The dangers of going dark: How your marketing strategy now will affect your market share post-COVID

By John Murphy, CEO, Prime Creative Media

The current pandemic has put society in a mindset that can best be compared with a war time mentality. Many are scared for their safety, unsure of what the post-COVID world will look like. The same can be said for corporate sentiment.

Almost all companies have been affected by the crisis, whether it be from a direct fall in sales, or just uncertainty in the market. In working with hundreds of B2B businesses, we’ve observed the different approaches companies are taking with their marketing strategies in a time of crisis.

For some, it has been a time to retreat – to cut all expenditure and hope to ride out the crisis. History has proven that this mindset is fraught with danger. Marketing is a critical investment, not a short-term cost, and the consequences of the retreat position far outweigh the immediate savings. Studies into comparable situations – such as wars, recessions, and the most recent GFC – support that only one strategy can increase market share post crisis: defend and advance. Companies that fight for their position by maintaining or increasing their marketing presence now are setting themselves up to succeed on the other side.

We offer this look at how these strategies have fared over time:   

Retreat – Going Dark 

The retreat position is a natural first instinct in a war time situation. Just as no person would want to put themselves in danger, the first instinct for any company is to cut all possible costs, bunker down, and wait for the crisis to past. It’s a natural feeling to want to decrease your marketing spend, keep all cash possible. This is known in the marketing world as “going dark”.

Several studies have shown the dire consequences on a brand for choosing to go dark1. At a time when the market is looking for guidance, brands that go dark are like fair weather friends, pulling their support for the industry when they need it the most. It doesn’t give a sales team any confidence to make sales during the crisis. And when times get better, it will take years to regain brand trust, on average taking three to five years before sales return to pre-crisis level.

Going dark also feeds into “animal spirits”, the economic termed by John Maynard Keynes on economic decisions made during times of economic stress or uncertainty. Pulling marketing spend sends a message to the economy that times are tough, actually reinforcing an economic downturn.

Defend and Advance

History favours the brave, and the same is true for companies who make bold moves during times of crisis. A 1980s study by McGraw-Hill of 600 B2B companies, found that those who increased or maintained advertising spend during the 1981 – 1982 recession saw higher sales growth throughout that downturn and afterwards. By 1985, companies that kept up their advertising increased their sales by 256 per cent over companies that cut advertising2.

An IPA report that looked at the 2008 downturn3 confirmed that brands need to maintain share of voice at or above share of market during a crisis. It’s like dressing for work – advertise for the position you want, not the position you have. News outlets are reporting that big banks are using their COVID-19 government support packages to advertise aggressively to increase their market share4, and the smartest B2B companies are following suit. We’ve seen market leaders increase their marketing spend in April 2020 to defend their position, and challenger brands pay for more coverage to take advantage of other brands going dark.

Cash is critical during these times, and no doubt companies need to save on costs. However, this is best done by improving operational efficiencies, making sustainable cuts that can help with long-term profitability.

With industries looking for guidance, companies that are marketing strongly are finding they have a highly engaged audience eager for information and guidance. Now is the perfect time to set your brand up as a trusted resource, through quality content, targeted marketing and advertising.

At Prime Creative Media, we offered complimentary home subscriptions the week the first social distancing measures were announced and have so far had more than 9000 people take up the offer5, evidence of a thirst for information. We’ve also seen increased engagement with our web sites. Compared to this time last year, we’ve seen page views increase by up to 45% across our 27 brands6.

In marketing during a time of crisis, you need to take into account consumer sentiment, and match your messages accordingly. With so many companies looking to reduce operational expenditures, content should be about how your brand can help. Doyle Dane Bernbach (DDB) surveyed more than 1000 Australians to learn what people want to hear from brands during the COVID-19 pandemic7. The results suggest people want to see how brands can help them stay connect and empowered, and they want relevant and valuable content that will help them through.

This works well in a B2B marketing strategy, where companies can show their support for the industry. Tell your clients how you can help them through the crisis, and look ahead at the recovery. Work on quality content, developed in partnership with a reputable B2B publisher, coupled with strong branding, as an ideal approach to showing support.

For companies that have gone dark, it’s not too late to come back, but the sooner the better. With Australia faring better than Europe and the Unites States in fighting the pandemic, and our government easing restrictions, companies who are active now are setting themselves up to increase their market share ahead of their competitors who have backed out of the market. The reality is that the market may shrink for years to come, so owning a larger piece of the pie will be key to recovery and growth.

 

1. https://cdn.thearf.org/ARF_Knowledgebase/KnowledgeAtHand/18.03.01.KAH_Going%20Dark.pdf
2. https://www.libertymarketing.co.uk/blog/what-does-the-data-tell-marketers-to-do-during-the-coronavirus-crisis/
3. http://www.samueljscott.com/wp-content/uploads/2019/01/Advertising-in-a-downturn.pdf
4. https://www.afr.com/companies/financial-services/zip-warns-banks-are-using-crisis-to-expand-market-share-20200407-p54hs0
5. Offer sent out end of March 2020
6. Google Analytics 1 April – 30 April 2019 compared to 1 April – 20 April 2020 for Rail Express Magazine.
7. https://www.linkedin.com/company/ddbgroupaustralia/?trk=public-post_share-update_actor-text