By Marianne Vita, SVP and Director of Integrated Strategy & Marketing, VAB
Amid widespread health, economic, political and cultural turmoil, marketers are calling into question everything—budgets, media strategies and messaging—and wondering how the current environment will impact their upcoming plans. But despite talk of severe disruption and “new normals,” fundamental marketing principles that have guided brand stewardship for more than a century still apply. Let’s look at how brands can adapt the foundational tenets of brand building to guide their decisions in a tumultuous world.
Brand Building in a Crisis Increases Long-Term Profitability
Despite the proclivity for brands to decrease or freeze ad spending in the face of economic and societal crises, more than a 100 years of data and case studies have demonstrated unequivocally that brands maintaining or increasing their spending reap significantly greater long-term benefits than those that cut spending. The reason lies in the well-researched equilibrium that exists between brand share of voice (SOV) and share of market (SOM). A brand’s market share is a function of many things, but one of the proven biggest drivers of sales is a brand’s share of voice. The more a brand spends on advertising vs. its competitors, the more its SOV will grow.
We saw this principle play out during the Great Recession of 2007-2009. Across categories, brands that focused on brand building through increased TV investments grew throughout the downturn and emerged strongest on the other side. Walmart, for example, significantly increased its TV investment in 2008 and 2009 and saw high single-digit sales increases in each of those years, and beyond. Similarly, T-Mobile moderately grew its TV investment in 2008 and 2009 and saw a compound annual growth rate of 21 percent between 2008 and 2011.
That said, brand building is more than an economic formula. Brands play an essential role in times of crisis, as people look to them for reassurance and to help them navigate challenging times. That includes addressing the ongoing racial unrest in our country. Recently, brands that have increased diversity within their ads or have launched inclusivity-specific campaigns have seen significant sales growth. In fact, a recent study found that brands with the most culturally and demographically representative ads saw an average stock gain of 44 percent over a seven-quarter period, and brands with the highest diversity scores showed an 83 percent higher consumer preference. In 2018, when Nike went a step further to take a political and social stand via its support for Colin Kaepernick, the company saw a 31 percent sales jump.
Likewise, P&G has in recent years taken on racial equality issues head-on with spots like “The Talk,” which addressed the conversations Black parents have to have with their children about racism; “The Look,” which takes on racial prejudice; and “The Choice,” which calls on all people to be anti-racist. According to Bloomberg, P&G posted its best sales growth in over a decade for FY 2019 and its biggest sales rise in decades for the quarter ending in March 2020.
But it’s not just megabrands. In December 2019, Zola debuted its “No Regrets” campaign, which focused on diversity and LGBTQ+ inclusion. Zola saw its highest total monthly unique website traffic ever in January 2020, two months into the campaign launch, with 345,000 more digital visitors than its second highest-trafficked month (January 2019).
Moment-Specific Messaging Builds Loyalty, Perception, Purchase Intent
Particularly in times of uncertainty or unrest, purpose-driven, emotional messaging helps to nurture relationships with consumers. According to a VAB survey of consumers at the outset of the COVID-19 pandemic, 52 percent of all consumers agree that advertising messages specific to COVID-19 positively affected their perceptions of a brand. (This rate of agreement was even higher among multicultural audiences, high-income households and households with children.) Furthermore, 55 percent of consumers are more likely to purchase from companies that are lending resources or helping local communities during the pandemic.
Marketers have a unique opportunity to build brand love with consumers, thereby increasing consideration in the short and long term, through messaging relevant to societal crises. Following widespread lockdowns this spring, we saw brands like Tylenol meet the moment with TV messaging like, “Stay Home. For Them. For Each Other.” Meanwhile, Jack Daniel’s made powerful use of the song “True Colors” overlaid on scenes of creative social distancing and the message of “Dear Humanity, cheers to making social distancing, social—With love, Jack.”
Combining Brand Building with Short-Term Tactics Helps Brands Move from “Survive” to “Thrive”
To maximize the impact of their spending, marketers should select media vehicles and platforms that offer the scale and immediacy to drive short-term demand while also building equity through storytelling. In recent months, many brands have turned to multiscreen TV to emotionally connect with consumers by emphasizing purpose over product to build long-term brand equity, while also driving short-term, rational benefits.
Consider GrubHub, which quickly and effectively went to market in the pandemic with the message of, “Together, we can help save the restaurants we love.” The commercials are powerful expressions of community and the importance of banding together in a time of crisis, but they also are a strong call to action that encourages immediate consumer purchases.
Similarly, at the outset of the pandemic, Verizon was quick to market with its “We are here. And we are ready” TV campaign, which conveyed the brand’s long-term commitment to its customers’ communication needs. Meanwhile, the brand also launched messaging around its “Disney+ on us” promotion, driving immediate demand among new subscribers with a relevant partner offering.
Despite the utter turmoil that is 2020, the fundamental principles that build strong brands for the long haul are more applicable today than ever. So while change might feel like the only constant right now, remember: The guide to navigating these turbulent waters has already been written. Now is the time to invest in your brand, lean into your customer relationships and—above all—build toward the brighter future that is on the horizon.