COVID-19 has transformed the global advertising economy from a 6.2% growth rate in 2019 to a double-digit decline this year. ​

Canada is expected to experience a more modest drop this year at -5.1%. The decline is modest given the scale of the impact of the pandemic on global GDP, which will fall more significantly than it did in the 2009 global financial crisis when GDP declined by -1%. That year, global advertising fell by -11.2%​

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Why Brand Building Matters In a Recession​

Going ‘dark’ carries high risk of share loss and greater price sensitivity – expect 5-year recovery period and major loss of profit in recovery​

  • ​Short-term promotional strategies lead to dependency and profit loss​
  • Innovation is a better short-term strategy​
  • Maintained or increased marketing spend brings short term hit to profitability during recession but much stronger growth to profitability in recovery​
  • ​Be guided by the SOV/SOM rule: maintain positive ESOV (may be possible with reduced spend)​

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Learnings

1. Focus on the long term

  • Short-term activation makes less sense in this recession than in the last​
  • IPA data suggests that a brand activation shift to 50:50 might have been optimal in 08/09 – but unlikely now except for the ‘fortunate few’​
  • Typical businesses already spending <50% on brand building​
  • Focus on brand building unless survival depends on servicing existing customers (assuming this is possible)​
  • Advertising benefit is for the recovery not the recession​
  • Don’t overlook brand building by acts of humanity and generosity​

2. Defend Your Share Of Voice​

  • Strong relationship between SOV (Share Of Voice) and stable SOM (Share Of Market) ​
  • The penalties of allowing SOV to fall below SOM are greater during recession​
  • As are the benefits of maintaining or raising SOV above SOM​
  • This may entail no extra spend​
  • Rebuilding lost SOM in recovery will be expensive and borne by a less profitable brand​

3. Seize Your Market Opportunity​

  • The cost of SOV falls during recession ​
  • Plus in this recession we have elevated usage of certain media by home-bound consumers: TV, social, trusted online news channels​
  • Opportunity for lower-cost growth than during normal times​

Summary

  • Defend SOV (unless short-term survival is at stake)​
  • ​Take advantage of cheaper SOV to drive growth in recovery, if you can​
  • ​Don’t throw away a good brand campaign​
  • ​Emotions work during recession​
    ​Behaviors are especially important in this recession: be innovative. Ask yourself “How can we help?”​
  • ​Postmedia works with many advertisers to assist them in achieving their marketing and advertising goals. ​
  • ​Advertisers that have maintained or increased ad spend during the pandemic downturn have had positive results advertising on Postmedia Network platforms.