question of the week

How are we advertising to people when wallets are empty?

UK inflation hits a 40-year high as food and energy price surge continues. How should the business of advertising help consumers navigate these times?

By Creative Salon

The beginning of the year teased us all into a sunnier outlook following years of pandemic-related challenges, but health stressors were very quickly swapped for fears of a recession. With UK inflation hitting a 40-year high, rising prices and a looming recession, how should the business of advertising help consumers navigate these times? What shape will the winning brands take at such difficult times?

How can brands focus on finding a message that promotes value without sacrificing sales? And when shoppers are bracing themselves for a winter of feeling the pinch more than ever, should brands only be over-indexing on deals and promotions? So many questions.

We spoke to some of the smartest minds in our industry to get some answers.

David Golding, founder & chief strategy officer, New Commercial Arts

I like this question, because for much of my advertising career it wouldn’t have been asked. Regardless of whether we are living through boom or bust times the fundamental task of advertising doesn’t really change – its role is to communicate to lots of people the benefits of using a brand in ways that make it worth the price to be paid for it. We create preference that builds share of wallet. When those wallets are emptier, we need to do our jobs even better, and really communicate why a brand is worth every penny.

In recent years, the focus of our industry has been elsewhere. We have been living in a society at the top of Maslow’s hierarchy, all driven by self-actualisation and focused on the purpose of the brands we buy and the lives we lead. But today many families are tumbling back down his pyramid, to where warmth and sustenance are more imperative. The statistics are already terrifying: two million households missed a bill payment last month; nearly 20 per cent of people have had to take on a second job; 10 per cent have been forced to skip a meal every day to ensure their families don’t go hungry; and 2.6 million children missed lunch in school in April alone, because their parents simply could no longer afford it for them. And winter is coming.

For most brands the next year or so is going to be make or break. Many will need advertising to ensure stretched customers see the true value of their products, whilst others will need to show how they are helping vulnerable audiences, in order to manage their corporate reputations as good citizens. And for many agencies this is going to be make or break too, as the need to make the case for advertising at all will become acute, with client CFOs looking to cut what they may see as discretionary spend.

Frankly though I’m pleased to be getting back to making a real difference for our clients and their customers, not just making them feel better about a brand’s ‘why’, but making them feel motivated to spend precious money because of a brand’s ‘what’. It’s time for advertising to get back to the thing it was invented to do – create demand in a world of scarce resources. To me it’s the true commercial art.

Anna Vogt, UK chief strategy officer, VMLY&R

Falling from one global crisis into the next isn’t exactly what any of us had in mind when we emerged from the last lockdown. However, we can take a tiny consolation in that we’ve now built up our muscles to respond purposefully and pragmatically when it comes to ‘business not as usual’.

Previous recessions and research by the IPA have provided ample evidence that brands should stick with it and not disappear when the going gets tough - both for their financial sakes and the sanity of their customers. This proved really useful in March and April 2020, when we needed to encourage brands to respond, and not become bystanders, in the Covid crisis. And now that another recession is looming, it’s interesting to reflect on what we’ve learnt over the last few years and how this might help brands navigate their way through this multifaceted downpour.

Lesson 1: Brands can be more powerful than governments.

Not that this is particularly difficult in the current climate, but nonetheless, it’s worth remembering when we think about the agility and speed at which brands are set up to react. There’s a lot of red tape and many knowledge gaps where we can help brands cut through and backfill.

Lesson 2: This is what brand platforms are made for (and of).

And if you haven’t got one in place, get one! Rising to the occasion and connecting a brand’s superpower to a customer need, response gap, or service shortcoming is the thing that will create love and loyalty for many years to come. Platforms will give you the right angle to respond with which is both true to you and helpful to your customers.

Lesson 3: Be true to yourself.

The temptation is to think any act is a good act. This isn’t necessarily so. Being tokenistic can be just as offensive as playing truant from a crisis. If you’re a funny brand, keep people smiling. If you’re about bringing people together, keep socialising. If you use technology to solve problems, keep doing that. Crises demand a sharper understanding of customers’ needs in a particular situation, and an empathetic and authentic approach to answering them is always the best way forward.

Geoff de Burca, chief strategy officer, MediaCom UK

After some criticism that ‘Every Covid-19 Commercial was Exactly the Same’, I’m sure most marketers and agencies are working hard to ensure their messaging during the current crisis is distinctive, genuinely empathetic, and helpful. But alongside finding ways to help customers navigate the crisis through new offers, value initiatives and creative messages, it’s equally important for brands to think about how they use their media strategy to ensure those messages cut through. 

  1. Plan for attention.  In a wall of competing value messages, it’s easy to become wallpaper. In a world where many people pay partial or no attention to advertising, your new offers can be easily missed. So if you’re trying to be helpful, you need people to pay attention to it. So think about ways to attract attention (like sonic cues, or surprising imagery) and choose media formats that people are paying active attention to.

  2. Be targeted. The effects of the cost-of-living squeeze will be very unevenly distributed. The bottom 20% of households have had stagnant incomes since the last recession, so will be hit especially hard; the wealthiest still have a financial cushion of Covid savings. Smart brands will tailor their messages to different cohorts using third-party data.

  3. Be in the right context. Going into Q4, the busiest time of the year for advertising and a time when budgets are stretched the thinnest, brands can gain an advantage through the most old-school of media planning behaviours – planning for context. Shoppers will be looking to save money by planning major purchases around payday; searching for offers online; visiting value retailers and through use of coupons. Each of these behaviours creates a media context that can be targeted, via location, day of week, or media property. 

Winning brands will be the ones that develop genuinely helpful propositions, communicate them clearly at scale and use smart media tactics to make them stand out to the right people and at the right time.

Sam Drake, managing partner, Goodstuff Communications

Past recessions have shown that the most successful brands to emerge from them are those who advertise.

Brands considering signing up to the government’s taxpayer-funded campaign encouraging them to divert marketing spend into cutting prices might want to take a moment before making that move.

The winning brands will already have confidence as to the role they play in the lives of the consumer and tailor messaging accordingly.

For a retailer it might be short-term and price focused, whilst for an FMCG advertiser it might be emotive as audiences seek those little everyday pleasures.

There is no one size-fits all answer but the brands who believe and understand the value that advertising can bring them and their consumers, are the ones who will come out winning.

Jo Arden, chief strategy officer, Ogilvy UK

On his TikTok channel this weekend, the brilliant Robert Mayhew did a pastiche of Martin Lewis (the money saving expert). 2018 tips ‘how you can get an extra 100 Nectar points in your next grocery shop’; 2022 tips ‘how you can avoid freezing to death this winter’. It pretty much sums up the severity of what we are facing.

My advice to everyone involved with brands is to read the room. People are going to be angry and frightened, but they’re not idiots. They don’t need advice about wearing more woollies, they want brands to offer genuine support. To price clearly and consistently – searches for ‘budget’ have been rising steadily over the last two months, people want to know and trust what they’re budgeting for won’t keep shifting. They want brands to empathise not patronise, let’s avoid starting every message with ‘times are tough’.

Our job more than ever is to make a good case for people to buy the brands we market, to ensure that we deserve our share of a shrinking pot. We can do that by adding value, building in service and utility to the core offer; by helping people (both our customers and the communities they care about) and maybe by bringing a bit of levity. We learnt a lot in Covid, including that if all we did was hold up a mirror to what life is like, people simply just stop looking.


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