Should we stop advertising during the pandemic?

ith the massive reduction in economic activity caused by the coronavirus pandemic, companies are taking a cold, calculating look at their spending. Advertising, which tends to be seen as an expense with little direct short-term impact, becomes a natural candidate for elimination.

How, then, should managers deal with this decision?

The first question is: should we stop the advertising campaigns? The answer is simple: no, absolutely not! Communication with customers is essential for any company in any economic scenario. If communication is interrupted due to the fear of not being able to survive a difficult phase, the interruption itself will make survival impossible.

In that case, the second question is: should we keep advertising campaigns as if we were in a normal situation? The answer is also simple: no, absolutely not! Right now, the world is a completely different place than it was a month ago. The approach to marketing communication has to be rethought in order to remain relevant to customers in this "new normal" in which we now live. At the very least, it is necessary to adjust not only the message, but probably also the dissemination channels. A reboot of the approach to marketing communication may even be necessary.

So, the third question is: what changes should be made in the approach to marketing communication? This time the answer is not so simple, because the impact of the pandemic is felt differently depending on the characteristics of each company.

In order to explain these differences, two key questions need to be considered: (1) does the company remain operational during the pandemic? And (2) are resources available for advertising? It is based on the answer to these two questions that we arrive at the four scenarios that follow. Each requires a different approach to marketing communications.

Are there resources available for advertising?

No

Yes

Does the company remain operational during the pandemic?

No

1

2

Yes

3

4

The first scenario is the most difficult. Not only is the company unable to remain operational during a pandemic, it has no resources for advertising. Consider, for example, a travel agency. The business has come to a complete halt and no resources are available. In this case, the priority must be to maintain the customer base, so that after the crisis (because, believe me, this will pass!), it can be quickly reactivated. To do this, you can use word-of-mouth advertising by promoting conversations about travel to keep customers' spirits up and the company's value proposition relevant. For example, one can launch social media topics such as "what will be the first destination you visit after the pandemic passes?" and post relevant content to stimulate debate. This does not require huge resources as customers create most of the content.

The second scenario is slightly better. The company is unable to remain operational during the pandemic, but has resources for advertising. These resources can be capital reserves it has managed to create, digital assets it can make available, and/or staff with the ability to create shareable content. Consider, for example, a concert hall. The business has stopped completely, but it has a catalogue of recorded performances (these may even be part of another division that is still active). In this case, the priority should be to maintain the engagement of the customer base so that the company's value proposition remains relevant, allowing a quick recovery soon after the crisis passes. To do so, one can, for example, provide free limited access to the catalogue of recordings or even organise events, such as a streaming of famous concerts, that allow the audience to participate online. The idea here is to leverage the available resources.

The third scenario is the opposite of the previous one. The company manages to remain operational during the pandemic, but has no resources for advertising. Consider, for example, a retailer with physical shops(brick-and-mortar). Operations are overloaded and there is a huge effort to try to maintain effective and efficient processes. In this case, the priority must be to offer the best possible level of service while ensuring its visibility. To do this, word-of-mouth can be used, encouraging satisfied customers to review the service, which improves rankings onsearch engines, resulting in the acquisition of new customers and loyalty of existing customers. This approach results in a high return on investment, as it generates increased revenue without a large expenditure of resources.

The fourth scenario has the greatest potential. Not only can the company remain operational during the pandemic, but it also has resources for advertising. Consider, for example, e-commerce or digital streaming platforms. Demand has grown significantly, and is accompanied by an effective and efficient response from the operational area. In this case, the priority must be to increase turnover with a focus on acquiring new customers. For this, one can leverage traditional acquisition channels such as display and search. This is a huge opportunity, since even customers who were previously sceptical about the product are now willing to try it. This new behaviour will have a lasting impact on consumption habits, resulting in sustainable business growth.

In short, the pandemic is causing heavy damage to the vast majority of companies. In this uncertain environment two things are certain: (1) we cannot stop communicating with customers, but (2) it is necessary to rethink the approach to marketing communication. How to find the best approach for each company? The matrix presented above can be a good starting point.