COVID-19: Why now is the time to keep tracking your brand
With the COVID-19 (coronavirus) outbreak continuing to cause profound shifts in consumer attitudes and behaviors, many organizations will find themselves looking to reduce marketing and research costs as a way of providing some short-term relief. While some cost savings are inevitable, the evidence from past recessions is clear — taking your eye off the ball when it comes to brand tracking could be risky.
Faced with looking to find cost savings in the current environment, many will be taking the logical course of action and looking closely at their advertising spend and big-ticket research items like their longitudinal brand tracker.
However, there’s a vast body of empirical research and evidence available on the subject that suggests this is not the place to find savings. In fact, such actions may well be risky, and may leave some organizations wrong-footed once the pandemic is behind us.
Is cutting back on marketing budget the best approach?
Unfortunately, for some companies, there isn’t a choice: cutting costs is the only option left for a chance to survive. For any other firm, and based on multiple meta analyses of past recessions, it appears that organizations would mostly benefit more from protecting or increasing marketing spend in a recession as opposed to cutting budgets (naturally, when they can afford to do so).
Firms that increased marketing spend during past recessions typically experienced higher sales, market share, or earnings during or after the downturn.
In other words, cutting back on marketing spend or removing media will likely hurt sales, not only during but also after a downturn.
Moreover, those studies also showed that the effects associated with cutting budgets mostly persisted for several years after the recession. If you cut your spend, it may be years before you see a return to positive outcomes e.g. long-term profitability, or increased penetration.
While many would rightly point out that the Covid-19 crisis is unprecedented and unlike any recession that’s come before, the reasons that support the evidence cited above appear ‘to hold’ in the Covid-19 context at hand.
For instance, cutting advertising, especially if your direct competitors do not, will likely lower your share of voice (SOV): the % of category advertising expenditure spent by your brand. In light of the evidence linking share of voice (SOV) and share of market, allowing SOV to sit below market share seems to be very risky as your market share is more likely to drop the following year.
Based on the evidence available, it would therefore seem crucial to maintain or boost SOV in times of a recession to promote business gains instead of cutting drastically. While this may first appear to be ‘illogical,’ multiple studies have suggested it is important to achieving longer term performance following a downturn.
As always, evidence trumps logic.
Should I stop tracking my brand?
You cannot see and plan for what's coming if you aren't looking. Here again, a logical argument in favor of stopping all tracking activities would be: “current attitudes, behaviors are not representative of normal times, therefore, there is very little point in capturing KPIs we can’t even relate to historical data. We are better off placing our tracking program on hold, and wait for things to go back to normal.”
First, it would probably be a mistake to assume things will simply return to ’normal’ post Covid-19. It would be equally wrong to suggest that the world has been changed forever, but one can reasonably expect a change in multiple areas of consumption going forward, at least in some categories.
New habits or preferences for brands may have formed, and some of these may stick going forward. As a result, while many brands can expect to see a lift in demand when national lockdowns are eventually lifted, a return to previous levels of demand or past behaviors in the short term is very unlikely. Some things will have changed.
Second, a decision to stop your tracker likely reflects the widely held view of trackers as a cost, not an investment, and a focus on short-term/tactical perspective on brand performance at the expense of a longer-term/strategic response.
However, multiple studies have precisely shown that upweighting the brand is probably the best thing to do in a recession — a strategy a tracker can help inform if designed to support investment decisions toward appropriate activities.
Instead of pulling the plug on your tracking effort, we would advise trimming the instrument and focusing on the bare brand and category essentials that help you anticipate performance and plan ahead both in the short and longer term.
Needless to say, we do encourage careful evaluation of your questionnaires for appropriateness, and would strongly advise that research invitations acknowledge the times we are living and express appreciation for participation.
With such precautions, and a survey revision that excludes modules that are not needed at this time (e.g. imagery attributes, recent behavioral measures), a cheaper, thinner brand tracker will give you the valuable information that you need to make better decisions to navigate the crisis.
The real decision is not between canceling or keeping, but rather one that calls for some compromises. Keeping the lights on as the world around us is in flux is probably your best bet.
We recently launched our COVID-19 Brand Trust Pulse, and made it free for anyone to use to help organizations through these testing times.
Check out the video below to see how it works:
Keep your finger on the pulse of your market, brand, and competitors with BrandXM
1. Gerard Tellis and Kethan Tellis “Research on Advertising in a recession” which was published in Journal of Advertising Research in 2009
2. Roaring out of a Recession by Ranjay Gulati, Nitin Nohria and Franz Wohlgezogen, in Harvard Business review - March 2010
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