How To Un-Pause Ad Spend

If only reopening the US economy was like flipping a switch.

“But it’s just not,” said Craig Atkinson, chief client officer at performance agency Tinuiti.

Reopening will be a gradual process that rolls out differently depending on vertical, region and consumer sentiment.

Monday in New York City, for example, marked Phase One of reopening, but only for manufacturing, construction and wholesale retail. Phase Two, which will include outside dining, likely won’t begin until July. Other parts of New York State already began reopening last month.

But in Michigan, restaurants were able to open as of Monday, although people will have to wait until June 15 to get a haircut. In Nevada, casinos are starting to open, while bars, movie theaters and tattoo parlors remain closed. A Texas movie chain reopened in May with new procedures in place and at 25% capacity. In Wisconsin, bars and restaurants have largely been open since mid-May when the state’s supreme court struck down the governor’s stay-at-home order as unlawful.

“I hate the word ‘unprecedented,’” Atkinson said. “But the complexity involved here is massive.”

Feeling better?

Restarting paused ad spend also depends on consumer appetite for the services being advertised.

Air travel in the United States, for instance, is still down by around 90% from a year ago. For airline marketers, radically decreasing ad spend starting in March was the only rational move, said Dinesh Gopinath, head of product and data strategy for Kantar’s analytics practice.

Recently, travel restrictions have begun to loosen a bit. But that doesn’t mean consumers are comfortable getting back out there. Some will, some won’t, and behavior won’t necessarily align with preexisting notions about demographics.

“Advertisers need to cross correlate what is physically possible to do with what consumers say they’re ready to do,” Atkinson said. “All of a sudden, sentiment analysis for customer groups and cohorts becomes incredibly important.”

Even if everyone was champing at the bit to hop on a plane, though, different rules apply depending on where consumers reside and where they may want to travel.

For example, an executive order in Florida barring Louisiana residents from entering the state was lifted last week, although it still applies to people from the tristate area. In Texas, the governor lifted similar restrictions for travelers from New York, Connecticut, New Jersey and other coronavirus hotspots at the end of May.

Hyper-local sentiment analysis requires “a lot of piecemeal work,” Atkinson said, but it’s worth it, especially for brands that have been turned off for the last few months.

“From there it’s about picking a journey around those customers so you can tailor the messaging, which might be very different depending on the cohort.”

Mindful of messaging

Advertisers do have an opportunity to introduce messaging that differentiates them from the more cookie-cutter COVID content out there, Kantar’s Gopinath said. “Why not zig when everyone else zags?” he said.

But brands also need to be cautious of what their audience has been through before turning the ad spigot back on, said Kathleen Petersen, VP of media at performance marketing agency Collective Measures.

There’s nothing wrong with a performance-minded message or explaining why someone should buy a certain product, but it’s still a little premature for the hard sell, Petersen said.

“You’ll need to adjust for the new normal, which may well include softer, less aggressive messaging when it comes to driving conversions,” she said. “[And] be cautious not to alienate those who are struggling – this shift in the economy will be felt for many months and possibly years to come.”

By the same token, geographic targeting is just as important as tone. There’s no point in advertising sit-in dining in NYC until the second phase of reopening kicks off.

Testing the water

Variations in how America is reopening means that brands need to rigorously test their way back into normalized ad spending.

Although the cadence at which brands should start spending again is unique to each advertiser, the best advice is to “start slowly and measure often,” Petersen said.

A good rule of thumb is to spend roughly 20% of what you were planning to spend before the virus hit, she said. Then, measure weekly for direct response and monthly for awareness. If the results indicate that business is picking up, maintain or increase spend.

Heading back into market with a plan that clearly lays out the channels, messaging and how much to spend on what “is the only way to do it,” said Nick Drabicky, VP of client strategy at PMG. Marketers without a well-oiled plan won’t be able to gather the learnings they need to ramp up with confidence.

Run small, medium and large tests to see what happens and “take advantage of trends as they’re popping up,” he said. “The worst and last thing you can do is start coming back – and then shoot yourself in the foot.”

But in your excitement, don’t forget to pay very close attention to demand. Open for business doesn’t automatically mean people are lining up at the door, even six feet apart.

Retailers and movie theaters probably can’t wait to start advertising, said Barry Lowenthal, CEO of The Media Kitchen. But it’s still an open question whether consumers are ready to resume and at what rate. A quarter of all Americans, for example, say they don’t plan to dine in at restaurants until 2021 or later, according to customer intelligence firm Resonate.

“Only time will tell what old behaviors people feel comfortable with,” Lowenthal said.

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1 Comment

  1. Advertising works best when there’s a connection between need-based and aspirational (often happiness-related) benefits. There’s never been a better time for this approach.

    But, specific to spend, while need to drive demand is undeniable, the tenet that advertising is a leading indicator of a downturn and a lagging indicator of a recovery is again proving true.