When COVID-19 hit, Procter & Gamble (P&G) stepped up its advertising efforts while other giant firms went black. As a result, P&G’s marketing performance increased, while the latter’s decreased; hence, proving that you lose sales if you stop promoting.
Every brand was put to the test by the virus. The bold, the astute, and those with long memories redoubled their efforts. Those with smaller budgets, shorter memories, or lower levels of leadership were forced to cut corners and pay the consequence.
Marketers worldwide had to figure out what they were going to do with their 2020 ad budgets. As customers stayed at home, reined in their spending, and saved money, businesses faced an unprecedented and valuable income decrease.
However, some companies benefited from these closures and cutting of ad-spend of significant firms—for instance, Procter & Gamble, whose earnings doubled despite the pandemic. Hence, everyone became interested in why P&G’s marketing performance increased despite having COVID-infested quarters ahead.
The P&G’s Lead
There were three reasons why P&G’s marketing performance pampered despite the dreadful days of 2020. For starters, the company’s age indicates that it has already withstood several huge hurdles.
For huge brands like Uber and Tesla, this was the first great macroeconomic test. For P&G, formed in 1837, Covid was merely the next great thing on a long and winding journey.
Secondbump, P&G has not only successfully passed these stumbling blocks but has also benefited from them. It’s one of the company’s most well-known characteristics. If you look at the company’s performance amid a severe crisis, you’ll notice that the same ancient P&G script is used, the same wise heads are in charge, and the same subsequent success results. P&G thrives in difficult times, not despite them.
Finally, P&G pioneered the different concepts of branding, brand management, for instance. A modern brand manager was born as a result of this. That is a well-organized and well-functioning brand house. As a result, the terms “above-the-line” and “below-the-line” were coined.
Above-the-line (ATL) is used in advertising when the goal is a larger audience through mass media. Radio, television, print media such as newspapers and magazines, and billboards are all examples of ATL.
Since, it is designed to reach a bigger audience and increase brand awareness, this form of advertising offers many advantages. However, it comes at a high expense and is usually reserved for more giant corporations.
Below-the-line (BTL), on the other hand, is targeted at a small, specific audience. Brochures, direct mail, fliers, sponsorships, and email campaigns are examples of BTL marketing.
BTL is incredibly effective in fostering pleasant discussions and creating consumer loyalty, despite not being as showy or in-your-face as above-the-line advertising. You may develop custom-built interaction that speaks directly to your customer using below-the-line advertising.
According to P&G’s Chief Finance Officer, Jon Moeller, “the best response to what we are confronted with today is to push forward, not to shrink back,” he told analysts. This was not the moment to “retrench,” according to Moeller. His company would instead “double down” and “go forward, not backward.”
According to Moeller’s answers, P&G was not only going to keep advertising and commit to its entire 2020 budget, but it was also going to increase budgets in the face of Covid-19. It was all about servicing customers, retail partners, and society in general for Moeller. It was also financially sound for P&G.
Faced with Covid-19, most major corporations have decided to decrease their 2020 advertising spending in several cases. During the first half of 2020, according to the World Economic Forum, total advertising investment in the United States fell by 10%, while it fell by a stunning 14% in the United Kingdom. According to the Interactive Advertising Bureau, over a quarter of firms (24%) had stopped all advertising by the second quarter.
Big firms went backward rather than moving forwards. During the deadliest months of the pandemic, Coca-Cola, for example, “paused” its global promotional operations. Advertising spending was slashed by 35%, while the company’s communications budget was cut by £2 billion that year. As a result, PepsiCo, Coca-Cola’s arch-rival, gained a significant advantage reporting a 5% increase in net sales in 2020.
Don’t cut ad spend in a crisis.
The existence of the pandemic was beyond imagination. As consumers are going through a difficult time, brands are cutting back on advertising. But, one brand, on the other hand, continues to invest in marketing and reaps the benefits because of the competitors’ silence, not because of the company or the customers it targets. P&G’s marketing performance proves that having too much spendings can also lead to significant growth in the short and long run.