Just like the two-by-four the old farmer kept handy to get his stubborn mule's attention the coronavirus pandemic has hit the advertising business right between the eyes. From gutted corporate ad budgets to cancelled massive media buys, the revenue streams that once flowed to the bottom lines of major networks, the ad agencies, and the digital giants have shrunk dramatically. As for future spending, the prospect of a slow economic recovery points to a financial tap that's unlikely to be loosened anytime soon.
While plant and office closings, furloughs, and draconian budget cuts have reflected the pandemic's economic pain in travel, retail, and a host of other sectors, many companies nonetheless have distinguished themselves by demonstrating that their purpose can go beyond profits. Call it philanthropy, corporate good citizenship, or social responsibility. They are giving priority to their employees, communities, and customers in cushioning the coronavirus's blow. The effort is not only laudable; it makes business as well as humanitarian sense.
Not surprisingly at the Fortune 500 level, the stories have made news. Production line workers at Campbell's and Nestle are earning increased pay and sick leave benefits; PwC is providing childcare support for its consultants; Microsoft is offering parental leave to help with children out of school for its managerial and technical ranks. After decades of intoning shareholder value as the divine dictate governing all decisions, the human focus of these crisis driven initiatives is striking, however durable they may or may not prove to be down the road.
Turning their property, plant, and equipment to respond to the pandemic has similarly reflected well on businesses large and small. Examples abound. IBM has lashed its computing capabilities to a public-private computing consortium; with 37 members and 46 projects the collaboration is accelerating COVID-19 modeling and research. Amazon, Google, and Intel, to mention a few other powerhouses, are participating as well. Or, consider Lineage Logistics, a leading refrigerated transport company. Lineage is pitching in cash and its capacity along with others to help non-profits provide 100 million meals to people in need.
As Carol Cone and Kristin Kenney explain in Fast Money, these good deeds are "smart generosity." Their insightful article details why companies with a purpose do better as enterprises as well as in coping with crises. Its case: the corporate mantra intoning "shareholder value" as the immutable priority is inadequate when a crisis like the pandemic makes the needs of employees, customers, and other stakeholders crucial to businesses' economic survival. Marketing firms, advertising agencies and media gurus should listen up.
In broadcast, cable and on-line, companies obviously know COVID-19 and its consequences call for communicating sympathy and sincerity, not selling. The similarity of their messaging—typically 30 seconds or so of gentle melodies and soft-focused scenes with an empathetic voice-over offering encouragement and advice on staying safe followed by assurances of help and togetherness—is hard to miss. Concern and outreach, of course, have their place. But with the pandemic and its economic effects certain to last well into next year or even longer, the question is, "what next?"
Polling suggests Cone and Kenney have an answer. In fact, a March survey by Morning Consult, a business intelligence firm, shows why. The survey suggests among their viewers the impact of empathetic ads already has topped out. When asked what they wanted from advertising in the current crisis, only 10 percent of respondents said corporate sympathy. Most, 44 percent, sought information on new offers, the status of stores, and on-line shopping options. But nearly a quarter—24 percent—wanted to know something else: how advertisers were helping during the pandemic.
The survey suggests that not a few Americans expect companies to do more than check-writing when it comes to their philanthropic and societal roles. They expect them to walk the talk. It's hardly a new insight. Among the 47,000 consumers surveyed by the Reputation Institute in 2015, 42 percent said how they feel about a corporation is based on its level of social responsibility. The same goes for employees. Surveys show that companies engaged with their communities—for example, firms that sponsor employee volunteer work—not only build morale but also their retention rates.
Last August, The Business Roundtable, an association of over 180 leading American chief executive officers, coincidentally acknowledged that corporations were facing challenges that their traditional performance criteria didn't address. Companies, the CEOs agreed, needed to rethink their social as well as economic role. Their widely noted declaration, issued as the economy continued to boom, addressed the nation's growing economic disparities, highlighting the importance of companies investing in their employees and communities. Whatever else it does to their businesses, the pandemic and the recession put their words in bold face.
In any case for anyone in corporate marketing and media trying to figure out the message that should come next, the implication is clear. As the pandemic and recession compel companies to redesign or even reinvent how they do business, their messages needs to convey how they are contributing to meeting the public health challenge and supporting economic recovery. Fortunately, among businesses large and small across the country examples abound, as do the opportunities for companies that have yet to help to learn from others who are.
Shareholder value is one thing, shared values another. As Andrew Carnegie, no slouch at building a business, put it, "As I grow older, I pay less attention to what men say. I just watch what they do."Click the social buttons to share this story with colleagues and friends.