The hidden danger for brands: the twin threats from recession.

By - CTL
June 26, 2020
0

By Peter Field

The Covid-19 recession may have some unusual characteristics, but the arguments in favour of continued brand investment remain as powerful as ever.

Before Covid-19 hit, there were mild grounds for optimism that business leaders were beginning to realise the dangers of the growing obsession with performance marketing. Specifically, that without the benefits of a strong brand, performance marketing simply becomes an arms race for the last moment of consumers’ pre-purchase attention.

There is no sustainable competitive advantage in performance marketing – only a strong brand can provide this. With Adidas’ high-profile admission last October that it had over-invested in performance at the expense of brand-building, there seemed to be a growing consensus among brand owners that the pendulum needed to swing back to brand to restore the balance.

Then the lockdown hit and it became clear that progress was not that well established. Brand budgets appear to have evaporated, with high-profile advertisers announcing that there was little point in spending on brand marketing when customers were not buying, yet that same scenario somehow supports the use of performance marketing.

This is exactly what many opted to do in 2008. Yet how many global financial crisis brand success stories were actually driven by performance marketing?

In fact, in 2010 several success stories were submitted to the IPA Effectiveness Awards that were founded on brand-building, but this learning was drowned out by a tidal wave of performance marketing. This has been eating away at the strength of brands ever since, leaving us in a much weaker position as we now enter this latest recession.

“The brand investments we make now are to ensure our brand has a successful recovery”

The brand investments we make now are to ensure our brand has a successful recovery

The Covid-19 recession may have some unusual characteristics that are likely to amplify the normal patterns of downturn and recovery, but the strongly grounded arguments in favour of continued brand investment remain as powerful as ever. The brand investments we make now are not primarily concerned with fighting for scarce sales right now: they are to ensure that our  brand has a successful recovery.

While brand media costs are low, but audiences are high, we have an exceptionally affordable opportunity to strengthen the brand. This will create the mental availability that will grow market share.

Best of all, every pound we spend will work harder now than it ever could in the recovery phase, when media markets harden and competitive activity intensifies. For any business that can find the resources and understands how brand advertising works, it is a no-brainer. And it certainly makes a lot more sense than switching to performance marketing that will do little to help the brand in recovery.

So, marketers have two battles to fight and win in this recession. The familiar battle to preserve at least sufficient advertising budget to maintain equilibrium share of voice and mental availability.

And the new battle to resist the pressure to go short-term. They must win both battles if we are to avoid the hidden danger of recession: the retreat from brand marketing.

Peter Field is an independent marketing consultant and co-author of The Long and the Short of

Leave a Reply

Your email address will not be published. Email and Name is required.