Marketing and advertising efforts have been substantially impacted by the COVID-19 pandemic. Stay-at-home orders prompted marketers to pull advertising in a rush to figure out how best to reach customers during this sensitive time. Businesses had to shutter their doors and many parts of everyday life, which often include shopping, dining out and partaking in entertainment, are no longer an option.
A COVID-19 recession is officially here, and the recovery could take a long time. As marketers strive to carve the right path and re-establish a presence, market research can provide the information they need to get it right.
What does the economy look like now? Here are a few data points to keep in mind:
- 33 million Americans have filed for unemployment benefits as of June 20
- 65 percent of businesses reported a loss in revenue
- 38 percent of employers reported that they may have to lay off workers
- The U.S. could lose up to $347 billion in GDP
How is marketing being affected by the lockdown and economic downturn? Here are some stats:
- Ad revenue on Google is expected to drop for the first time ever, down 5.3 percent
- Overall ad spend is expected to decline 20 percent
- 51 percent of advertisers expect to spend less in 2020 than they did in 2019
- TV usage (Live TV/DVR/video-on-demand/streaming/gaming) has been shown to surge 60 percent when people are forced to stay home during a crisis
- Facebook says it’s seen up to a 70 percent increase in time spent on the app
- Influencers are showing a 40 percent jump in impressions
Is pulling back marketing the way to go?
While advertising spending is going down, engagement in many areas is going up as people are stuck at home and trying to find ways to entertain themselves. There’s evidence that maintaining a presence, even in economic distress, can be beneficial to brands. By cutting marketing completely, brands risk losing market share, giving way for competitors to jump in and capture the attention of their target market.
Stephen King, a pioneer in advertising, wrote extensively about brands that maintain marketing through recessions faring better and leading the way out of recession. The idea of keeping a marketing presence during an economic downturn has been proven time again to provide several benefits to brands. As demand drops due to companies halting marketing campaigns, the cost for impressions or placements also goes down. When competitors pump the brakes, businesses can increase their share of voice by buying up those abandoned placements at a lower cost. By maintaining a consistent presence, brands ensure that they remain top-of-mind for consumers. Brands will also show their stability – something that will be attractive to consumers, especially for big purchases down the line.
What can market research do?
Ultimately, the choice to pull back probably depends on the brand, category and target audience. The only way to know is to do market research and see how their behaviors are changing during economic turbulence. Not only can market research help identify a brand’s target market, but it can also help determine where to spend those precious advertising dollars in times of flux. With the cancellation of big events like sports, in-person entertainment and award shows, there’s advertising spend that can be moved around to meet the target where they are now.
Those unused marketing dollars could be put to better use in areas where we’re seeing growth like online video, social, television, over-the-top (OTT), or even other marketing channels. With consumption patterns leaning toward channels that are easily accessible from home, it makes sense that businesses are trying to shift and find their audience in different places. However, the only way to truly know where the right audience is now is to do some market research and learn about their media consumption patterns during the pandemic.
What messages are most compelling in these times?
As you can imagine, the same marketing message that worked before the pandemic is unlikely to work now. Market research can also help brands identify what their customers expect from their messaging. Making a misstep at this time could cause devastating results. We’ve seen big shifts in the focus of research to understand changing consumer behaviors and attitudes. Testing multiple messages and offers will set a brand up for success and ensure that its message is well received.
Market research sheds a light
There’s a lot going on in the world right now, and it can be hard for brands to know how to move forward in the middle of not only a global pandemic, but one of the largest economic downturns in our history. The best way for brands to stay on top of the situation is to conduct market research. This will help them identify their target audience’s new media consumption behaviors, and determine which messages are right for the climate.
Could it be that a side effect of COVID-19 will be increased market research resulting in smarter and more impactful marketing that aligns better with brands customer bases habits, values and what really matters to their consumer? It makes sense! Brands will want to do their best to inform strategy and messaging before diving into this unique marketing atmosphere.