“Advertising effectiveness has not declined since COVID-19 emerged. People are not suddenly rejecting ads that ran before the pandemic hit”

Two of the world’s leading authorities on advertising effectiveness, Rob Brittain and Peter Field have published a report ‘Winning or Losing in a Recession’, the first study to examine the implications of COVID-19 and the impending recession for the advertising industry in AU & NZ specifically.

In comparison to the UK, who increased ad spend during previous recessions, AUNZ both opt to reduce spend when GDP decreases, and there are clear signs of panic with Australia’s ad spend down -35% YoY for April. Sounds logical right? If you’re making less money, spend less money.

Wrong. In reality, “post recession winners are those who master the balance between cutting costs to survive today and investing ad spend in the right areas to grow tomorrow”.

This is the key pivotal moment where brand building comes into effect. Those who invest in brand building reap long term benefits on longer term market share, and brand favourability. Those who run sales activation advertising may see favourable ROI this week, but long term see no positive effects at all.

Brand building during a recession can mean a dent in profitability for those already in a precarious position. However, coming out of a recession, those brands see much faster growth during the recovery phase. There is every possibility that this pending recession will be ‘V-shaped’ as have previous pandemic / epidemic recessions, therefore we can expect a quick, sharp bounce back.

The question, what is your plan for this critical period?

According to Brittain & Field, the message is clear to marketers: do not go dark. Rather, view recession as an opportunity for growth & find that balance between brand building and sales activation activity.