Weekly Research Round-Up

Week of April 13 / What the Advertising Industry can Learn and Apply From Past Recessions

Kunal Gupta, Founder & CEO, Polar recently published an article* that assimilates some incredibly useful statistics for advertisers at this time. We know that ad spend is down and we are all familiar with the ways in which our industry is impacted by this situation. Grounded in research, Gupta offers us lessons we can apply as well as some reasons to maintain hope. Here's a summary:

From last week's article, we learned that businesses that continue to maintain share-of-voice and share-of-market during a downturn have shown a longer-term improvement in profitability that outweighed the short-term savings. To further that, recessions provide an opportunity for ad investment for businesses with lower market share and lower marginal costs to acquire customers. In other words, this can also be seen as an opportunity to win market share. He provides some real examples from past recessions, many of which are also outlined here.

Gupta quotes research done by Kantar to highlight the best ways to advertise in a pandemic:

  • 77% of consumers say they want brands to talk about how they are helpful in everyday life
  • 75% want brands to talk about their efforts to face this situation and 
  • 70% want brands to offer a reassuring tone
  • 63% of advertisers have already changed messaging
  • 42% have increased mission and cause based marketing


Creative was found to have five times as much impact on profit as did budget allocatio

 

This is the time to focus on building your brand

A 2008 study showed that consistently across channels, creative was found to have five times as much impact on profit as did budget allocation. The advice here is to leverage high-impact creative at this time. This is the time to pivot and get resourceful, we may see a lot of brands leverage social media creative in other channels. 

Additionally, we're seeing a shift towards more agile and trusted media platforms.

  • 13% of advertisers have already increased direct buys with premium publishers
  • 34% have increased mobile device targeting, knowing this is where consumer attention is today
  • 35% of advertisers have increased spend on CTV/OTT channels 


With a significant increase in media consumption now is the time to observe how different marketing channels will fare.

Gupta's key insight for brands and advertisers is to maintain perspective of the long term, there are still opportunities to be had.

 

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