When the coronavirus crisis broke out at the beginning of the year, brands and companies found themselves in the middle of a situation with which they had no prior experience. They did not know very well how to act and what was the best decision to make, because they could not start from clear references. Treating the situation based on the economic crisis of the previous decade did not seem very tight, but also it was not known very well what to do when consumers, country after country, were becoming confined to their homes.The decisions, at least in advertising, were in three large groups, in which small companies but also giants of the market entered. On the one hand, there were those who reduced their investment in advertising and, therefore, although they did not disappear from the market, they did opt for a more austere position and a more limited presence.On the other, there are those who hit the pause button, stopping advertising and marketing while the bulk of the crisis lasted.
It was what Coca-Cola did, which Yemen Email List stopped advertising for weeks. The company was losing the outdoor consumer market (restaurants, cinemas, etc.) while its potential buyers were at home. Was it a good decision? For advertising media and taking into account that Coca-Cola is one of the main advertisers in the world, no. For the company, maybe not either.Coca-Cola is going to lay off 4,000 workers in Canada, Puerto Rico and the United States (although they will not be traditional layoffs but are called “voluntary separation”) and an amount to be determined in other countries.
Basically, the soft drink giant wants to cut its expenses by $ 550 million, after a sharp drop in sales in the last quarter. It was the biggest drop in 25 years.And, third and last group, are those who kept their investment in advertising equal or even more than they had planned to invest. As of June 2020, for example, Procter & Gamble’s annual ad spend was up 8.5%. Some companies even ran special campaigns for the coronavirus (so much so that there were advertising clichés ).But whether they have entered one group or another, as an analysis by Kantar on advertising and consumer brands has just shown, what they have done these months will impact their business lines and will do so not only during the coronavirus crisis but also during looking to the future.
In general, they remember from Kantar, although it is necessary to adjust costs and change the investment, brands should not abandon advertising at any time: even in times of disruption, they remember, it is necessary to continue advertising.How things change After all, advertising, they point out in Kantar’s analysis , has an effect on sales that goes beyond the moment. After a typical eight-week campaign, the average sales increase is 4.5% in the month after the campaign is broadcast.But this figure is not simply an addition, but rather what advertising allows to maintain. That is, these campaigns help to maintain the line of business, the weight it has in the market. If you decide not to advertise (and in a market as competitive as consumer goods), you can expect to lose sales and brand recall / penetration.
“Taking as an example a brand that generates sales of 10 million dollars in a period of six months, if the brand would routinely launch two campaigns in that period but decides to postpone or cancel them, it risks losing an average of 900,000 dollars in revenue “reads the analysis.Losing customers is a bad idea Furthermore, damaging market penetration is also problematic. 86% of the brands, according to Kan tar, that grew globally during 2019 did so because they managed to increase their weight in the market. Companies need to keep the consumers they have, but also always attract new buyers. These losses not only affect the exact moment in which they occur, but also have medium and long-term effects.