Coca-Cola ‘pauses’ marketing spend over lack of effectiveness
The debate over whether brands should continue advertising during the coronavirus pandemic has split the ad industry down the middle. Some believe that continuing to spend sets brands up for long-term growth, others that it simply isn’t effective given the unprecedented situation many companies and economies are now in.
Much, of course, depends on a brand’s circumstances. Much easier to continue advertising if demand for products is up – as is the case at Procter & Gamble – than if it has flatlined (as it has for most in the travel sector).
Coca-Cola, therefore, is an interesting case. It has seen sales fall by around 25% due to coronavirus and associated lockdowns but almost all of this decline has come from out-of-home. Elsewhere, people were stockpiling Coca-Cola and sales remain resilient in supermarkets.
That makes its decision to “pause” almost all its advertising an intriguing one. The company says it simply isn’t effective to advertise at the moment, with a lack of ROI a key concern. Others, however, see now as a good time to advertise, with Unilever speaking of lower media rates making it cheaper to get the reach and frequency it needs.
Coca-Cola cites a need to be “relevant” as a reason for stopping advertising, talking up the work it is doing in communities. But it should be wary of going dark – a company with such recognisable brands should be able to come out of this stronger than it went in.
BT sees its role as a public service communicator
It was not so long ago that BT’s marketing boss Pete Jeavons described it as a “brand that stands for nothing”. His comments came as part of an overhaul of the company to showcase its work beyond being a telephony company – whether in security, apprenticeships or digital skills.
And so, while other brands have taken a generic ad route of talking about “being there” for customers, BT is trying to practise what is preaches. Its new campaign is a bold one – ad takeovers where celebrities such as Clare Balding go through the details of useful digital skills such as how to use WhatsApp or download a podcast.
It’s a brave move to put these celebrities on screen for three minutes 30 seconds simply to explain how to use WhatsApp. There’s little BT branding and no product being pushed. But Jeavons says he wants BT to “take this position of almost being a public service communicator”.
That’s something we’ve seen the likes of the BBC and Morrisons doing during this crisis – using comms to help consumers. For those that get it right the rewards are clear but only a few brands are able to operate in that space. BT hopes it is one of them.
Job prospects and marketing budgets feel impact of Covid-19
Marketers are preparing for significant job losses amid the Covid-19 pandemic, with almost a third planning to reduce employment over the next three months.
This is according to data from the IPA’s Bellwether report for the first quarter of 2020, which for the first time since it began tracking the measure in 2016 shows marketers expect overall levels of employment to be lower in three months’ time.
This compares to 17% of marketers who hope to expand hiring and just over half who foresee no change in staffing levels.
It is not surprising that the challenging social, health and economic environment has had an effect on marketers’s outlooks. But it is also important to note that almost 70% of firms hope to either hire more staff or keep employment levels unchanged, showing measures by the UK government aimed at curbing unemployment have had some success.
Unsurprising, also, that marketing budgets have dropped at their fastest rate since the last recession. But again, there are positive signs that companies still plan to grow their businesses and brands, with marketers expecting there to be sharp rise in budgets over the coming year.
The UK is still adjusting to its ‘new normal’ and the uncertainty this brings is reflected in the Bellwether data. Even when there is more certainty with regard to Covid-19, uncertainty about Brexit will no doubt creep back in.
We can only assume the Bellwether will feel the impact of marketers’s uncertainty for some years to come.
Emily Crisps runs outdoor campaign during lockdown
After realising its first outdoor advertising campaign wasn’t going to be seen by many people after the UK went into lockdown, snacking brand Emily had to change tact quickly.
Still wanting to use the media it bought back in December, Emily put the original campaign on hold and instead decided to use the space to call out its marketing misfortune.
Four tongue-in-cheek poster ads are currently running on digital six-sheets across the UK with lines including: ‘Our first ever poster, seen by a runner and one pigeon. Typical’ and ‘Hmmm…Maybe we should have made a TV ad instead’. Photos of these ads are being shared on social media with the #stayhome hashtag.
Emily, which is owned by Nurture Brands, is still a relatively small and new brand, and could have easily gone into panic mode and thrown the campaign out the window when the lockdown was announced.
Instead, it reacted quickly and did what it could with what little time it had. While the campaign won’t have anywhere near as many outdoor eyeballs as planned, its humour and relevance gives it the potential to create even more impact and cut-through than the original creative.
A nice example of quick and clever marketing from a brand with a small budget, this will no doubt stick in people’s minds beyond lockdown.
John Lewis warns sales could be down by a third
We all knew the Covid-19 outbreak was having an impact on retailers but we are starting to get an idea of the extent of that. High street stalwart John Lewis released an update this week, alongside its annual report, and the numbers don’t make for easy reading.
First, the good news. Online sales are up 84% year on year since the middle of March, a “significant spike”.
Now, the bad. That spike is not enough to offset the loss of sales from its closed high street department stores, meaning sales are down 17% overall since the middle of March.
Plus, many of those sales are in less profitable lines – people are buying “more Scrabble but fewer sofas”. It is warning sales could fall by 35% under its worst case scenario.
Figures from the ONS reveal the extent of the challenge facing retailers. In total, sales were down 5.1% in March, but this includes food where sales have been strong. In clothing, for example, sales slumped by 34.8%.
The pandemic is laying bare business models that weren’t built on solid foundations and accelerating the shift to online. To weather the outbreak, retailers will have to make some tough decisions.