The cost of living is undoubtedly one of the biggest challenges of our time, both personally and professionally. It’s very evident that consumer behaviour is adapting to the current financial climate. Given the nature of the situation, marketers are naturally considering the implications for their marketing communications.
When the industry suddenly woke up to the scale of the crisis earlier in the year, it was my experience that brands and the advertising industry felt like they needed to say something to consumers. This isn’t new, marketers often feel like their brands need a point of view on all the big issues. It was however quite clear that marketers didn’t quite know how best to approach the messaging.
So cue the inevitable industry research pieces that showed people expect brands to help them through the crisis. As ever, the interpretation was a simplistic one.
Ian Murray, my co-author of a number of studies we’ve published down the years, would call the industry response as an example of ‘straight-line thinking’. It goes a little something like this… the cost of living is the number one concern for the majority of the population, people want brands to help and this must mean that focusing on the cost of living will be an effective communications strategy. This has led to a number of campaigns which explicitly reference the cost of living. Most of it being fairly bland, and lacking distinctiveness. I also suspect there are a lot more to come, as the excitement of Christmas becomes a distant memory, and the harsh reality of the economic climate really starts to bite.
We’ve been here before of course. At the onset of Covid, brands immediately jumped to the ‘we’re here for you messaging’ which was brilliantly ridiculed by the viral ‘every Covid ad is the same’ video. As Mark Ritson pointed out in Marketing Week at the time, all the generic Covid ads were a waste of time and budget.
To get back to the matter at hand. Everyone has been so concerned about what to say, they haven’t taken a step back to consider whether they should say anything at all. The simple truth is that if you engage in the evidence, most brands (not all) don’t need to say anything about the cost of living in their marketing. In fact, it’s not a very good strategy and it won’t be an effective approach to selling your brands and products. Let me explain why.
While the marketing industry woke up to the cost of living crisis earlier this year, there is plenty of evidence that shows Britain has been in a perpetual and growing cost crisis for decades. According to The Joseph Rowntree Foundation, the percentage of the UK population living in poverty was around 13% in the 1960s. This grew to more than 20% by the late 1990s, and has remained around this level since.
Brands aren’t perceived as credible agents of social change or seen to be working in the interests of the greater good.
Data from the IMF shows household debt represented around 40% of disposable income in 1969, it’s now over 160%. What’s clear is that the current situation is very familiar to generations of people living in the UK. Where have the majority of brands been up to this point?
Given this, it’s hardly surprising the general public doesn’t believe brands are coming from an authentic position when it comes to communicating on the cost of living. Research I published earlier this year when working for Reach Solutions, found only 24% of UK adults agree brands have the credibility to focus on the cost of living in their advertising.
The same study found a number of factors driving this lack of credibility. People aren’t stupid, we’ve just hit the highest inflation rate for more than 40 years. Almost eight in 10 people expect brands to increase prices over the coming months, which makes it very easy for brands to fall into the trap of being seen as hypocritical and lacking in empathy.
With the cost of living perceived to be both a personal and societal issue, just 15% trust brands to act in a socially responsible way. Believe it or not, brands scored lower than the current government on this metric – ouch. As hard as it might be for some of you to hear this, brands aren’t perceived as credible agents of social change or seen to be working in the interests of the greater good.
Reach Solutions has also been tracking the factors that influence buying decisions for over four years. Value for money, product quality and reliability continue to be the main drivers, and this has remained remarkably consistent over time.
So how do brands communicate they ‘get it’ during these troubling times? This is where the industry needs to stop being seduced by the direct approach, i.e. an explicit cost of living message. Sometimes our goals can be best achieved indirectly. As researcher Ian Murray pointed out recently, the behavioural sciences show that “in moments of heightened risk and uncertainty, humans use fitness signals to mitigate risk and inform their decisions”. So, instead of focusing on the cost of living and increasing anxiety among your target customers, this is the perfect moment to be talking about your brand’s quality and reliability.
This will ensure stand out and distinctiveness in what might become a sea of bland, clichéd advertising in the months ahead.
Andrew Tenzer (@thetenzer on TikTok and Twitter) is an independent insight and brand strategist. He is the former director of market insight and brand strategyReach.