During the ongoing pandemic, brands need to work out how to match tightening budgets with consumer demand. Henk Campher, VP Corporate Marketing at Hootsuite looks at how, regardless of budget cuts and uncertainty, brands can embrace a different way of engaging with consumers effectively and efficiently.
Let’s be honest, it’s been a tough first half of the year. COVID-19 has wreaked havoc on business over the past few months and forced industry leaders to adapt their strategies to survive. Unfortunately, when faced with uncertainty, it is often the marketing and advertising teams that bear the brunt of it. With ad spend down for the first time in a decade and projected to fall by a total of 8.1% in 2020 — a loss of £39.7 billion — brands will do anything to survive. For businesses to come out the other side of this pandemic, they need to work out how to match tightening budgets with customer demand, especially as 52% of the UK believe advertising should continue as normal during the pandemic, according to Hootsuite’s Digital 2020 Q3 update.
Managing ad spend
When it comes to planning around ad spend, there’s definitely no one size fits all solution. It will differ from brand to brand, but one constant should always be looking at it from the perspective of what’s right for the business and their customers. Over the past few months, we’ve seen some of the biggest advertisers make huge decisions when it comes to advertising spend, but it’s still unclear who, if any, will come out on top.
Take P&G and Unilever for example. Both promote similar products — beauty, home goods and healthcare, but they each took very different approaches to ad spend budgeting during the height of lockdown. P&G accelerated its ad spend to ensure the “mental availability of its brand when physical availability may be lacking”. Its goal was to “remind consumers of how it met their family’s needs during difficult times”, which will likely prove highly beneficial for P&G in the long run, in terms of both brand awareness and customer perception and loyalty. In terms of results, this reminder to consumers of the products P&G sold, at a time when they needed them most, saw a 5% increase in its Q3 sales, sending its shares soaring in April. In contrast , Unilever halted all major advertising production, with CEO Alan Jope stating that “stocking up patterns is a change in buying patterns, rather than increased consumption” believing therefore that it might not be beneficial in the long run to react to such sudden and potentially temporary changes in consumer buying patterns. In April, Unilever saw sales grow by 2.8% in developed markets, showing that despite the decision to halt on advertising, it still managed to yield reasonable sales growth.
Elsewhere, other brands are already reaping the benefits of being nimble in the way they connect with consumers. L’Oreal, for example, was able to react quickly to the pandemic and heavily invest in digital marketing tools, such as virtual try-ons for make-up and hair colour. As a result, e-commerce has thrived for the brand, with total ecommerce now accounting for 20% of all sales, an increase of 53% compared to the same time a year earlier. According to the data from Hootsuite’s Digital 2020 Q3 update almost half of all internet users expect to make more use of e-commerce even after the outbreak is over, so L’Oreal should be poised to continue to reap those rewards.
These brands all took a markedly different approach to ad spend in recent months, but each brand did what they thought they needed to do to protect their business. P&G increased spend to support consumers, Unilever halted it to ensure business continuity, while other brands such as L’Oreal quickly became more digital.
During a crisis — whether a global pandemic or negative news cycle — it’s so important to get the marketing strategy right. Marketing is the relationship brands build with their customers. It’s through these interactions brands can build a rapport that will benefit them long after the crisis is over. And, even with a reduced budget, a successful marketing strategy is possible. How?
Social media — a cost-effective, communication solution
Social media is one of the most cost-effective tools when communicating with customers as production costs can be kept to a minimum and there isn’t always a need for ad spend. With the right tactics behind it, brands can increase their engagement and thus their brand awareness and sales. In order to do so, there are a few simple steps for brands to follow:
- Define the goal
- Brands are likely to have shifted their long term goals since the beginning of the year to keep up with changing customer demand and brand activity. But, they must also plan for the now, and explore how social will contribute to their goals, both in the short and long term. Brands should also clearly articulate what their followers gain from interacting with their brand on social. For example, if educating people is where a brand shines, then the engagement strategy should focus on sharing resources and giving advice.
- Know the audience
- To build strong relationships on social, brands have to immerse themselves in their customers’ needs, desires and pain points to ensure the content they’re posting will resonate. By adopting social listening, Clarins, UK was able to improve its brand sentiment and customer services, as they had a holistic view of how the brand was perceived on social media and could actively inject themselves into conversations with their customers online.
- Stay topical
- To engage audiences, brands must have a voice on current events and show what they stand for. Take Unilever as an example, to help tackle the pandemic it donated €100m of soap, sanitiser, bleach and food to emergency efforts. Maintaining communication and keeping audiences up-to-date on how brands are planning for the future, protecting employees and keeping consumers safe has never been more important.
Despite lockdown restrictions easing in some parts of the world and optimists hoping the worst of the pandemic is over, brands still face uncertainty about their future. There is no script for a situation like the one we have all been in and across the board, — from P&G, to Unilever, to L’Oreal, companies of all sizes have taken different approaches to navigate their way through COVID-19. The important thing to note is that they all did so with their customers front of mind. While it may be too early to tell if there are any big marketing wins, one thing we can all agree on is the importance of customer relationships and that brands shouldn’t have to break the bank to make and keep them.
By Henk Campher
Vice President Corporate Marketing