[Article] Take a Scalpel to Your Marketing Budget, Not a Sledgehammer: COVID-19 Budget Cuts
By Jeanine Moss and Nicole DeMeo
As the economy slips into recession and marketers adapt to the new global reality of social distancing and working at home, it’s not just the game industry and Rolls Royce’s Emer2gent alliance that are pivoting to deploy marketing resources to support their industries and jump start the economy.
Smart marketers in every vertical know that sales must go on and the ground must be readied for growth. A host of new strategies are being used by companies to step out of competitors and raise awareness, build relationships and create partnerships that will last far beyond the effects of the COVID-19 crisis. These marketing leaders are taking heed of dozens of studies over the past 100 years, proving that communicating during a recession delivers better ROI than you can typically expect even in good times.
A study of the automobile industry over 60 years explored how new products launched during a recession fared against those introduced during growth cycles. The conclusion: proactive marketing in a recession led to improved business performance.
B2B marketers also see great returns from advertising in tough times. In the 1980’s, McGraw-Hill analyzed 600 B2B companies during recession and discovered that those who advertised during the 1981-82 recession had 256-percent growth by 1985 over competitors who cut or eliminated spending.
And when it comes to launching a new product, history also offers lessons. As the 2001 recession raged, Apple launched the iPod with a higher price and significant MP3 competitors. Then they did it again in 2007 with the iPhone.
In an extensive review and synthesis of research on advertising in a recession, the academic authors concluded that there is strong and consistent evidence that companies that did not cut back on advertising during a recession had higher sales, market share, or earnings with effects that persisted for several years after a recession.
But since this crisis is unlike any other, do the same principles apply? This time around, people may not have access to your product. They can’t attend movies and sporting events. Typical B2B lead generation sources like conferences are cancelled. And luxury goods and clothing solutions that let us express our individuality don’t make much difference when we’re all wearing sweats.
According to market research company IRi, consumers expect their lives to be very different post-COVID-19. New spending habits favor value and private label offerings. There is increased adoption of ecommerce and home cooking. People make fewer buying trips and purchase much more when they do – making them feel like prices are rising. Baking is trending way up.
Whether these changes bode well for your brand or not, eliminating or severely cutting your marketing budget now could leave you playing catch-up with more savvy competitors, lose crucial sales, risk your best customers, and reduce your share of voice – which ultimately means share of market.
This is the time to refocus your marketing objectives to maintain or even grow awareness, build relationships and brand equity, be a resource for employees, customers, investors and your supply chain, and focus on your core customers and best-performing products and services.
Unique though COVID-19 is, the way you address it still requires a marketing budget and adhering to a few tried and true crisis marketing rules: define your role as an organization, be sensitive to your stakeholders and what they need and expect from your brand, and have a clear vision for what success looks like. Plus, it doesn’t hurt that there is less “noise” in the marketplace and advertising rates are cheaper, either. You need your marketing budget.
Below are examples of organizations who are demonstrating creative marketing budget deployment by defining their role, addressing their market, and striving to thrive:
The Store is a landing page from WPP offering dozens of case studies of how global retailers are addressing the COVID-19 crisis. Read how Steak-umm went from a frozen steak producer to one of the most authoritative sources for COVID-19 information, and see Dove’s “Courage is Beautiful” campaign, among other inspiring examples. It’s also a great example of smart marketing for WPP’s Retail Practice.
U-Haul was quick to act in March as schools closed across the nation by providing 30 days of free self-storage to college students suddenly scrambling to move out of dorms and find new places to live. They also enabled third-party pay to allow family members to fund their kids’ return home.
&Pizza offers free unlimited pizzas for hospital workers and their immediate families. They also offer delivery for health care workers who are unable to leave their posts.
Everytable in LA is reinforcing its mission to provide access to healthy, fresh food at affordable prices by offering a link where concerned citizens can “Pay it Forward” by buying food for someone else for $6.50 per item.
Adobe gave higher education and K-12 customers temporary at-home access to their Creative Cloud apps through May 31, 2020 (or when schools return to campus) if they’re already customers.
Hyundai offers deferred payments for new and current owners, and up to six months of payment relief for new car owners who purchased a vehicle between March 14 and April 30th if they lose their jobs.
Marketing budget cuts may be a necessity, but performing them as surgeries rather than demolitions will enable you to move ahead, leave competitors behind, and position your company for future success.
About the Authors:
With more than 25+ years each in marketing, sales and communications, Outfront Solutions founders Nicole DeMeo and Jeanine Moss have guided start-ups, non-profits and large enterprises through some of the most disruptive business, political, natural crises and cultural shifts of our time. They invite you to reach out to them to help guide you through what you're facing.
About Outfront Solutions
From startup to IPO or exit, Outfront Solutions works with leaders to adapt their brand, marketing, and business development to build a new future for a new world. Tailor-made for entrepreneurs, intrapreneurs and visionaries, we increase the power and marketability of your products and ideas and help open doors and close deals. We identify growth strategies that help you nail revenue goals, increase valuation, raise the next round, or find the path to exit.
We’re CMOs and business builders who help organizations steer a course through complex business events, cultural shifts, and crises. By clearly defining and articulating your brand, developing a go-to-market plan, and creating business development approaches that break through the noise, we build a foundation for success.
We’ve rolled up our sleeves to create and implement global growth strategies for companies like Andra Capital, Glispa, Peak Games and Organic. Hewlett Packard and Accenture have relied on us to build their internal messaging capability and create their messaging guides used by tens of thousands of employees worldwide.
Along with bespoke services tailored to your needs we provide:
· Brand strategy and Positioning
· Messaging
· Investment/valuation positioning
· Market research and consumer/business testing
· Personal/executive branding
· Go-to-Market plans and implementation
· Business development
· Crisis response & communications
To learn more about this project and inquire about technology and cannabis industry Branding, Messaging, Go-to-Market Plans, and Business Development contact: Nicole DeMeo at Nicole@outfront.solutions and (415) 533-2599