Wednesday, December 8, 2021
Commentary From Crisis Management Expert Edward Segal, Author Of Crisis Ahead: 101 Ways to Prepare for and Bounce Back from Disasters, Scandals, and Other Emergencies (Nicholas Brealey)
Deciding when, whether or how companies and organizations should advertise during a crisis may not always be a clearcut or easy decision to make. A lot can be riding on the outcome, including the image, reputation and credibility of the organization—not to mentioned its financial success.
Behind The Hershey Company's Decision
Melissa A. Poole is vice president of investor relations for The Hershey Company. In a recent call with analysts , she said their decision to reduce advertising during the supply chain crisis, "...was driven by the fact that we have such elevated demand and given that the supply chain challenges just wouldn't enable us to be able to meet further demand that we would create through our very impactful advertising.
"It just didn't make sense. It put more pressure on the supply chain and also we probably wouldn't get a good ROI because we wouldn't be able to fulfill that incremental demand," she said.
Poole observed that, "... we're seeing a lot of people manage advertising to supply as a challenge and will continue to focus on optimizing it. [We] will invest as much as we can, as much as we think we can sell. Certainly, we're investing in capacity going forward and we are very agile in how we're handling support behind our brands."
Unexpected Conundrum
Baruch Labunski of Rank Secure said, "An unexpected conundrum presented by the supply chain crisis is what to do about advertising when you have empty shelves. Why should you advertise at all when you may not even have products or staff to fill orders? As a marketing expert, I have strong feelings about this topic.
"Everyone has supply chain problems and nearly everyone has labor shortages. The question shouldn't be if you should communicate with your customers. It should be how you're going to communicate with customers. In a season that may see unprecedented shortages, your outreach might need to shift to dealing with supply issues. Notifying customers when inventory arrives, is running low, or gone can be an effective way to keep your business front of mind while also sharing useful information," he advised.
Labunski recommended that, "... if you're working hard to resolve supply chain issues, let your customers know. I love the example Target set, by announcing the company had chartered its own container ship to try to keep items on shelves for customers. Not only did Target solve a problem, the company let its customers know. Advertising and communication with customers is even more vital when we're in the middle of a supply chain catastrophe."
Protecting Brand Value
Bridget Arik, chief operating officers at Redmill Solutions said, "During a crisis there will be a temptation for advertisers and marketers to cut costs to protect their revenue in the short-term.
"However, it is actually essential that they continue advertising to protect brand value in the short-term and accelerate growth in the long-term. Last year, supply chain disruptions became a reality for many companies during the pandemic and those that continued with their advertising investment were able to keep communicating their brand's value with the consumers, and as a bonus, they were not dragged into tough conversations to get out of media commitments that had been made previously," she said.
"Research shows that consumers don't want advertisers to stop advertising altogether during times of crisis. Although the messaging in the advertising might need to change, the potential for brand value still remains high; we've seen that brands that adopt this strategy are able to enjoy higher sales and market share," according to Arik.
Advice For Business Leaders
Kristen Gall, president of Rakuten Rewards advised that, "retailers can certainly get creative and smart with how they're spending so that they are driving the most value.
"For example, retailers can shift their spend to focus on offloading existing inventory so that they can push out products that they already have in-hand while they work out the supply chain issues on the back-end," she said.
"Strategies like cash back and affiliate can help attract consumers to those products so that retailers' marketing investments are not only driving conversions — they are doing so in a way that minimizes the financial and logistical impacts of the ongoing supply chain issues during the holidays," according to Gall.
Consider Marketing Strategy
Jen-Ai Notman founder of the Eshe marketing agency, said, "Whether or not to advertise depends on the marketing strategy that the company has in place. However, I would recommend that the company lower investment in their top of funnel awareness marketing budget."
Prospective Customers
"The company should consider what a prospective customer would uncover if they go and research the brand on that given day," Notman said.
"When a business is investing their dollars in awareness, they are likely reaching a new audience and that audience will go to Google and social media to learn more about the brand and their reputation. This is the stage where a company in the middle of a crisis would run the risk of negative press surfacing and losing their chance at building trust with new customers. It would be best to defer those dollars to a later date, when the dust settles," she recommended
"Additionally, if companies cannot afford to reduce all their top of funnel marketing, they should at least consider what platforms they are spending those marketing dollars on."
The Importance Of Flexibility
Emily King, commercial director at advertising firm Tug Agency, noted that, "The supply chain crisis is the latest challenge facing retailers, with some toy shop owners already sold out of some lines of Christmas stock.
"With consumers told to get their Christmas shopping done early to avoid disappointment, panic buying has started in earnest, and it's likely the budget people were holding for Black Friday will now be spent ahead of the event, as they search for stock before it sells out. Our research already shows that almost half (47%) of Brits aren't planning to spend during the Black Friday weekend, so this could be another nail in its coffin," said.
"What this demonstrates for retailers is a need to be flexible and pivot digital marketing strategies accordingly. For example, launching their campaigns earlier to reach panic buyers and stand out from competitors, and ensuring they only advertise products that are actually in-stock," King advised.
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Edward Segal is a crisis management expert, consultant and author of the award-winning Crisis Ahead: 101 Ways to Prepare For and Bounce Back from Disasters, Scandals and Other Emergencies (Nicholas Brealey). He is a Leadership Strategy Senior Contributor for Forbes.com where he covers crisis-related news, topics and issues. Read his recent articles at https://www.forbes.com/sites/edwardsegal/?sh=3c1da3e568c5.