CEO & President Member Newsletters
2Q 2020: Learning from Past Crises: Some Observations from the CEO of the ARF
This is a challenging time for everyone in the ARF community and I want to express my appreciation for your ongoing support and encouragement. The ARF exists to serve the needs of its members, and we have never been more focused on that than in the present moment.
It is often said that the COVID-19 crisis is unprecedented, and, in many respects, that is true. Our lives and our economy have changed so quickly that 30 days ago seems like the distant past. We reach back for analogies from prior crises – to 9/11 or to the financial collapse of 2008 – for perspective and guidance. And though each trauma has its own unique features, we have learned enough from the history of prior crises to have a view on best practices for weathering the present storm. Indeed, the ARF itself was founded in a time of crisis – in the depths of the Great Depression. Since then it has studied how businesses have responded, for better or worse, to economic downturns, wars, epidemics, social convulsions, terrorist attacks and natural disasters.
These crises put everyone through a stress test, with some companies suffering long-term damage and others ultimately rebounding strongly in the recovery. From the long and fairly consistent literature on past crises, I would offer the following pieces of advice:
- Remember that this too shall pass. Epidemics run their course. Market downturns reach their limits and then markets begin to grow again. Though we don’t know the timing of these turns, we need not only to survive the downturn, but also to plan for gaining share during the post-crisis expansion.
- If possible, continue to advertise. Though advertising is frequently one of the first things to be cut in a financial crunch, research from past crises consistently shows this to be perilously short-sighted. Brands that “go dark” take 5 years on average to recover market share. Media prices tend to fall in times of crisis even as media audiences swell, so smart brands capitalize on short-term media market distortions and gain share of voice at bargain prices. In some cases, it will make sense to diversify your media mix to get greater reach at lower costs. The key is to try to make sure that your share of voice is greater than (or at least equal to) your share of category; brands that follow that rule generally emerge from the crisis with enduring market share gains.
- Tune your creative and messaging to the moment. In a time of social distancing, you can’t be using ad creative that shows large crowds of people partying. Be sensitive to the anxieties and emotions of the moment. This is the time to express empathy, nobility and enduring values. This is the time to tilt toward brand building and brand equity – away from activation, short-term sales and performance marketing.
- Remember that everything you do is advertising. Advertising is not confined to paid media. Companies that retool their manufacturing to supply needed medical equipment, who help with logistics or distribution of needed supplies, who step in to help distressed businesses, communities or institutions – these companies are engaged in advertising by other means. Especially in an era of social media, everything you do reflects on your company or your brand. How you treat your customers, your employees, your business partners, your communities – all of these will tally up and be measured against whatever claims you make about your values and purpose.
- Keep listening to customers. Now, more than ever, it is critical to keep your information channels open and your research, insights and analytics teams engaged. Whether it is to understand the emotions of the moment, to test new ad creative, to optimize your media plan for our vastly changed market moment, to track the progress of your efforts, or to integrate complex data streams into a coherent narrative, this is a time when companies most need their research, insights and analytics teams.
Over the past few weeks, the majority of the member queries that have come into the ARF have concerned one or more of the points outlined above. Every crisis is unique, but our job is also to spot the patterns and regularities that apply now as much as in the past.
Truly we are all in this together and I hope that, as the crisis abates, the bonds and values that tie the ARF community together emerge stronger than ever.
Stay safe. Stay in touch. Keep busy. Keep imagining the great future that lies beyond the crisis.