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No Brand Can Sit This Out or Opt to ‘Wait and See’


WFA CEO Stephan Loerke on why 79% of brands are actively responding to the corona crisis and why now it’s time for ‘brand purpose on steroids'. By LBB’s Laura Swinton

No Brand Can Sit This Out or Opt to ‘Wait and See’
“It’s moved so fast, at lightening speeds. We’ve been in lockdown for the past three weeks but a bit more than a month ago people weren’t even forecasting the lockdown so things have changed so incredibly fast. Many brand owners were caught off guard,” says Stephan Loerke, CEO of the World Federation of Advertisers.

It’s been a dizzying month or so for marketers, as they’ve spun, swerved and pivoted to make sense of the new Covid-19 reality – and while they could be forgiven for having a rabbit-in-the-headlights moment, many brands have been swift in their response, according to findings from the WFA. 

Their member survey has found that although 81% of marketers at major multinationals have opted to defer their already-planned campaigns, 79% are also creating new messages that respond to the enormous impact of the crisis on the public. The WFA has also been bringing together case studies and examples of brands navigating the challenges well, on their 'Covid Compendium', hosted on their website.

These findings bear out what WFA CEO Stephan Loerke has been observing anecdotally. “What I was seeing before was that brands are taking rapid action, so in that sense I wasn’t surprised,” he says. “Brands have been extremely fast at adjusting to an environment which has totally changed. Brands need to be cognoscente of that and sensitive to that. I think no brand can sit this out or go for wait and see – there’s a sense of urgency to act.”

This proactive attitude has been driven by several factors. On the tech front, video conferencing and the availability of creative tools and devices mean it’s easier than ever to get work done. But on a human level, this crisis has a deeply emotional dimension that means that people who work for brands feel a need to somehow contribute.

“Things have changed compared to the financial meltdown in 2008-9, because then brands just cut the budget,” reflects Stephan. “In this case here, brands are pivoting  rather than just walking away. Many of them see an obligation and a need to be present in this environment – it’s a different kind of presence and that’s what I find particularly encouraging and exciting.”

“I do think that it’s a going to be a catalyst for change. Because there’s much more at stake than the stock market. When I think of this crisis, I’m thinking of my mum, you know? And my neighbours.”

Studies by Edelman and McCann have found that the public is placing greater trust in and expectations on brands and NGOs than they are on governments to take a lead during the crisis. 

And, after many years of the brand purpose debate, companies are suddenly being put to the test and are having to walk the walk. “There has been some long term conversation in the industry: is this hype? Is it real? What is greenwashing and what is genuine? Here, in the case the corona-crisis, the sentiment around this is multiplied by a thousand because it’s about public health, it’s about people’s lives , it’s about making society resilient. There can’t be a shadow of a doubt about why the brand is doing it,” says Stephan. “I find that many brands I’ve seen seem to be getting it and I find that very encouraging.”

While some brands like LVMH have come out in understated fashion to pledge their resources to the fight by producing hand sanitiser and giving it to the French authorities, other brands have been pulled up sharp by the public, who have spotted a disconnect between their messaging and their treatment of employees.

“It’s brand purpose on steroids,” says Stephan. “I’m a believer that brand purpose starts with the way a company treat its people. This is the context. How does a brand treat its people? How does it treat its partners and agencies? People expect a brand to behave in a consistent fashion.”

And that consistency also ought to extend to how brands treat their agencies. While no one can say exactly what the long term economic impact of Covid-19 will look like, some sectors, like hospitality and airlines, are being hammered more than others. And generally, it’s likely that spend will be down across the board – a WFA member poll at the end of March found that marketers predicted an average cut in spend of around 23%. But the poll also found that members had tried to be mindful of the impact on their partners, with 80% saying they’d already had conversations with their agencies and were trying to be transparent about how they are planning to navigate the short term.

The many years of industry debate and conversation around brand purpose could be paying off as Stephan observes that most brands that he sees reacting to the crisis understand this need to be consistent.

“A brand in today’s environment needs three things in order to connect with people. You need to be humble, it needs to be authentic and it needs to be useful. And a lot of that will remain true after the crisis,” he says. “It’s not a short term change then you move to something else, first of all, there’s not going to be a time where, suddenly, the crisis is over. It’s not a short thing, and people are going to expect things from brands that are different given the experience they’ve been through.” 

Another area where multinationals are more match-ready  than they were when facing the 2008 financial crash is in openness to adopting new technologies and a better sense of their digital infrastructure. “Clearly digital transformation has made the industry much more agile,” says Stephan. Just last week, WFA’s annual AGM saw members logging in from Guatemala to Auckland, something that would have been unthinkable just a few years ago.

And that connectivity has also brought the organisation’s members together in unexpected ways. "This corona crisis is demonstrating to the world that we are one village. Half on humanity is under lockdown… we’re all facing the same challenge. That is very powerful."

For one thing, they’ve been learning a lot from members in China, particularly, as well as their office in Singapore. Most markets in APAC are about four to six weeks ahead of EMEA and the Americas. Their governments have responded differently than those in Europe thanks to experience with dealing with SARS – in Singapore, for example, the authorities responded swiftly, but there was no full lockdown, meaning less disruption to business. However, there’s still lots to learn by coming together – for example in China, e-commerce platforms played a significant role in helping people connect and go about their business.

“If anything, China has moved even further down the digital transformation route with this crisis – that was interesting to be hearing from our Chinese colleagues. It was also interesting to hear that, after being in the aftermath shock of the lockdown, that they seem to be gradually opening – that gave us some hope.”

Looking to the longer term, Stephan observes a couple of interesting insights. One is that, during lockdown, WFA members have become more engaged with longer term projects and priorities, around issues like data ethics, brand safety and short term-ism. While they’re under a lot of pressure to pivot and deliver now, marketers appear to be taking the opportunity of working from home to address a bit of industry housekeeping.

“They’re adjusting to the new normal but they’re  also working on longer term subjects that are important to their f brands. There’s a lot of agility and brand owners are still in business and are still thinking about the future,” says Stephan.

“I’m  an optimist in my DNA I must admit but I’m absolutely convinced that the industry will come out of this crisis stronger and better.”

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LBB Editorial, Tue, 07 Apr 2020 16:22:16 GMT