Marketers that pulled ad budget as the coronavirus pandemic hit should be planning for a speedy return as lockdowns are eased, according to industry veteran Martin Sorrell.
Multinationals postponed ad campaigns and quickly re-edited commercials that showed people hugging or touching as social restrictions were imposed, and big spender Coca-Cola “paused” marketing as the crisis had a significant hit on its business.
But Sorrell, executive chairman of ad group S4 Capital, has succinct advice for businesses as lockdowns start to be eased.
“My view is, that’s the time to be aggressive,” he told CNBC’s Julianna Tatelbaum, when asked about how brands should get their marketing messages out as restrictions are loosened.
“So, you have a little bit of time to plan. But I think when you come out of the traps … our view is that by the end of May and certainly by the end of June, a lot of these lockdowns will be eased to a significant degree,” he added.
Sorrell cited Nike, which saw an 80% increase in the use of its Nike Training App in China in its latest quarter that then translated to higher online sales. As stores started reopening in the country, foot traffic quickly returned to prior-year levels and its digital business accelerated further. “I do think those are good examples of where you make adjustments during the lockdown period … and you reap the benefits,” he stated. He expects a V-shaped recovery in some sectors and said that brands should take advantage of the relatively cheap price of online media.
Shopping online and TV streaming have both been boosted as people stay at home, and Sorrell expects the e-commerce spike to continue. “(Unilever) saw a massive upsurge in the Chinese consumers’ acceptance of online (shopping) during (the outbreak of) SARS because for the first time they were ordering essentials or groceries or whatever online and they saw how easy it was to do. Once you go on there with an account, you carry on doing it,” he stated.
Some ad agencies advocate upping marketing spend during downturns, with the idea that advertising stimulates sales, but for Sorrell, this approach is sector dependent. “(In) the advertising and marketing services industry (the) traditional response to a recession or crisis is spend, spend, spend. I think that’s wholly inappropriate and irresponsible and impractical actually when clients of ours are going through such a tough crisis.”
This is a time when CEOs are more likely to be listening to their finance chiefs over their marketing chiefs. “There’s an unwillingness, quite rightly, to be seen to take advantage of these situations. And so, they tend to move away from brand-driven communication. They will do purpose-driven communication, often focused for example, around the efforts and success of frontline workers,” Sorrell added, but conceded: “A lot of those campaigns … look the same. If you removed the logos or the names (of) the company, you wouldn’t know which ones they were.”
As for life at S4 Capital post-pandemic, Sorrell stated the company was letting leases go on some of its London and New York offices. “We’re dropping leases partly because our people are telling us they prefer working from home … So (post-lockdown), we’ll be much more flexible on the commute, we’ll be much more flexible on working hours.” He also expects to travel less. “I will attend fewer conferences. I will be more conscious of deploying my time in a much more effective way.”