Those who do not study history are fated to repeat it. Although the U.S. has experienced many recessions and gained valuable data to help guide our marketing decisions sometimes recency can be the best teacher.
A recession with which we are all familiar was the coronavirus crash of 2020. This occurred between February and March 2020. The U.S. economy then began rebounding in April and by November 2020 had returned to January levels (Forbes).
Here, we’ll look at the time period immediately following the crash (April-May 2020), and the marketing insights about consumer behavior and brand activities that may be relevant for you and your brand to consider for future recessions.
Recommended Reading: Data-Backed Marketing Direction Regarding Recessions
The Impact On Consumer Purchasing Behaviors
Unlike in previous recessions, in 2020 the internet and mobile apps changed the game.
Forced stay-at-home orders, job losses, and pay reductions meant many families adapted how they shopped, monitored their spending habits, and budgeted.
But not everyone was impacted by job loss or pay reductions.
In stark opposition, many consumers shifted in the opposite direction. One study stated that 43% of U.S. consumers had the same spending habits as they did prior to the pandemic. This was attributed to the lack of entertainment options, being unable to spend on social activities, and eating out.
The appeal of always-open ecommerce provided an endless draw of consumers who were still working and spending.
In looking at total digital visits to an aggregate of Amazon, Walmart, and Target’s websites, the aggregate saw 779 million visits the week of March 9, 2020 (Comscore). Other online retailers also saw an increase around 34% as reported by consumers year over year.
[Gray Box] Recommended Reading: 4 Post-Pandemic Consumer Behavior Changes to Consider
Media Consumption in 2020 Rose to an All-Time High
Digital devices, social media, and online shopping provided an infinite number of paths to engage stay-at-home audiences. Unavailable in past recessions, these channels provided a cheaper, quicker, more agile form of messaging for brands. In fact, smart phone, laptop computer, tablet device, streaming TV, and gaming console usage had increased in all categories 11%-76%.
Data trends showed that internet usage had increased 7.1% year over year.
Unique mobile users had increased 2.5%.
Even social media usage got a boost, with an 8.7% increase in active social media users — that’s more than 304 million users.
With little to do while stuck at home, consumers watched 61% more connected TV or OTT (Over-the-Top) than years prior.
Actual video streaming was up 12% since the start of COVID-19 stay-at-home measures.
People were consuming content and engaging via multiple devices. More than 50% of users used a smart device to shop while watching connected TV. Engaged audiences engaged daily in regular consumer habits and spending on products they know and trust.
What we learned was that consumers were not turned off by advertising during this time of change. Generally, consumers agreed that advertising should not have stopped and were expecting companies to continue messaging to them.
Winning Brands Projected Stability
During those challenging times it was important for brands to project the image of corporate stability.
As advertising sales decrease during any recession, the noise level in a brand’s product categories can drop when competitors cut back on their ad spend. When marketers cut back on ad spending, the brand lost its “share of voice” with consumers. That led to the potential loss of current, and possibly future, sales.
With increased consumer social media and digital presence, there were many opportunities for brands to gain a competitive advantage during the coronavirus crash.
- Captured the increased volume through OTT and OLV (Online Video)
- Cost efficiencies and lower CPMs were attractive to lower ad spend budgets
- Premium services like Hulu had the highest volume of Ad-Served Streaming Services
- Targeted the large volume of online activity through Programmatic and Native Content
- Used the marketing funnel to drive more consumers to them
- Display advertising helped provide rich audience data to inform paid search campaigns and increased the view-through rate
- Increased Paid Search budgets that gained more search inventory
- With correct audience targeting they optimized and increased CTR%
- Capitalized on the increased inventory and spent a little more to gain impression share
- Explored Paid Social advertising through Facebook and Instagram
- Exploited a temporary 50% decrease on Paid Social Ads Cost per Click (CPC)
- For a low investment they captured a targeted audience based on their audience’s profile
- Because more advertisers were focusing on organic social posts, leveraged small investment paid promotions (as little as $100 a month) to either increase visibility of their higher performing socials posts or gain new followers
Winning Brands’ Messaging Leaned Into Value
Advertising during the pandemic and coronavirus crash was laced with the need for brands to quickly find messaging that resonated with their consumers’ changed situations and needs.
Many brands almost universally jumped on the messaging “We’re All in This Together” and wound up closely mimicking each other’s creative executions. Somber music, passing pictures of doctors, people hugging, babies – it became a sea of same.
Those marketers that leaned into the value their products or services brought to consumers were the most successful at differentiating themselves from the sea of same and connecting with their customers’ then-current situation.
Wendy’s “Free Nugs not Hugs”
The Message: Simple. Get free nuggets. This one-day promotion drove business to storefronts when social distancing efforts closed dining rooms. As of April 29 2020, Wendy’s stock was up 5.3% (Nasdaq).
Why It Worked:This message nods to the then-current situation of social distancing in a cheeky way. Customers couldn’t hug, so why not get free nugs? It was a simple and easy-to-remember message that helped bring levity to and improve their customers’ situation.
Oscar Mayer’s “Front Yard Cookout”
The Message: Oscar Mayer’s social media campaign called on their fans to join them in the first-ever Front Yard Cookout, where communities could be together, even when apart.
Oscar Mayer asked consumers to snap a photo of their socially distanced cookout and share it via Twitter. Each social share using the hashtag #FrontYardCookout donated one additional meal to Feeding America on top of Oscar Mayer’s 1 million meal commitment (Marketing Dive).
Why It Worked: Even as businesses began to open, the spring/summer cookout stood to be threatened.
Bringing the fun to the front yard was a simple change that provided an attainable relief to quarantine. Even more successful was the feel-good incentive for participation as Oscar Mayer donated an additional meal for each hashtag.
Hush Puppies “Anyone’s Grandparents”
The Message: While supplies lasted, Hush Puppies asked consumers to send a FREE pair of Power Walker shoes to their favorite senior. While they’d much prefer an in-person meeting or hug, a pair of comfortable, free shoes might be the next best thing (ABC News).
Why It Worked: The older adult population was lonely and isolated prior to the pandemic, and according to the National Academies of Sciences, Engineering, and Medicine, there is strong evidence to suggest that many older adults were socially isolated and lonely in ways that put their health at risk.
With a niche product, Hush Puppies played to consumers’ heartstrings and offered a relevant service to those in need.
Conclusive Data to Guide Your Decision-Making
The coronavirus crash was one example of the effects of a recession on consumer behavior, as well as the importance of how the right marketing decisions made during a recession can positively or negatively impact a brand. Do you want to come out on the other side profitable, or with a decreased net income?
Read more about what history has taught us so that you and your brand are prepared for the next recession.