Why This is a Once-In-A-Generation Opportunity to Gain Market Share
The most succinct piece of advice I’ve come across during the pandemic was in a social media post by Peter Weinberg, Global Lead at the B2B Institute, LinkedIn’s think tank that partners with brand experts to research the future of B2B marketing.
“Don’t touch your face, your stocks, or your ads.”
Weinberg appeared on Simulmedia Live back in January to discuss the classic marketing strategies that will power growth in 2020. Much of his wisdom has held firm even throughout this crisis, proving the strategies he pitched really are timeless. One of his principles, though, is more relevant today than ever: Invest in share of voice, or what he calls, the percentage of the market you're actually reaching with your advertising.
“I need to reach exponentially more customers than I have in order to grow,” said Weinberg on our show. “The more customers I reach, the more money I get back in terms of market share.”
Which brings me back to his recent social post on why “even in bad times, marketers still have a job to do.” Weinberg references a report by Peter Field, a B2B Institute Research fellow. Field’s research focuses on the 2008 recession, using IPA data that proves marketers who can afford to ‘keep their lights on’ during bad times will capture most of the growth in the good times, when the economy has recovered.
His report explains how brands that cut advertising budgets and extra share of voice (ESOV) felt short-term relief to profitability, but ultimately lost market share. In fact, of the brands he studied, the ones that invested in share of voice saw “5 times as many very large business effects (such as profit, pricing, share, penetration etc.) and 4.5 times the annual market share growth.”
“What is certain from the 2008 experience and earlier recessions is that 'going dark' by pulling all brand advertising brings the real risk of permanently weakened business performance,” said Field.
Field says today’s pandemic provides advertisers with a uniquely attainable opportunity to defend their brands and gain market share.
“The good news for businesses that defend their brands is – because some advertisers will pull budgets thus reducing category ad spend – maintaining SOV is likely to be cheaper than in normal times,” said Field.
“In this recession, we can also add the opportunity presented by a house-bound population’s growing usage of media such as TV, social and online news channels.”
Weinberg and Field aren’t the only ones calling for marketers to avoid going dark if they can, drawing on a marketing principle that states for every 10 points of ESOV, a brand will achieve .5% of market share gain.
We’ve continued hosting weekly Simulmedia Live remote episodes, and several of our notable guests have echoed Weinberg and Field’s beliefs.
Bob Liodice, CEO of the ANA said, “It's a great opportunity to gain share of market. Share is so difficult to gain no matter what industry that you're in. When you can spend, when others can't, you can win share of market and make that almost a permanent new level.”
“Take the time to invest, think about the share of market gains that will stick to your ribs for a longer period of time,” said Liodice, adding that building brand-equity will have tremendous benefits for long term growth.
Bill Harvey, CEO of Bill Harvey Consulting, looked back even further - to the 1930s and ‘40s - to explain how Kellogg’s swallowed up Post Cereal’s consumers by continuing to advertise through the Great Depression and into WWII.
“[Advertisers] should stay present, they shouldn't be perceived as abandoning their customers and their prospects to deal with the situation alone,” said Harvey. “If you look at World War II, two big cereal companies went into World War II with about the same market share.”
“Post Cereals wasn't present, didn't continue to advertise during the war. Kellogg's did, and Kellogg's came out at the end of the war with doubled the market share of Post Cereals, and has maintained that lead right up until now.”
A recent Kantar report, the "COVID-19 Barometer," visualizes the decline in brand health of those who didn’t advertise through historic recessions, reinforcing what Harvey, Liodice and Field discussed.
While we like to say that history repeats itself, this pandemic is in a league of its own. So Simulmedia pulled anonymized data sourced from several Simulmedia advertisers to reveal the impact that cutting ads has had on digital traffic in the past few months.
It’s important to note that we only included advertisers who have been identified as having a product that they can still advertise (meaning, the pandemic has not impaired their supply chains or deprived them of customers, and they are able to meet increased demand that advertising generates.) The only difference is that some chose to stay on the air (blue), while others pulled their spots (red).
The results are striking. Those that are continuing to advertise through this pandemic are seeing spikes in digital traffic even higher than before the pandemic. As a result, they are on the path to gain market share.
Gaining market share now is very attainable, and we’ve built a free interactive tool called Brand Insights to help you do it. With Brand Insights, you can quickly identify opportunities to reach more of your untapped target audience, including people your competition has missed out on, and then you can activate those insights to ensure an increased share of voice
Powered directly by our patented software, the insights update in near real-time and change dynamically based on your selection of target audience, time period, brand and competitor. Contact us today to explore it for yourself and quickly identify how you can reach more of the people you care about.