Brands should be in preparation for recovery. If not, they will suffer all the downsides of the financial crisis and miss out on the rebound as the economy recovers.
A view from Keith Weed
There are moments like this, when there is such a shock to the business system, that it is possible for people not in our industry to forget the critical role that advertising has in connecting businesses and brands with customers and consumers.
As advertising and marketing professionals, it is up to us to remind people why advertising matters and why it matters now more than ever.
When businesses go through significant financial challenges, one of the first roles of a chief executive is to ensure the business will survive.
Cost reductions to ensure financial survival often result in reduced advertising spend, as we have seen recently across the industry.
It is therefore easy for businesses to unintentionally go into hibernation, when in fact they should be in preparation… for recovery.
If not, they will suffer all the downsides of the financial crisis of Covid-19 and miss out on the rebound as the economy recovers.
Chief marketing officers and their partners must grab the reins now and make the case for re-engaging in building brands.
I am a great believer that 80% of success is showing up and, frankly, while many brands have been present in consumers’ minds and hearts during the lockdown, equally there are many more brands that have significantly cut back on advertising and haven’t "shown up" at all.
That’s a dangerous situation to be in if you’re planning for your business to survive in the long term.
Now is the time for action. Now is the time for all of us to fight for investment to reignite growth.
Within our industry, we all know that advertising works and that, arguably, it is even more important to advertise during a recession than in the good times.
We collectively need to make the argument that while some of the rules of business have been rewritten during the lockdown, the basic need of brand awareness and communication of brand benefits remains key for brands to drive growth.
All economic forecasts point to a significant downturn, but while instinct might tell businesses to continue to tighten their spend, this would be short-sighted.
A Kantar/BrandZ analysis after the 2008 financial crisis showed that strong brands recovered nine times faster than others.
The painful truth is consumers forget. While all those people working on a brand still know and love it, new relationships are being made daily by your consumers with others.
Quite simply, without (sufficient) advertising, you become out of sight and out of mind.
I know this economic turmoil is different from the financial crisis of 2008, but there are things we can and should learn from those times.
I was CMO at Unilever at the time and my experience echoes the Kantar/BrandZ analysis. In 2009, Unilever increased its marketing investment by 4.8% and again in 2010 by more than 14%. Over the following five years, we increased marketing investment by more than €1bn.
During the nine-year period that I was CMO at Unilever, we grew sales turnover and profit every single year and more than tripled Unilever’s share price.
I mention this not only to validate the Kantar/BrandZ analysis but also to give encouragement to other CMOs to use this evidence to challenge your colleagues to invest in advertising to restart growth in your business.
The lockdown has meant that people have been consuming media like never before.
The latest Office for National Statistics’ figures show that time spent on entertainment has increased by 44 minutes per day.
We have also seen a large rise in online retail, where existing trends have accelerated at breakneck speed. Twelve years of change have been squeezed into 12 weeks and all this represents new opportunities for brands.
"Now is the time for action. Now is the time for all of us to fight to reignite growth"
There is one vital thing at the heart of any economic recovery and that is confidence.
Just as people regain confidence following the trauma of the last few months, we in business need to regain confidence ourselves.
As part of efforts to support the economic recovery, the Advertising Association is actively exploring the case for an advertising tax credit to help spur business investment and economic growth.
For example, a tax credit for advertising and marketing communications could encourage companies, particularly SMEs, to reinvest in advertising and this would all help to kick-start the economy and support job creation.
Clearly, we will need robust evidence and modelling to support such an initiative and we are working on this right now.
But we also need to adapt to stay relevant to people and continue rebuilding our bond of trust with the public, which research pre-outbreak showed has been in long-term decline.
To "build back better", advertising will need to keep reflecting the new normal for people in campaigns, whether incorporating social distancing rules or emphasising how the brand is on the consumer’s side.
Marketers have been champions of behavioural change and society needs this more than ever.
This isn’t just a government role. Brands can help and build relevance with consumers at the same time, playing a real and positive role in society.
Consumers and their interests must be at the heart of all we do. They are the ultimate source of recovery – both for our industry and the wider economy.
Let’s unite as an industry to show why advertising matters in building businesses and brands, the economy and jobs.
By doing so, we will not only be supporting our industry, we will also be helping businesses and people when they need it most.
Keith Weed is president of the Advertising Association. He is a non-executive director of WPP and in July he will add to his remit the same role at Sainsbury’s. He was chief marketing and communications officer of Unilever from 2010 until 2019
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