COVID-19’s Impact on CPG Advertising

The is no disagreement that COVID-19 will forever alter the consumer goods landscape. For instance, COVID-19 has dramatically impacted how CPG manufacturers communicate with shoppers. Brand messaging has evolved in several stages. 

First, it quickly became apparent that advertisers needed to be sensitive to consumers dealing with a lot of uncertainty during COVID-19 and to asses current advertising campaigns. Several companies pulled their ads due to the perception that the message was not appropriate, mostly due to images where people were in violation of guidelines such as social distancing. KFC pulled a campaign due to images of people licking their fingers stating, “It doesn’t feel like the right time to be airing this campaign.” Hershey pulled “Heartwarming the World” responding to public criticism, “Sadly, we have decided to temporarily replace two of our ads that feature human interaction, that includes hugging and handshakes, due to the current sensitivities surrounding the COVID-19 virus.” Lysol and Clorox were criticized for advertising as those products were constantly out of stock and consumers felt the companies were attempting to capitalize on the pandemic.

The second impact COVID-19 had on CPG advertising was the pausing or cancellation of future advertising. Many brands cut their advertising budgets in preparation for the potential economic fallout. According to the IAB, 82% of media buyers have adjusted or paused advertising. The food category ad sales have declined -7.7% during the pandemic while ad spend grew 4.9% pre-COVID according to WARC.  The investment declines are hitting traditional media hard with TV declining -13.8% and print down -20%. Digital media has also declined but to a much lesser degree than traditional channels.

The third impact COVID-19 had on consumer package goods brands was a change in strategy. Companies began to take the “we are with you” approach. The focus was on being sensitive to consumers who are dealing with a lot of uncertainty. Long standing brands focused on trust to establish a sense of normalcy. Kraft launched the “We got you America” campaign that was filmed by factory employees with cell phones showing how the company is working hard to support Americans during the pandemic. Lysol was one of the first companies to incorporate COVID as part of their message. Since then the number of campaigns focusing on the pandemic have increased.

As the consumer-packaged goods industry moves toward a “new normal” brands will look to exercise caution but return to a focus on what makes their brand “their brand”. Yet there are a lot of unknowns during the back half of 2020 that may impact the message. In the short-term brands are navigating a summer with postponement or cancellation of professional sports, concerts, and festivals. In addition, the future is filled with a lot of uncertainty surrounding increasing COVID-19 cases, civil unrest, and a contentious election cycle. CPG companies will need to navigate the news cycle in order to gauge the evolving consumer behavior. Ultimately, brands will need to focus on what they can control in terms of the message, the spend, and the format. Developing advertising messages that communicates how the brand meets the current consumer need will be essential moving forward.

Author: Sean Thompson, Senior Analyst Fletcher/CSI