By Suzanne Vranica
Progressive Corp.'s advertising team met several weeks ago to plan a coming commercial that shows the insurance giant's pitchwoman, Flo, fleeing a bowling alley to help someone whose car was mangled by a falling basketball hoop.
A debate broke out on the video call over a sensitive issue: Should the characters in the spot be wearing masks?
It is the sort of discussion advertisers are having in 2020. Marketing is about telling consumers a story. For the better part of the year, companies have struggled to determine what story to tell and tone to strike -- and whether spending on ads now is even a good idea -- amid an unprecedented global health crisis.
Madison Avenue has always been mindful of the nation's mood, airing patriotic ads during wartime and nostalgic spots with vintage jingles during recessions to remind consumers they have come through bad times before. Being in sync with the national psyche has been especially hard this year, given the unpredictability of the Covid-19 pandemic, anxiety over the coming presidential election and upheaval over racial justice and police brutality.
"It's a perfect storm of disasters that advertisers have to navigate," said ad-industry veteran Jeff Goodby, co-founder of Goodby, Silverstein & Partners. "It's different from anything that has ever come before."
Some viewers expect to see cues about current events on the screen, such as actors practicing social distancing, while others want to escape from reality, Mr. Goodby said. Brands must figure out when it is right to comfort viewers and when to hard-sell them.
Some companies stuck to inspirational spots during the early days of the pandemic. General Motors Co. ran a spot showing a man helping load bundles of hay into a pickup and another man turning on the lights at a Chevy dealership. Apple Inc. relied on a montage of images of people using its products to stay creative, including celebrities such as John Krasinski working on an episode of his YouTube show. McDonald's Corp. showed a montage of golden-arch signs at restaurants around the country being lit up before daybreak.
Others used pandemic ads that more aggressively tried to drive sales. Domino's Pizza Inc. riffed on the 1983 film "Risky Business" to promote a contactless delivery service for those who didn't want to interact with drivers, while Starbucks Corp. aired an upbeat ad plugging its app, announcing "we are ready to welcome you back." Those who missed the mark received criticism on social media. Mint Mobile was slammed when the virus broke out and it didn't pull down an ad featuring people eating queso dip with their fingers fast enough.
Many big advertisers wrestled with whether to redirect or slash their marketing dollars, especially when live sports went dark. Some $30 billion in U.S. ad spending is expected to be cut this year, with firms hit hard by production shutdowns and stay-at-home orders slashing the most.
Anheuser-Busch InBev decreased its ad spending by a double-digit percentage, with TV budgets curtailed and money being steered to digital channels. "We were freaking out about the business, no sports, no bars, no restaurants," said Marcel Marcondes, U.S. chief marketing officer of Anheuser-Busch. Ad-tracking firm Kantar estimates that Anheuser's U.S. ad spending, excluding social media ads, declined 38% during the first half of the year.
The brewer leaned on consumer data to help it figure out where to reach consumers. Its online daily poll of some 7,000 consumers showed some people were drinking while playing videogames, so the brewer created a tournament that involved professional athletes playing "Call of Duty" and aired it on Amazon.com's Twitch. During the event, ads promoted Bud Light Seltzer and informed viewers the products were available to order on Drizly.com, an alcohol delivery company. During the three week period that the tournament was running, sales of the product on Drizly more than quintupled, the company said.
Some companies kept spending but adapted their messages to capitalize on changing consumer habits. Spice maker McCormick & Co., Inc. saw a surge in demand as people cooked and baked more at home. As web searches for phrases like "easy quarantine recipes" spiked, the company cranked out cooking videos and posted them on sites such as Instagram. Sales of vanilla extract soared. "This has been a year of disruption beyond our wildest dreams," said Jill Pratt, marketing chief at McCormick, which posted a 8% sales increase in the third quarter.
Progressive's chief marketing officer, Jeff Charney, laid out a road map in April to help guide the company during the pandemic, so that its ads would track Americans' collective mood as the crisis unfolded and evolved. The road map suggested there would be several stages in the U.S.
"Relief": When people are looking for comfort and want to hear what companies are doing for their employees, customers and communities.
