Advertising in a COVID-19 landscape

Editor’s note: Chris Hubble serves as CEO of market research and consumer insights firm Bastion db5, Los Angeles.

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 doors and many parts of daily 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: 

• Twenty-seven million Americans are receiving unemployment benefits as of August 27.
• Sixty-five percent of businesses reported a loss in revenue.
• Thirty-eight 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%. 
• Overall ad spend is expected to decline 20%.
• Fifty-one 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% when people are forced to stay home during a crisis.
• Facebook says it’s seen up to a 70% increase in time spent on the app.
• Influencers are showing a 40% jump in impressions.

Is pulling back marketing the way to go?

While advertising spend 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. 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 in 1990 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 depends on the brand, category and target audience. The only way to know is to conduct market research and see how behaviors are changing during the economic turbulence. Not only can market research help identify a brand’s target market, but it can also help determine where to spend precious advertising dollars. 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 target audiences where they are now. 

Unused marketing dollars could be put to better use in areas where we’re seeing growth like online video, social, television, over-the-top 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 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 help brands identify what customers expect from messaging. Making a misstep at this time could cause devastating results. I’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 a side effect of COVID-19 be increased market research resulting in smarter and more impactful marketing? Could brands better understand customer habits, values and what really matters to target consumers? Possibly! Brands will want to do their best to inform strategy and messaging before diving into this unique marketing atmosphere.