Inflation, the Ukraine war, the Corona crisis and the climate crisis – this list of trouble spots seems endless. Many consumers are already consuming significantly less and will probably have to save even more in 2023. What consequences will these influences have for advertising and brand communication? How have past crises shaped society? And what insights do we have that we can adapt for brand management?
As part of our JOM-IMPULSE series, speakers Carsten Baumgarth (Professor of Brand Management at HWR Berlin & Creator of the Instagram science channel “Brückenbau Marke”) and Peter Brawand (CEO & Co-Owner häppy), together with our Managing Director Volker Neumann, delivered exciting talks on how brands can successfully navigate these times.
JOM IMPULSES IN A NUTSHELL
Learning from science
The digital IMPULSE event was kicked off by Carsten Baumgarth, who showed how insights from science can contribute to successfully managing brands even in times of crisis. Even if there are no processed research results for current crises yet, as the research process always takes about three years, advertisers can learn from past crises: For example, it can be observed that often the gross advertising investment declines first. A Roberts study from 2003 shows, however, that the opposite should actually be the case. After all, companies and brands can sustainably hold on to market shares they gain during the crisis, even after the crisis is over.
Baumgarth warns that not every strategy companies choose during a crisis is advisable: a common method to hide cost increases is shrinkflation. This involves reducing package content instead of obviously raising prices. However, this can be harmful for brands in the long run, as loyal customers will quickly notice the change. Institutions such as the Hamburg Consumer Centre also often point out such “cheat packs”. According to studies conducted by Professor Baumgarth, however, consumers are willing to accept higher prices if the reasons are well explained.
Basically, the cause of the crisis is less decisive than its effects. Therefore, he recommends a common brand crisis theory in which the different building blocks are put together instead of being discussed individually. This theory should examine how long crises last and how they can be mitigated, as well as how long they remain in the minds of consumers. To obtain meaningful results, the research should be conducted on actual events.
As a second learning from science for brands, Carsten Baumgarth brought the concept of grounding. Brands try to give people a sense of home. Especially in times of crisis, this concept becomes more important. Studies show that consumers’ willingness to pay increases as soon as they feel a sense of closeness to brands. This feeling can be conveyed, for example, by the shop design or the label “Handmade”.
Media planning in dynamic times
The uncertainties in society due to the multi-crises also have an impact on the advertising market. Surveys show that Germans are saving more and more. Price is becoming more and more important and brand-name products are being abandoned more often. The consequence: the market shares of brand manufacturers are declining. How can advertisers use their budgets efficiently in 2023? Volker Neumann, Managing Director at the JOM Group, provided five recommendations for action in his impulse:
First, a recommendation that is obvious: In media planning, the focus should be on target groups with purchasing power. In the area of moving images, target groups with purchasing power tend to use digital formats. Therefore, it should be checked which channels are available. Classic TV reaches a larger range, but via Addressable TV (ATV) and Connected TV (CTV) the target group can be narrowed down or approached in terms of purchasing power.
A second aspect is the interdependence of brand and price communication. Both dimensions are interdependent and should therefore be taken into account in communication. For example, how does the cost per visit in the store or on the website change if the status of the brand (e.g. brand awareness) changes over time?
Both components should also be linked in the control of communication. In practice, this means thinking in terms of contact routes: an image-oriented spot is played out via digital moving images, through which the first contacts are made, in order to then play out the product spot via another device.
Brand and product communication should also be linked in terms of design. Certain advertising formats such as the “JOM Branded Player” are particularly suitable for this. With this, image communication can take place via digital moving images and further information, e.g. about the product, can be integrated via dynamically integrated inserts.
Last but not least: Use the potential in the regions. Using digital moving image formats or digital outdoor advertising, a campaign can be played out specifically in certain regions. Either in regions where there is particularly high sales potential or specifically in areas where sales have recently declined.
Regional targeting can also be combined with the contact routes mentioned under point 3. This means that if an initial contact has been made nationally in the moving image, this can be addressed regionally as a targeted second contact via DOOH.
Good creation in times of crisis
In the last JOM Impulse, Peter Brawand answered the question of how advertisers can both communicate sensitively and demonstrate attitude during times of crisis. Here it is important to understand that the impact of crises on each individual is different.
Brands must therefore not only ask themselves how their target group is doing, but also in which market they are operating. It is about how brands can emotionally support their target groups in difficult times. Peter Brawand emphasises that brands must be visible in these times, because in times of crisis people need strong brands with a clear attitude that give them orientation. He gave three suggestions on how this visibility can succeed:
The first possibility is to convey stability. In times of crisis, many things happen over which consumers have no direct influence. The result is a feeling of powerlessness. This is where brands can come in and promise positive, recurring emotional states. For example, through ritualised mood enhancers like the cup of coffee in the morning to convey a sense of normality.
The second option is to create bonds. Brands can build trust and reliability by appealing to the power of community and conveying the feeling that “you’re not alone.”
And the last aspect is “movement”: brands can show that they do not lose sight of the big picture despite difficult phases, that they continue to work for a better world and thus also take consumers along with them and create a certain optimism for the future in them.
The current multiple crises pose challenges not only to people but also to brands. Even if there is currently no elaborate research for the current crises, marketers can learn from the findings of science if they look at the learnings from past crises. For the media sector, it is advisable to focus on target groups with high purchasing power in phases when consumers are saving more and to target campaigns in regions where there is great sales potential. At the same time, brand and product should be linked in communication as well as in the management and design of campaigns. Furthermore, it is true for the creation of campaigns that people seek orientation in brands, especially in difficult times, and therefore the communication of values should be in the foreground.
The IMPULS event “Successful marketing communication in times of multi-crises” took place on 19 January 2023.