A crisis like no other

This virus is unique in many ways; foremost because of the way it triggered a truly universal crisis rarely seen before. Let’s have a look at some aspects of this unique, global crisis and how brands can tackle it. Amidst the doom and gloom, though, there has been amazing resilience. People, companies and brands have surpassed themselves in their creativity and adaptability. Within weeks, the global community managed to accelerate digitisation at an unprecedented pace.

Shops and restaurants became delivery services. We turned our homes into offices. Face masks were produced en masse with domestic sewing machines. Hand sanitiser was distributed by brewers and beauty companies. People rallied around vulnerable members of their communities to make sure they had necessities like food and socially-distanced company. Social channels were awash with funny, heart-warming content made by ordinary people with nothing more than a smartphone and a bright idea.

Even before lockdown restrictions began to ease, the enormous impact on the economy had started to become apparent. We were lacking comparisons from recent history. At the time of writing, the IMF’s most recent World Economic Outlook forecast projections that the global economy will shrink by almost 5% in 2020 because of the pandemic.

In the US, employment figures stand at about 11.5 million below the pre-pandemic level, according to Reuters. This signals an end to a decade of expansion in the world’s largest economy.

You don’t need to be an economist to predict the rest: unemployment is up; consumer confidence is down. According to a study conducted by the university of Michigan, the index of consumer sentiment dropped by almost 30%, indicating a possible negative demand shock.

Demand crises are quite familiar to us. We witnessed them in the early years of the decade with both the dotcom bust and the subprime mortgage crisis. The unusual nature of the current Covid crisis is the addition of a negative supply shock into the mix – like a natural disaster, the virus stopped production and distribution of many goods and services. Interestingly enough, in a unique situation like this, capital didn’t drain for companies, but rather the stock markets are supplied with liquidity and companies are able to invest with the hope of demand recovering quickly. First signs from China look positive; almost managing a v-shaped recovery, with industrial output in the world’s second biggest economy returning to levels seen before the pandemic hit. The uniqueness of the current situation can best be described by a concept used by the US Army War College in the late 80s called VUCA, that originally was described to grasp the changes warfare was – and still is – going through. In a nutshell: All certainties are off. We have to accept volatility, uncertainty, complexity and ambiguity as the new normal.

The reset button hasn’t just been pressed on the economy. The way consumers behave is being transformed, too, and, in this new world, the issue of brand trust is going to be paramount. In a ‘normal’ recession, people will go back to what they know they can rely on – how much will this apply now, when so much that is familiar has disappeared?

This is something we’ve seen, starkly, in our own industry – television.

The early days of the crisis saw TV viewing time rise in almost every country. In Italy, for instance, at the beginning of lockdown, in March, people watched 115 more minutes of TV than during the same time last year[1]. In all our key markets, TV viewing time increased significantly. Even young audiences were tuning in. In France, for instance, viewing time in adults aged 15 to 34 grew by 36% during the lockdown compared to March 2019[2].

Yes, this was in part due to the restrictions on movement which meant people were spending a lot more time in their homes than usual. But it wasn’t just that – television news, for instance, became a way to hear information about the crisis directly from authorities rather than reading someone’s interpretation of the facts on social media. The need for escapism and the craving for communal experiences led to families watching more TV together.

Actually, they weren’t just there for the programming – many viewers report that they found that watching ads was a comforting reminder of normal life, too. There are sectors which have rarely had better years than 2020: software companies (+675% adspend vs last year in France), online learning platforms (+606%), convenience foods (+213%), to name but a few[3].

In many ways, Covid has amplified and accelerated what was already happening: quicker decision-making; an increased volume of online transactions; and growing understanding, acceptance and necessity for remote processes. It’s a tougher environment, no doubt, but the main challenges for brands remain the same. Getting in front of customers in a relevant way, while having an honest conversation that feels indigenous to the experience.
The state of TV advertising was fast evolving before the pandemic, and the lessons we learn from this experience will shape the future of the industry. The silver lining for the TV industry is that it has been presented with a rare opportunity to meet the challenge of improving its relationship with viewers. It seems to be succeeding.

The best advice for brands in this new normal, VUCA-World is to constantly re-adjust, re-evaluate and re-visit its own beliefs, looking for the few anchors that are out there. Or in short: to install resilience as the core operating system. Because, if there is one certainty that will survive us all, then it’s that somebody will take business that is available if you don’t.

Daniel Bischoff, Chief Marketing & Operations Officer at RTL AdConnect

[1] Source: Local Institutes 2020, evolution versus previous year based on average daily viewing time per individual in minutes, Total TV, All day, Ind.3+/4+.

[2] Source: Médiamétrie, Glance, time-shifted viewing: live + VOSDAL + 7 days; all day 03:00-27:00, March 2019 vs March 2020.

[3] Source: Kantar Media, in Gross Euro, France ; 2020 vs 2019 (comparing same periods). Sources: https://uk.reuters.com/article/global-markets/global-markets-shares-climb-as-china-industrial-data-offers-hope-for-coronavirus-recovery-idUKL4N2FC1DL; https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/WEOUpdateJune2020; https://www. reuters.com/article/us-usa-economy/us-job-growth-seen-slowing-in-august-unemployment-rate-falling-below-10-idUSKBN25V0FO