During crises, we tend to shift to risk aversion. Budgets get slashed. Moonshot projects get put on hold. For many businesses, long-term plans shift to short-term thinking. Survival and security, with good reason, can become the focus of strategies.
Sticking to tried and tested methods is often seen as the safest way to weather a storm. But during a crisis such as a financial recession, is cutting your advertising budget the right choice?
In uncertain times, marketing and advertising budgets are often the first cuts made. New projects – especially creative ones – are put on hold or canceled entirely. This isn’t surprising: thinking creatively is risky by definition.
While sticking to what you know feels safer, teams and companies that took chances in times of crises have seen huge benefits.
The Importance of Advertising in a Recession
Advertising is vital for how your brand positions itself during a crisis – and into the long term.
Studies have shown that maintaining and even increasing advertising spend during a recession can have a strong positive impact in the short and long term.
A famous study of over 600 businesses by McGraw-Hill examined advertising spending during and after the 1981-1982 recession. It found that companies that invested in advertising saw 256% higher sales post-recession than those that took a step back.
These results were exemplified a few years later by Pizza Hut. During the 1990-1991 recession, McDonald’s cut its advertising and promotion spend. Seeing this as an opportunity, Pizza Hut increased its own spend, producing multiple TV ads focused on their affordable family meals, and saw a 61% sales increase. McDonald’s, however, saw sales drop by 28%.
Slashing advertising and marketing spend in a recession can have long-lasting effects on your business. Or, your brand may survive the crisis, only to be left in the dust by those businesses that took a proactive approach.
An Opportunity to Get Creative With Advertising
The “engage, inform, and delight” model is more relevant than ever during a time of crisis. People are looking for reassurance and relief along with a dose of pragmatism.
When we’re inundated with negativity, some good wit, and a good offer, when communicated with wit and a touch of tactful optimism, can go a long way.
Brands That Turned to Creative Advertising Investments
There are many brands that have experienced long-term success by realizing the potential of creative advertising during a time of crisis.
Kellogg’s famously doubled its advertising budget during the Great Depression and introduced the beloved characters of Snap, Crackle, and Pop. Cereal company Post, for comparison, did the opposite and cut back on spending. Kellogg’s saw a profit increase of 30% by 1933 – even while the economy was in shambles. And those depression-era characters are still household names.
We can also look to Starbucks. During the 2008 financial crisis, the coffee chain (which had been struggling financially for several years) completely changed its strategy to focus on the customer experience.
With the help of an online initiative that encouraged people to submit their ideas for what they wanted Starbucks to be, the brand’s image was transformed from a sterile, anonymous chain to a warmer, people-focused destination. They created exactly the comforting space people need during hard times.
And, of course, there’s the Covid-19 pandemic, which had a seismic effect on brands and changed the advertising landscape more or less overnight. One great execution was by Uber, which made the bold decision to celebrate its clients for not using its service. The #MoveWhatMatters campaign endeared the brand to audiences by showing humanity and sincerity.
Striking a Balance
Crises are a time of high emotion for your teams, leadership, and customers alike, which can make advertising challenging.
Addressing the crisis directly is a minefield: you could alienate your audience instantly if people believe you’re exploiting the situation or being insensitive.
However, acting as though nothing has happened is equally dangerous as you could appear out of touch or heartless. Sprout Social found that as many as 70% of consumers expect brands to speak up about social and political issues.
Even setting aside the tensions that result from a crisis or unrest, your customers’ priorities will almost certainly have shifted. What worked before might leave them cold now – or worse, frustrated and disillusioned.
Finding a way to navigate these choppy waters and land the right approach for your brand in the current moment requires courage and creativity. The Drum suggests learning from advertisers who’ve done it right, being timely, making sure you’re not tone-deaf, and addressing new customer behaviors.
How Crises Can Fuel Creativity
It’s important to realize that creativity doesn’t only happen under ideal conditions, primarily because there’s no such thing. In fact, there are several ways in which a crisis can motivate people to work at their most creative. By “going dark,” you could miss a golden opportunity to create incredibly powerful output.
While tough times can easily cause decision paralysis, they can also encourage us to adopt a problem-solving mindset and focus more intensively on the challenge at hand. This could lead to heightened creativity, ingenuity, and productivity.
Nurturing that responsive creativity in your team keeps the emphasis on identifying solutions and finding new ways for the organization to thrive.
According to art therapist Gretchen Miller, creative work can be a safe way to talk about emotions that are otherwise difficult to put into words. Many immensely powerful ideas in the realms of art and design have been born out of a need to respond to terrible events in the world or in the artist’s private life.
Keeping an open mind and letting the crisis creatively inform your response increases the likelihood that your team will produce work that meaningfully (and respectfully) addresses the circumstances.
Cope Through Innovation and Creativity
As Winston Churchill famously and cynically said, “Never waste a good crisis.”
Making the right advertising investments in a time of crisis can have very strong long-term impacts. While it’s tempting to fall back on the safe, uncomplicated options when disaster strikes, there is no better time to go all-in or to reach for innovative creativity.
Don’t be afraid to get creative. Adapt and adjust your advertising output to address the changing circumstances respectfully. It will also empower you to engage with your audience in meaningful ways that will stay with them.