever. However, the way we now build brands must encompass the entirety of a brand’s customer experience.
Our analysis shows that through investment more broadly in experiences at this time brands can improve consideration and purchase intent, take advantage of new opportunities and rebuild in a way that ensures that, post-recession, they are stronger than ever before.
The specific context of Covid-19 puts a premium on getting the tone right and authentic activation of social purpose. It presents powerful opportunities to both build trust and destroy it, with already myriad examples of both brands getting it right and spectacularly wrong.
And in this recession more than previous ones, the differential impact on brands in different categories – and so our related prescriptions on how to act – is significant.
We live in unprecedented times but brands have a critical role to play. Continue to invest, though this spend may look different. Above all, stay close to your customers. Learn from them and be there for them when they need you most.
Every brand has to respond to its own situation but, building on our analysis of what we can learn from the past and what’s different this time, our report identifies eight golden rules that we believe apply to every brand.
Looking ahead, Rule eight provides the inspiration for optimism. Jack Welch once famously said “Never waste the opportunity of a good recession”, but the implications of COV-19 are more profound than that. The opportunity to learn new and better ways of doing things to ‘Build Back Better’ provides a North Star for all involved – for people, brands, businesses and their employees, for the environment, and society as a whole.
