Advertising during the COVID-19 Global Pandemic: The Rise of Influencer Marketing Strategies in a Recession
This study explores the impact of a recession on advertising strategies and consumer behavior, as well as the current pandemic's implications for the industry. It concludes with recommendations for advertising in the future.
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[00:00:01.010]Hello, my name is Bre TenHulzen
[00:00:03.570]and the topic I researched was advertising
[00:00:05.940]during the COVID-19 global pandemic,
[00:00:08.320]specifically the rise of influencer marketing strategies
[00:00:11.400]in a recession.
[00:00:14.070]So the objective for my study was
[00:00:15.650]to analyze the impact of recessions,
[00:00:17.940]specifically the COVID-19 global pandemic
[00:00:20.830]on consumer behavior and advertising.
[00:00:23.710]Then I wanted to conclude by generating recommendations
[00:00:26.640]for advertisers moving forward.
[00:00:28.591]The method I used for this study
[00:00:30.400]was an extended literature review.
[00:00:32.620]This allowed me to synthesize a broad range of literature
[00:00:35.722]and also to gather the most accurate information
[00:00:39.030]since the data was changing every day.
[00:00:41.810]I also pulled themes from past recessions
[00:00:44.150]to apply to my current research.
[00:00:46.390]The first topic I looked at in my literature review
[00:00:48.870]was the social learning theory.
[00:00:50.810]This theory shows
[00:00:51.770]that people can learn from merely observing others,
[00:00:54.110]which added a social aspect to existing theories.
[00:00:57.191]It shows that role models
[00:00:58.850]can foster a positive or negative behavior,
[00:01:02.030]and it's also the basis of advertising.
[00:01:04.410]So you'll see the four principles listed on the right.
[00:01:07.030]With advertising people want you to pay attention
[00:01:09.980]to the message that they're displaying.
[00:01:11.690]They want you to retain the information that you see
[00:01:14.360]and be capable of reproducing the action.
[00:01:17.010]And they want you to be motivated to go out
[00:01:18.820]and buy their product.
[00:01:22.560]Next I looked at the effects of recessions
[00:01:25.000]on consumer behavior and advertising.
[00:01:27.640]So during recessions consumers reevaluate their priorities,
[00:01:31.170]reallocate funds, redefine value.
[00:01:34.030]They also become less loyal to brands
[00:01:36.300]and more skeptic of marketing messages.
[00:01:38.648]During recessions advertisers suffer budget cuts
[00:01:42.380]and increased scrutiny.
[00:01:44.190]There's also less "noise" in the advertising space.
[00:01:46.980]And there's a lower cost to advertise.
[00:01:50.670]Last I looked at the development of influencer marketing.
[00:01:53.780]So this is an old concept, but the adaptation
[00:01:56.600]to social media is new.
[00:01:58.410]An influencer on social media
[00:01:59.900]is paid to post about a brand's product or service
[00:02:02.920]to relay the brand's message to their followers.
[00:02:05.790]This industry has skyrocketed
[00:02:07.640]within the last couple of years.
[00:02:09.620]It was worth 1.7 billion in 2016.
[00:02:12.420]And in 2020 it was worth 9.7 billion.
[00:02:15.520]It's also proved to be more effective.
[00:02:17.440]It produces an 11 times greater return on investment
[00:02:20.549]than traditional marketing,
[00:02:22.780]and 92% of consumers trust recommendations
[00:02:25.810]from others over branded content.
[00:02:29.420]Now I will discuss my results that I found
[00:02:31.870]from COVID-19 specific research.
[00:02:34.810]Like all industries,
[00:02:35.930]I found that there is a huge disruption
[00:02:37.710]of the advertising industry.
[00:02:39.620]Pre-pandemic consumers were subject
[00:02:41.610]to 4,000 to 10,000 ads per day.
[00:02:44.730]But with lockdowns on stay at home orders
[00:02:47.510]people were no longer commuting.
[00:02:50.050]And this negated the effectiveness
[00:02:51.590]of a lot of traditional advertisements.
[00:02:54.070]So the industry lost 26 billion in revenue.
[00:02:57.180]64% of advertisers postponed their campaigns
[00:03:00.490]and 44% canceled their campaigns entirely.
[00:03:04.870]There was also a huge shift
[00:03:06.210]in consumers and their purchasing decisions.
[00:03:09.070]A lot of them changed value and loyalty
[00:03:11.140]as 75% of consumers have shifted their brands.
[00:03:15.270]There's also an increased attention
[00:03:16.770]to corporate social responsibility.
[00:03:18.850]Gen Z specifically pays more attention
[00:03:21.190]to corporate social responsibility when purchasing.
[00:03:24.420]There's now the emergence of a homebody economy
[00:03:26.600]since people are spending more time at home
[00:03:28.440]and more money online.
[00:03:30.220]And there's also a heightened distrust of media
[00:03:33.870]With social media spreading information so quickly,
[00:03:35.955]people just aren't sure who to trust.
[00:03:39.580]As we've all seen,
[00:03:40.440]there's also been a monumental shift to digital.
[00:03:43.230]In the first three months of 2020
[00:03:45.150]the U.S. actually witnessed 10 years
[00:03:47.090]of digital e-commerce growth than it expected.
