How execs are handling a crisis with no playbook

Agency leaders have dealt with recessions and uncertainty in their clients' business before. Why they think this time is different.
lycs-architecture-U2BI3GMnSSE-unsplash

The COVID-19 pandemic isn’t the first crisis that some top advertising and marketing executives have had to navigate through.

But due to this crisis’ volatile and ever-changing nature – which has upended daily agency operations, in-person client meetings, RFPs and campaign launches – these are extraordinary and unfamiliar circumstances.

Jack Bensimon – founder and president of Toronto-based agency Bensimon Byrne – has led his agency through some tumultuous points, such as the 2003 SARS epidemic and the 2008 global financial crisis.

“I want to be completely frank with you, I don’t think this is a comparable situation,” Bensimon tells strategy, saying this is “uncharted territory” and the first true global pandemic since the 1918 Spanish Flu, where an estimated 500 million people became infected with the virus.

As startling as the 2008 global financial crisis was, Bensimon says there was a quickly developed sense that people just have to get through it and that the world will eventually return back to a normal economic cycle.

“The challenge with what we’re facing right now is, I think there is no playbook for it,” he says. “That’s going to be something that we’re writing in real time as we, day-by-day, start to understand the full scope of what we’re facing. I’m reluctant to suggest that there is a standard playbook for marketing in a recession that we can simply dust off the shelves and learn lessons from [in] the past.”

Bensimon describes the 2008 global financial crisis as a “crisis of liquidity in the markets,” but the economic impact of this pandemic is different, as “the basic functioning of life” – such as shopping, eating out and producing ads – have been paused or disrupted. “All of those things carried on throughout the global financial crisis,” he says.

Aldo Cundari, chairman and CEO of Cundari, says recessions of the past were periods of “restraint and focus,” he says. But this crisis has the added wrinkle of social distancing, and managing a large organization, remotely, in an industry that is inherently collaborative can be difficult, Cundari notes.

Cundari adds that a lot of media “has been pulled” by some of his clients – a similar sentiment he has heard from other agency heads. “One of the big problems is what we do with all that media. A lot of the media groups are not returning funds or allowing cancellations. There’s just layers of layers of issues this time around,” Cundari says.

Frank Palmer, former CEO and chairman of DDB Canada and current partner at Elevator Strategies says despite the dire situation, ad agencies must remain calm “because we’re supposed to be professional counsellors to our clients” and advise them on what they need to do and should do.

“We have to be almost like doctors of communication, in order to make sure that these companies don’t panic and do the wrong thing,” Palmer tells strategy, adding that is something leaders need to do for their agencies as well. “We have to be a beacon of strength.”

Bensimon says his agency is still in the early stages of crisis management and that it’s “difficult to draw conclusions” from week-to-week. He adds that every one of Bensimon Byrne’s clients is “going through some adjustment” to what they thought they’d be doing, such as having to close stores or maintain access to customers through digital channels. He says society hasn’t reached the point where a shutdown has been in place for an extended period of time, which is when hard decisions will have to be made.

“‘If I don’t have revenue, what do I do to try and stimulate it?,’ or ‘Am I forced to put every other business expense on pause while I wait and see what happens?’ Each agency has to look at its roster of clients and figure out how that client industry is going to be affected.”

Cundari says one of the things his agency is in the process of doing for its clients is developing a brand recovery strategy. “I think one of the things agencies should do today is look towards the future and say, ‘ok, we can’t fix what are the issues today. But what we can do is look at how to be the advisers on fixing the brand as its recovering out of the cycle.”

Lessons of past adverse situations have taught Cundari the importance of planning.

“Things may just trigger as the crisis sort of comes to an end in two or three weeks. But we don’t know what that outcome is. So, planning for it, and planning scenarios, are probably the biggest things that I could recommend to anybody.”

On Wednesday morning, Prime Minister Justin Trudeau announced an $82-billion aid package to assist Canadians and companies, consisting of income supports for those that have been laid off or are unable to work, tax deferrals and wage subsidies. There will be $27 billion in direct supports, and $55 billion to aid business liquidity through tax deferrals, the CBC notes.

Bensimon says some of that government relief may need to come to ad agencies as well.

“The ad industry is no different than any other industry,” he says. “I think that what we’re looking for is a signal from our government leaders as to whether or not…we’ll be insured in some way to maintain operations, even as the economy grinds to a halt. Or if we should adjust to a much lower level of economic activity and shrink our businesses in response to that, and then let the government take care of everybody that’s out of work.”

Cundari seems confident that his agency won’t have any layoffs or firings, as maintaining long-standing employees will be important to his agency’s long-term health. Palmer, on the other hand, says Elevator will “be taking a good hard look” at aspects such as part-time and contract staff, and possibly re-evaluating paying them for an eight hour day, if they are only working three, for instance.  “If you want to stay around and stay in business, and operate the way you were before this virus came out, chances are you won’t be in business. You have to be upfront and tell the staff what’s right and what we’re doing about it. Unfortunately, [they] might not like it, but this is what we’re doing to protect them as well as our company to stay healthy in moving forward.”

Palmer adds how he’s talked to a number of agencies that are laying off staff because they’re uncertain about their revenue situation during this time.

“Hopefully, when we get through this, we’ll be much better prepared…because if you had an earthquake, and you weren’t prepared for it, then you better be damn prepared for it to happen again, because it will,” he says.