Brands as an Ingredient by Microsoft Advertising Brand Studio

?Watch our weekly Digital Brainstorm with the Microsoft Brand Studio. We go deep on a brand topic every week. Live exclusively on LinkedIn. Hosted by Geoff Colon and Aya Kikimova.

74% of respondents to a GlobalWebIndex survey expect Covid-19 to have an impact on their personal finances.

Over 80% expect the crisis to have a big or dramatic impact on the local and global economy.

96% of executive decision makers believe we're headed toward a recession.

Last week (April 29th) my colleague Aya Kikimova talked about how brands have a compass to give them direction into consumer sentiment during this moment in time. But just like explorers, how do we go from having a broad navigational device that gives us to a more detailed map of the desired location we want to travel to?

Big takeaways of the moment for senior business leadership to ponder:

1. Crisis continues as recession is looming.
2. Survival means finding partnerships that are synergistic and reach the target. audience based on behaviors. In other words, acting as an ingredient of a finished recipe made up of a number of brands.
3. Optimizing on a state-by-state basis.
4. Pricing and positioning products to fit depressed wages.

Crisis continues as recession is looming

Analysis noted that 96% of senior executives at Fortune 500 companies believe we are extremely likely or already in a recession. Accepting this reality can help brands adjust faster than simply trying to operate as if people will behave with an ordinary attitude or things will recuperate quickly. The challenge is now two-fold: Covid-19 is both a health challenge and an economic challenge.

One important acknowledgement is to understand that while states re-open, behavior will lag in catching up. This means being prepared to ride out a series of rogue waves for possibly a year or more may need to be incorporated into your brand management navigational plans.

Also the survey data may not reflect reality. In a survey from GlobalWebIndex, 9 in 10 respondents believe that Covid-19 will last at least 2 months in the US; while 37% believe 2-3 months to be the time.

74% expect to have an impact on their personal finances. Over 80% expect the crisis to have a big or dramatic impact on the local and global economy.

So your brand management map at this time may not be simply answering the one destination you need to go to but possibly 5 to 8 different destinations you may have to go to all depending on the context of the economic circumstances and outcomes we face.

Survival means finding partnerships that are synergistic and reach the target. audience based on behaviors. In other words, acting as an ingredient of a finished recipe made up of a number of brands.

Beer and Pampers? What about both?

This is something that also may be necessary if economic conditions draw out a recession for almost 18 months.

It may be time for brands to find interesting collaborations based on shared data actions. Just like scientists are more open source with their data on how to find a cure for Covid-19, brands might need to join forces to get more for their marketing expenditures. And the weirder the collaborations, the better they might be.

Why? Because it will help draw awareness which is paramount during this time. So the more that brands that seem at polar opposites join forces, the better. So why do beer and Pampers work? Because it targets new fathers. And reaches them whenever they are figuring out what they need to buy online and pick-up in store (BOPIS).

Optimizing on a state-by-state or country-by-country basis

Geo-targeting strategies are going to be very important over the next several months. Not all territories will be equal. So what happens in some states may not happen in others. Are brand websites ready for this? Are they armed with the most up to date intelligence? This is where real time strategy will help while also staying focused on the long term implications. While some states will re-open we could see closures again coming in October. Staying up to date with state government agencies will be important in order to not miscommunicate to audiences what is going on.

Also monitoring temporary behaviors will be important in order to communicate on a state-by-state or country-by-country basis. Understanding where consumers are will help senior leadership deliver messages to a wider audience. Consumers are currently...

All of this is leading to permanent behavioral shifts which are expected in...

It's key to follow what behavior is temporary and what shifts to permanent as the global map

Pricing and positioning products to fit depressed wages

Brands need to consider how to align from the messaging and targeting perspective on reaching their consumers during these activities that have become the next normal. But they also need to think about something else. With depressed wages comes an opportunity for new products to own the category at a reduced price. What do we mean by this?

Think about a category like yoga. It's filled with many brands. All high end with high prices. While aspirational, they are not attainable for many during this time. A new brand or an existing legacy brand could come up with a product that is lower in cost, sells more units and becomes the "Default" for many.

In other words, we are in a climate in which the "Victory of Defaults" may take the pole position. Aya and I spoke about this in our 2020 Vision Report: Trends to Define the Next Decade as a trend called "The Victory of Defaults." This is something that could be built by many brands during this period.

Geoffrey Colon and Aya Kikimova are part of the Microsoft Advertising Brand Studio. Follow Microsoft Advertising here on LinkedIn.