[00:03:50.520]Also 68% of people have higher expectations
[00:03:53.650]of brands' digital capabilities,
[00:03:55.700]and between 46% and 51% of Americans
[00:03:58.410]have started using social media more.
[00:04:01.870]In my discussion,
[00:04:02.830]I looked at how I could create recommendations
[00:04:05.240]with so much uncertainty.
[00:04:07.210]So I took a look at what was certain.
[00:04:09.300]There's increasing resistance to traditional advertisements,
[00:04:12.390]a greater emphasis now on human connection,
[00:04:15.150]the popularity of social media, explosion of e-commerce,
[00:04:19.110]and the social learning theory
[00:04:20.460]is still applicable to advertising.
[00:04:23.790]So my first recommendation is
[00:04:25.570]to incorporate corporate social responsibility tactics.
[00:04:29.030]These can include donating money or resources,
[00:04:31.580]providing support to employees, and promoting precautions,
[00:04:34.790]which all prove that the brand is socially aware.
[00:04:37.470]Kora Organics is a great example of this
[00:04:39.640]as they donated product sets to medical staff
[00:04:42.190]and first responders, they post weekly skincare routines
[00:04:45.308]and they partnered with the Snap Foundation
[00:04:47.420]to donate COVID-relief funds.
[00:04:50.410]Advertisers should also take advantage
[00:04:52.330]of the reduced "noise".
[00:04:53.910]They can utilize this space to make themselves known
[00:04:56.150]as socially active, reliable and considerate.
[00:05:00.000]Daily Harvest did this.
[00:05:01.350]It's a frozen food startup
[00:05:02.900]that began hiring out of work chefs
[00:05:05.130]to help them create new flavors.
[00:05:07.030]They donated thousands of meals
[00:05:08.490]to frontline healthcare workers
[00:05:10.470]and to a large food rescue organization.
[00:05:14.330]If they can, advertisers should work to combat distrust.
[00:05:17.740]They can work with reputable experts, healthcare personnel,
[00:05:20.990]or influencers to give consumers the credible information
[00:05:24.060]that they're looking for.
[00:05:25.290]This will help the brand emerge from the pandemic
[00:05:27.240]as more trustworthy.
[00:05:29.830]Rootine Vitamins is a great example of this,
[00:05:32.060]as they shifted their research team's focus
[00:05:34.290]to COVID-19 research to offer the public clear
[00:05:37.580]and accurate information.
[00:05:39.420]They also made a public Slack channel
[00:05:41.130]for people to ask questions and learn.
[00:05:43.150]And they also developed public antibody tests.
[00:05:47.020]Brands should also work to prove their authenticity.
[00:05:49.800]In 2020 at the beginning,
[00:05:51.570]a lot of people were getting emails
[00:05:53.010]that said "We're in this together",
[00:05:54.740]but those quickly lost resonance.
[00:05:56.740]People began paying more attention
[00:05:58.290]to brands' actions during the crisis.
[00:06:00.750]They also felt averse toward brands
[00:06:02.610]that were taking advantage of them as consumers.
[00:06:05.500]McDonald's posted this image of their logo separated
[00:06:09.850]with the message of social distancing,
[00:06:12.220]but they also ranked top on the list of 20 businesses
[00:06:15.630]with highest number of workers without paid sick leave.
[00:06:18.730]This received backlash for being an "unhelpful PR stunt".
[00:06:23.420]Lastly, brands should work
[00:06:24.640]to incorporate influencer marketing.
[00:06:26.750]This is a great alternative for those with reduced budgets.
[00:06:29.870]It costs one third of the price
[00:06:31.360]of normal social media advertising.
[00:06:33.700]And users are more likely to engage with content
[00:06:36.370]that comes from people that are like them.
[00:06:39.020]It also mitigates the distrust
[00:06:40.600]that consumers have toward brands,
[00:06:42.170]as 92% of consumers trust people over brands.
[00:06:45.920]Lastly, it gives brands access to users
[00:06:47.810]who may not otherwise have interacted with them.
[00:06:50.820]The reason that all of this is so important is
[00:06:52.890]because these factors aren't just temporary.
[00:06:55.640]They're gonna stick around for a while.
[00:06:57.900]The homebody economy and e-commerce boom
[00:06:59.740]are expected to outlive the pandemic.
[00:07:01.930]70% of people in the survey said
[00:07:03.980]they won't return to their normal activities
[00:07:05.985]once the pandemic's over.
[00:07:08.210]Also relationships formed between brands and consumers
[00:07:11.270]during a crisis can be more meaningful than normal times.
[00:07:15.000]Because of this advertisers need to be aware
[00:07:17.520]of the pandemic's implications on people
[00:07:19.890]in order to create effective strategies moving forward.
[00:07:24.220]Future studies can look at COVID-19 effects
[00:07:27.150]on public perception of media,
[00:07:29.380]long-term consumer behavior changes,
[00:07:31.700]social media usage,
[00:07:33.410]the effectiveness of influencer marketing,
[00:07:35.520]and mental health.
[00:07:37.550]I'd like to thank all these people
[00:07:39.260]for making this project possible.
[00:07:42.850]Thanks for listening.
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