What you need to know:

• Nestle marketing boss Martin Brown says "surprising" that marketing basics still need to be reinforced during the COVID pandemic
• He says brands shouldn't get swept up in the sense of urgency to get out there and talk, insisting overused message of support eventually feel impersonal
• Standard Media Index (SMI) MD Jane Ratcliffe says early spend data for national advertisers disproves market decline of 40%
• SMI predict it will be around the 30% mark, however the data does not include small to medium business spend - which industry insiders claim has taken massive hit
• AANA CEO John Broome says a real market concern should be underemployment rising to 30% having a direct impact on consumer confidence
• GroupM CIO Nic Lewis says we find ourselves in a two-speed sentiment economy, balancing confusion and financial worries with kindness and positive humanitarian moments.

In the first session in a series of webinars hosted by the AANA, CEO John Broome and a panel of industry heavyweights from across marketing, media and advertising discussed the early impacts of the COVID-19 pandemic.

Getting the message

Martin Brown, Nestlé's director of e-business, strategy and marketing says in a crisis there is often a lag as to how the market adapts to a situation but the consumer response is often immediate.

He says the full economic impact on households has not yet taken hold because the forecast on unemployment is set to hit 10% by June, adding that until then we won't comprehend the "full magnitude" of the situation.

"This was last felt in 1991 when employment reached that level. So changes in behaviour are going to continue to evolve as reality sets in, it’s not an episode or an event and therefore will have a lasting impact," Brown says.

In response to the crisis, he says there are some obvious things brands need to do, adding that it was surprising how some of industry still needed to be reminded of marketing fundamentals.

Brown says during a time like this, a sense of urgency to "get out there and talk" can muddle a brand's message.

"Relate and be useful because at this point in time, because as inboxes are inundated with messages of brands saying they are here to help and support you, once you reach 100 different communications it stops feeling personal and useful," he says.

"There are also a lot of brands that people may be connecting with for the first time in a while, so giving some education around how to get the most out of them is vital."

In some ways, he says brands are going to find themselves in a fortuitous situation. It will act almost as a reminder of how valuable they are.

He says it then becomes a case of really being able to invest in building a sense of connection around the benefits that you deliver, which are critical at this point in time but are also ephemeral.

However, brands need to be seriously respectful of the challenge around unemployment and the prolonged impact that it can have on financial opportunity and mental health.

"Finding a way to link to the positives is something that can create a really strong bond and it’s something that I am yet to see brands engage in," Brown says. "When it comes to budget shoppers, there are some obvious things that brands can do to relate to their needs."

"Certainly this is a time to look at how you strip back features that are not adding value and make sure products are affordable. We are not going to see people buying in bulk, there is going to be movement down at the lowest single price points."

Underemployment in a 'two-speed' economy

​​​​​​Broome says one point not being made is that the economy is also going to be looking at a whole new set of metrics when dealing with a recession, with consumer sentiment and employment being the two key areas.

He says the government signally 10% unemployment hides a "multitude of sins".

"The statistic we need to focus on is actually underemployment which was a concept doing the rounds before the pandemic," Broome says. "This is talking about people who want to work more but can’t get more hours.

"This was around 15% before COVID truly set in. It’s likely going to reach 30% at the height of a recession and that adds a significant change in the economic environment."

For GroupM CIO Nic Lewis the last few weeks for her has centred around adapting to a new cadence of forecasting, moving from a quarterly and monthly approach to a daily, and in some instances, hourly scenario.

She says the immediate impact of COVID will most likely be felt across Q2 including April, May and June. 

"We’ve had countless campaigns moved or cancelled, those that have been paused are charged now and delivered later in the year," Lewis says.

"That’s going to ensure that there is a level of volatility in the numbers that we see when we try to forecast what those shifts in demand are actually going to be for the quarter."

GroupM is expecting to see the back half of Q3 as a recovery period, with Q4 becoming a stimulant period for ad spend.

She says the group is talking to clients daily to rationalise and balance the pulling of media spend with an ongoing media presence, whether that’s maintaining a spend or just pulling back slightly.

"At the moment we find ourselves in a two-speed sentiment economy, where we are reeling from sadness, fear of job security, confusion, while at the same time we have this kindness and humanity that is prevailing," Lewis says.

"From a media investment perspective, it’s therefore imperative to be observing what’s happening to customers. How are they feeling constantly and how do they want you to feel as a brand and respond."

Looking at the numbers, SMI MD Jane Ratcliffe says the impact for April won't be as bad as initially expected, with early reports claiming a 40-50% decline in ad spend.

She expects it to drop off roughly 30%, however, she acknowledged that the data presented only covered major national advertisers booking through media agencies.

Where the extra 10-20% is expect to come from is in the SME and direct booking sectors, which industry insiders already claim has "fallen off a cliff" and is the area of marketing most heavily impacted by they crisis.