KFC decided a finger lickin’ ad would not be appropriate during a pandemic when frequent hand washing and social distancing were the new social norms:
For now, companies are competing differently.
Business firms are reducing the dollars they spend on ads.
In its quarterly earnings report, Google’s parent, Alphabet, told investors that ad revenue was significantly down because of COVID-19. As you might expect, travel and entertainments ads have evaporated. Digital ad spending for March and April is down 38 percent from projections. For TV and radio, print, and billboards, spending has decreased between 40 and 51 percent.
In addition, the ads that remain have changed.
Do think pizza. The companies that used to say they were the most cheesy are now telling us that they don’t touch our food:
Hotels suggest that we stay home:
In this engaging ad, AT&T lets us know they support remote learning:
But Apple is the best. They know how to tug at our hearts, make us smile, and give us hope. At the same time, they are perpetuating the creativity that is their brand:
Our Bottom Line: Competitive Market Structures
Ads are pivoting from telling us something good about their goods or services to providing a comforting message. Like AT&T and Apple, many appear to be selling nothing. Some are telling us about the jobs they are adding (Walmart) or the shoes they are giving to healthcare workers (Crocs).
Still, it us all about competition.
A firm’s market structure influences what it says to us. As economists, it returns us to our continuum of market structures where, moving from left to right, firms grow larger and more powerful. With perfect competition, we find markets populated by many small firms that produce almost identical products such as potatoes or asparagus. Next, monopolistic competition includes businesses that cut hair or sell clothing. Each of those businesses have many competitors. However, like hair salons, they do something similar (hair cuts) but also have something distinctive (a certain stylist) that gives them some pricing power and product differentiation. The real power, though, to price and produce takes us to the right with the oligopolies that compete against several other large firms and monopolies that have no competition.
In this competitive market structure continuum, the four slots really represent an infinite number of positions that companies can occupy:
Even during a pandemics, a company’s ads reflect the market in which it competes.
My sources and more: NPR’s On the Media was today’s starting point for pandemic advertising. They took me to The Atlantic. From there, the NY Times is a possibility as well as Vanity Fair. and The Washington Post.