"Release": When people are looking for a break from thinking about the pandemic constantly.
"Recovery": When restrictions are loosening and people want to gradually get back to their lives.
The possibility of a second wave of coronavirus cases led Mr. Charney to add another stage called "Relapse."
To come up with the road map, Mr. Charney looked back on how consumers and businesses weathered past crises such as the Sept. 11th terrorist attacks and studied data such as consumer sentiment, economic activity and consumer purchasing behavior. Arnold, Progressive's ad agency, conducted a weekly poll of 1,000 consumers that asked a range of questions. Mr. Charney also sought advice from Progressive's chief medical officer and chief economist.
What Progressive discovered is that it isn't always obvious which stage the country is in, and it varies by geography. "It's like you're changing the engine as you're riding your race car. There was no pit stop," Mr. Charney said.
Uncertainty about the pandemic colored most advertising decisions. Progressive sketched out over a half dozen ideas for its National Football League campaigns, for example, before settling on one involving Cleveland Browns quarterback Baker Mayfield, as the company sought to account for whether the 2020-2021 season might be suspended or canceled.
There was a debate within Progressive over how much to spend on marketing. Some executives said advertising was an unwise investment at a time when people weren't driving as much, much less shopping for car insurance.
Mr. Charney resisted the push to cut spending. "You want to stay top of mind -- you don't want people to see an ad from your rival and decide to give them a shot," Mr. Charney said.
The insurance industry's marketing wars are brutal, with some $8.2 billion spent on U.S. ads in 2019, according to ad-tracker Kantar. Flo, the wacky character who wanders into homes and yards in an all-white get-up to pitch Progressive's plans, goes up against the likes of Geico's smart-alecky Gecko and Liberty Mutual's Emu, a tall and unusual bird named LiMu. Progressive is among the top property-casualty insurers.
Progressive, based in Mayfield Village, Ohio, spent $1.8 billion last year on advertising expenditures and is among the top 10 ad spenders in the country. It is expected to spend close to $2 billion on ad efforts this year, despite the crisis, according to an executive familiar with the company's marketing plans.
Progressive bet that the declines in shopping for car insurance were temporary. It also benefited from fewer drivers on the road because it had to pay out fewer claims. "They were largely successful" in increasing market share, Piper Sandler analyst Paul Newsome said of Progressive.
The company replaced Berkshire Hathaway's Geico as the No. 2 U.S. private auto insurance provider for the second quarter, according to S&P Global Market Intelligence.
Many marketers treaded lightly in the pandemic's early stages, wary of looking as if they were exploiting the crisis. Moreover, research showed that consumers wanted brands to do more to help people and employees affected by the pandemic. Anheuser-Busch included a charity component in most of its ad campaigns. The professional athletes who participated in the videogame tournament on Twitch won a donation to a charity of their choice. An online workout video series, which it created and aired on sites such as YouTube, promoted its Michelob Ultra beer and raised money for trainers and gym owners who were hurt by the pandemic.
As part of its "Relief" stage, Progressive aired an ad called "Apron" that featured a montage of people putting on aprons. "What does an apron have to do with insurance? An apron is protection, an apron is not quitting until you've helped make something better," the voice over intoned. The spot announced a program that provided credits on car insurance premiums, since people were driving less. Progressive CEO Tricia Griffith narrated it.
By mid-April, Mr. Charney felt the nation was ready to move beyond the "Relief" phase. A self-described news junkie, he has studied patterns in how people respond to traumatic historical events. He recalled the first sporting event to take place in New York after the Sept. 11, 2001 terrorist attacks. On Sept. 21, 2001, the New York Mets defeated the Atlanta Braves with a game-winning home run by Mike Piazza. "People were ready for sports, they needed a release," said Mr. Charney.
Similarly, as the pandemic stretched on, Mr. Charney noticed the heavy media buzz around "Tiger King," a documentary series on Netflix about the life of zookeeper Joe Exotic. He took it as a sign that people were ready to escape pandemic life. Polling data, gathered by Progressive's ad agency Arnold, revealed that 63% of U.S. consumers believed brands could bring some much-needed humor to people during a tough time.
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