Adapting to new market realities

How brands should think about advertising during and post COVID-19.

IPA Director General Paul Bainsfair gives his take on how brands should think about advertising during and post COVID-19.

Harold Macmillan was once asked what was most likely to blow a Government off course, Macmillan replied: "Events, my dear boy, events". And so, it has been proved over and over again. Governments and Businesses make plans but it is their ability to adapt to sudden and unforeseen changes that will determine their success in the long run.

Never have we faced an emergency on the scale of the current COVID-19 crisis in peacetime and it has already prompted a £350bn bailout to save the economy. How businesses respond will determine not only their survival but their profitability for many years to come.

Yet brands have faced existential threats before, and many have shown a remarkable ability to act decisively and often counter instinctively in order to triumph in times of adversity. During World War II, the Government asked a number of food and drink brands to form wartime alliances to ensure the British people could get hold of staple products. For a couple of years individual brands disappeared and were replaced by generics. Despite this move, some brands took the decision to carry on advertising in the National Press. Their ads talked about how they would return after Victory. Schweppes and Stork margarine were two such examples, and after the War ended they saw their brand shares shoot up way past their prewar levels. Impero's Adapting to new market realities paper is a useful summary of how brands have survived all sorts of reverses and disasters, outlining what they did and how they avoided what seemed like an inevitable and irreversible decline.

If it whets your appetite for more, I also recommend The IPA’s Advertising in a downturn report, where the key findings are:

Cutting budgets in a downturn will only help defend profits in the very short term.
Ultimately the brand will emerge from the downturn weaker and much less profitable.
It is better to maintain SOV (share of voice) at or above SOM (share of market) during a downturn: the longer-term improvement in profitability is likely to greatly outweigh the short-term reduction.
If other brands are cutting budgets, the longer-term benefit of maintaining SOV at or above SOM will be even greater.

IPA Director General Paul Bainsfair wrote this as a foreword to Impero's 'Adapting to new market realities' report.