Mark Ritson on Covid-19: “A tactical challenge but a strategic opportunity”

In the past few weeks, a number of brands have paused or reduced their marketing spend in response to the Covid-19 pandemic and an economic recession now looks highly probable.

While we are still in the midst of the initial crisis period, brands are responding tactically with an increase in comms, but the next phase could offer an opportunity for brands to think strategically and plan for the long term, the former marketing professor said during a Marketing Week webinar offering advice to marketers during the outbreak.

“Covid-19 represents a tactical challenge but also a strategic opportunity,” said Ritson, saying the “silver lining” for marketers is the chance to formulate strategic plans. “How will we play the game when the world starts turning again, probably at the start of 2021? These are the strategic questions you should be thinking about now.”

With a Covid-19 recession looking likely, marketers should be focusing on brand equity and advertising spend to grow their businesses, Ritson said.

“Brands are not much defence when the shit hits the fan, but brands and brand equity are useful in the second phase where we begin to see, at the end of the recession, a move towards growth and normality. The acceleration of a strong brand is much greater than less strong brands – that’s why you should invest in them in a recession, because they will return in terms of a growth catalyst as we come out of it.”

Studies of advertising expenditure during recessionary periods, including Meldrum & Fewsmith’s study of the US recession of 1974-75 and the post-recession years, indicate that companies that did not cut their ad spend experienced higher growth afterwards. Ritson said: “The reason why you should maintain your advertising budget during a recession is that recessions are ultimately shortlived. It will leave you in a stronger share position for many years afterwards, once things settle down. You should view a recession as a tough time, but also as the ultimate time to build brands and grow market share.”

At a time when businesses will be looking to rein in spending, Ritson cautioned that marketers must stay in control of their budgets. “I cannot stress the point enough that marketers must be in control of their own purse strings in the next 12 months – decreasing your advertising budget during the recession ahead will not hurt your sales yet but you will pay a price for every year after that recession. Maintaining your budget through this recession and seeing the long term picture will grow your market share significantly as we come out of this recession, and if you’re smart and bold enough to increase budgets during this recession, the post-recession growth you’ll experience will set up your brand for the long term. The data is clear.”

Ritson also dismissed the idea that the pandemic will usher in a completely new way of life and that the marketing and media landscape will change completely. “It’s not going to change – the world will quickly, not immediately, go back to normal. If you were living in England in 1996 you’d have sworn we’d never eat beef again [due to the BSE outbreak] – very quickly we forgot, and we returned to our previous behaviours.”

He added: “People have been building their cognitive systems for millennia; they’re not going to change because they can't go outside for three months.”

While the crisis phase of Covid-19 is still ongoing, marketers face the challenge of how to respond tactically during the next six months, but Ritson urged them to use the time to think ahead. “You’re going to get a strategic time-out – a time to think, to ponder what your longer term strategy should be. Make the most of this time.”