How can brands justify their advertising investment in an economic downturn?
The VAB looked at over 100 years of data and found that in an economic downturn, the most serious consequences come when bands stop advertising.
In an interview with Beet.TV, Danielle DeLauro, executive vice president of VAB, explores what trends data supports for media investment during COVID-19.
VAB and Beet.TV are launching an upcoming series called “TV Reset” that chats with industry leaders about consumer behaviors during the pandemic.
Much of this partnership is linked to the consumer study that VAB did called As Time Goes By: How Media Consumption is Helping America Cope.
“Let’s peel back the curtain and be able to hear of how they’re dealing with the flexibility that I know that marketers are looking for,” DeLauro says.
“What’s going on with live sports, I know there’s a lot of questions about that, about programming, and the programming hiatus that’s going on now and how that’s going to be dealt with, and overall how they’re just talking to each other about marketers expectations and what’s going to happen in the future.” DeLauro highlights two main takeaways from this study.
The first is that maintaining a share of voice now will cost brands less in the future.
“When I say maintain your share of voice, that doesn’t mean that you have to maintain your spend,” DeLauro says.
“It just means that you have to maintain where you are compared to your competition.
And sometimes your competition in an economic downturn starts to spend less, so that means you can actually spend less but still maintain your share of voice in the marketplace.” The second takeaway is that right now is a particularly good time to advertise.
In the 2008 recession, there were many brands, like Walmart and T-Mobile, that were able to catapult their business because they leaned into the downturn and in many cases doubled down.
Many of these success stories put a particular focus on brand building.
“What we’ve seen since the start of COVID-19 is a lot of DTC and challenger brands are doing the same thing,” DeLauro says.
“They’re looking at this as an opportunity to go out and build their brand and try to take share in those marketplaces.” Nerdwallet, Tommy John, and Grubhub are three examples of brands using the current downturn as a way to gain brand awareness.
Direct-to-consumer brands, in particular have increased their spend in television, specifically, because they have some of the best data and analytics in the industry, and TV is what is giving them the clearest results.
“I think that’s something that legacy brands should really be aware of and consider if they’re thinking about pulling back their spend,” DeLauro says.