Marketing and Sales
Opinion Article
December 15, 2020

Should you stop advertising during the pandemic?

With the brutal reduction of the economic activity caused by the coronavirus pandemic, companies are taking a cold and hard look at their expenses. Advertising, which tends to be seen as a discretionary expense, is a natural candidate to be one of the first to be eliminated.

How should managers come up with a decision?

The first question is: should you stop advertising? The answer is simple: absolutely not! Communicating with customers is essential to any business, whether in good or hard times. If you stop communicating because you are afraid you may not survive, this will turn into a self-fulfilling prophecy,and you can be sure you will be out of business soon.

In this case, the second question is: should you continue advertising as if it were “business as usual”? The answer is still simple:absolutely not! The world is a completely different place from what it was just a month ago. Your marketing communication approach needs to be rethought in order to continue resonating with customers in this “new normal”. As a minimum,you need to adjust your message and probably your media channels as well. You may even need a full reboot of your marketing communication approach.

Thus, the third question is: how should you change your marketing communication approach? This time the answer is not that simple because the pandemic impacts different companies in different ways.

To make sense of these differences, consider two key questions: (1) can your business operate during the pandemic? and (2)does it have resources (e.g. money, people, assets, etc.) available for advertising? Putting these two questions together leads to the four scenarios illustrated below. Each of these scenarios requires a different approach to marketing communications.

 


The first scenario is the toughest one. Your business neither can operate during the pandemic nor has resources available for advertising.Consider, for instance, a travel agency. The business has virtually come to a halt and you are running short of resources. In this case, your priority should be to preserve your existing customer base, so that you can quickly reactivate it after the crisis (because, believe me, this too shall pass!). To achieve that, you can leverage word of mouth by stimulating conversations about travel to keep spirits high and your proposition relevant. You can launch discussions on social media, such as “what is the first destination you will visit after the pandemic is over?”, and curate existing content to enrich the debate. This does not require significant resources, as customers create most of the content.

The second scenario is a bit better. Your business cannot operate during the pandemic but has resources available for advertising. These resources can be cash reserves that you built, digital assets that you can deploy, and/or idle staff that can create shareable content. Consider, for instance, a concert hall. Business has come to a halt, but you have a large catalog of recorded performances at your disposal (which may be part of a separate business that is still running). In this case, your priority should be to maintain engagement around your offering so that you stay relevant and can quickly bounce back after the crisis. To achieve that, you can offer limited free access to your catalog or even organize events, such as synchronous streaming of famous concerts, that include audience participation. The idea is to leverage the resources you have available.

The third scenario is the opposite of the second one. Your business can operate during the pandemic but has no resources available for advertising. Consider, for instance, a brick-and-mortar retailer. Operations are overloaded, and you are struggling to keep up with effectiveness and efficiency. In this case, your priority should be to deliver the best customer service possible and make sure everybody knows about it. To accomplish that,you can leverage word of mouth by stimulating satisfied customers to give you positive reviews that will influence your search rankings, bring in new customers, and increase loyalty among the existing ones. This offers a great return on investment, since it brings incremental revenue while not requiring significant resources.

The fourth scenario is the one with the highest potential. Your business can both operate during the pandemic and has resources available for advertising. Consider, for instance, an e-commerce or a digital streaming platform. Demand has grown significantly, and operations are able to cope with this growth. In this case, your priority should be to scale up and focus on customer acquisition. To do that, you can leverage traditional acquisition channels, such as display and search. It is a massive opportunity, as even customers who may have been skeptical about your product in the past are now willing to try it. This will have a lasting impact on their consumption habits even after the crisis is gone, bringing sustainable growth.

In a nutshell, the pandemic is taking a heavy toll on companies in general. In this uncertain environment, two things are certain: (1) you can not stop communicating with your customers; but (2) you need to rethink your marketing communication approach. How do you find the best approach for your company? The matrix above is a good starting point.

This content was originally published in Blog Executive Education Nova SBE.

António Marinho Torres

Professor at Nova SBE, global marketer and general manager who has developed a management career in leading companies in both fast-moving consumer goods (Unilever and Mondelez) and technology (Nokia and Vistaprint).

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