One of the worst things brands can do right now is go dark, warn experts

Marketers should use this time to reinforce consumer relationships.

One of the worst things brands can do right now is go dark, warn experts

Industries around the world have been forced to pause advertising amid the COVID-19 outbreak, risking huge loss of brand equity. 

But marketers should be using this time to double down on its consumer relationship, experts have stressed.

"The uncertainty among citizens and consumers will put pressure on businesses across the U.S. and around the globe," Jason Kanefsky, chief investment officer at Havas Media told his network in an email offering snapshots at how the virus will impact media spend. "A larger portion of advertising investment will need to be focused on building and maintaining a meaningful relationship with consumers rather than driving near term sales. 

"There is a risk of losing brand equity when advertising goes dark, and an opportunity to use this time to build and reinforce a brand’s relationship with their customers and prospects. It’s critical to understand what your customers are looking for right now -- it might be reassurance about your store cleanliness efforts or your support for affected employees, rather than your core product."

Travel/tourism and QSR hardest hit

Kanefsky identified the major risk categories for media spend as travel and tourism (which could take six months to recuperate), arts, entertainment and recreation (concerts, sports, studio, live events which could take three months to recover) and QSR/casual dining (with an estimated bounce-back period of one month). 

The travel and QSR restaurants are actively cancelling media now. 

Retail will be "deeply challenging"

The CIO went on to explain that retail "will be deeply challenged by the impact of coronavirus." He said that "expendable" and "postponable" purchases are likely to be hardest hit, based on analysis from 2008 financial crisis, and we should expect varying impact and recovery timelines depending on the segment.

Of course, retailers with a strong e-comm footprint will be best equipped to prevail, as the continued public health crisis will keep people out of stores. As of February, about half of consumers said they were already avoiding shopping centers, and 75 percent will avoid as the outbreak worsens. Avoidance behavior is most pronounced among older consumers.

Independent and small/medium-sized businesses will be hit hard. Ad agency We Are Social U.S. is offering up free tutorials and marketing services at reduced rates to help local companies through the turmoil. 

Auto media spend to will be "uphill battle"

Kanefsky highlighted auto, too, which remains impacted and will endure an uphill battle as a "postponable" purchase. He said Chinese auto demand was crushed by pandemic conditions, dropping 79 percent last month vs the prior period. 

"The economic impact of a bear market in the U.S. makes the automotive sector quite vulnerable," he explained, adding that consumers coming off lease may downgrade and oil prices dropping will hurt electric car sales. 

CPG should plow on with investment

Meanwhile, he said CPG should continue to invest during this challenging period as food, produce and OTC pharma demand is obviously surging, especially online. However, he warned that even online growth and distribution may be hampered by labor shortages.

"Message more important than medium" for financial services 

The CIO underscored again the importance of building on consumer relationships when it comes to the financial sector. 

He said: "Financial services are facing dramatic market volatility and recessionary trends, in addition to the public health crisis. The message is more important than the medium. It is important to be in the market with a reassuring brand message and hard selling is not advised."

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