What Crisis Can Teach Us About Marketing During COVID-19

DyanaHarun · Post time 21-1-2021 02:43 PM

The global pandemic of the new coronavirus (COVID-19) brings us all into uncharted waters, but there are many lessons we can take from history about how to survive—and even thrive—in difficult times. Belt-tightening may feel natural during times of economic uncertainty, but history offers the fascinating story of The Kellogg's Company’s advertising approach during the Great Depression, showing that it’s actually an important moment to invest in a smart, responsible marketing strategy.

Kellogg’s Corn Flakes Great Depression Story

Today, many grocery stores devote an entire aisle to breakfast cereal. But nearly a century ago, pre-packaged, ready-to-eat cereal wasn’t yet the breakfast staple we consider it today. As a product, it had been around for a few decades but it hadn’t really caught on as one of the most popular choices for a morning meal.

When 1929 brought the most devastating economic downturn the modern world had yet experienced, many companies reacted by immediately slashing advertising budgets as a way to cut down expenses. The two major players in the cereal business—Kellogg’s and Post—took distinctly different routes.

Wall Street crashed, millions of people and businesses saw their investments wiped out, unemployment soared, and consumer spending floundered. There was no way to know what would happen to consumer demand for breakfast cereal, so Post did what many other businesses were doing—cut back their marketing.

Kellogg’s chose a drastically different approach. The company actually began to aggressively increase its marketing, doubling its budget for advertising. Remember Snap, Crackle and Pop? They were born in the 1930s, an investment in a new ad campaign, amongst a reeling world economy.

By 1933, thousands of banks had gone out of business and unemployment had reached a staggering 25 percent, but Kellogg’s was experiencing a nearly 30 percent rise in profits. Their strategy not only moved pre-packed breakfast cereal from a minor commodity to a widespread, popular breakfast choice, it cemented the company’s own position as the dominant force in the market.

History’s lessons for a COVID-19 business environment

Nearly a century of studies have shown time and time again that many companies pull back on marketing and advertising in a recession or during fears of a recession. These studies all consistently show that businesses that do choose to advertise during an economic downturn experience a better return on investment, often seeing the dividends of their marketing investment for years afterward. One study showed that 86 percent of people felt better about a company’s commitment to their products and services if they advertised during a recession and these brands were more top-of-mind when it was time for a purchasing decision.