So last night, Laura and I had cable TV on for about thirty minutes…📺
Which is unusual, as normally the only time we watch “live” TV is for sports.🏈
And given that there are no sports happening right now…
It means no “live TV” for us either. 🤷♂
Instead, we’re mostly streaming stuff…
Which is, of course, behavior that’s pretty reflective of how society has trended in general.
Anyways…
It was the first time I’d watched normal TV since COVID-19 started.😷
And, I’ve got to tell you…
I was pretty blown away by the commercials.
First of all, I was seeing ads for some companies and brands who I hadn’t seen advertising before in my lifetime…
I’m talking random, legacy cracker brands.
Companies that sell bulk bags of rice…
Stuff like that.
Now yes, this was on the Food Network…
But even in the past, I never saw these brands advertising on this channel…
And my assumption is that there are two reasons why they’re advertising now:
1. Their products are cheap and affordable.
During the Great Depression and the Great Recession, turns out people still ate. And they still shopped. They just switched to cheaper, more comfort-based products and brands. Campbell’s soup was basically made during the Great Depression. And with what’s going on now, staple foods are in a good position to increase sales.
2. Advertising right now is a really good way to capture market share.
One of the brands I saw advertising last night was for Club Crackers by Keebler. That’s right, Keebler. Have you thought of Keebler in a while? I sure as hell hadn’t. But right now, Club Crackers are the 12th most popular cracker in America. They’re also pretty cheap, and people are going to buy more crackers during times of massive economic hardship (aka point #1).
TV Advertising Inventory is also way cheaper right now. So if you’re Keebler, this is the perfect time to go harder on your advertising, especially when your competitors are pulling back. Right now they have an unprecedented opportunity to increase their market share — and position — dramatically.
During the Great Depression, this same strategy made certain businesses massive fortunes. Camel skyrocketed from obscurity to replace Lucky as the #1 cigarette brand in America through this strategy. Kellogg’s upended the long-term incumbent Post and became America’s number one cereal brand by doing this. GM made a profit every single year of the Great Depression, while Ford floundered and lost market share (in part thanks to advertising).
Now, a second reason I was blown away by the ads I saw last night…
Is because virtually every single one of them talked about “times like these,” “difficult times,” “trying times,” etc.
Which makes sense…
They’re using the same strategy that Justin and I have been preaching to eComm businesses since this all started…
Which that you should shift your messaging, and your offer, to match what’s currently going on.
One really good example I saw of this last night was from Lexus…
Their ad focused on how when you buy a Lexus, you’re part of their family…
But the big call to action of the ad…
Wasn’t to buy a Lexus…
It was to remember to get your existing Lexus serviced.
And they pointed out how they can help you do that while staying safe and limiting human contact.
It’s because Lexus realizes that this isn’t a time where most people are buying new cars in general…
And, for those who are buying a new car…
They’re probably less focused on getting a luxury vehicle, and a lot more focused on getting something that’s practical and economical.
As a result, Lexus’s thinking is:
“Let’s not even bother trying to sell new cars right now…
Instead, let’s focus on increasing the number of people who get their existing cars serviced…”
Since historically, service and maintenance has been one of the largest profit centers for auto dealers.
I should point out that Lexus isn’t the only luxury car company following this strategy either.
I own two Porsches (#blessed blah blah)…
And I’ve been getting hounded by the local dealership’s service department over the last month…
They’re sending me direct mail, emailing, even calling…
And the message is the same every time:
I should take my cars in to get them serviced.
It’s a little annoying at times, but it makes perfect sense…
Because, let’s be honest…
This is not a time where most people are rushing to the dealership to buy a Porsche.
So the dealership’s strategy, and their offer, has shifted.
And even going back to GM during the Great Depression…
One of the reasons they were able to be profitable every single year…
Is because they recognized what was happening very early on.
They cut production on their high end, luxury models almost immediately…
And focused instead on their more economical models…
While their rival, Ford, took a much longer time to figure it out…
And lost a ton of cash.
—
Interesting stuff, right?
It’s crazy what kind of macro-insights you can gain from watching a few minutes of cable TV…
And I’m glad I did it.
Because it really got my wheels turning.
And I wanted to share my thoughts with you.
Hope you gained some insight from this too!
– SPG
P.S. This post originally came from an email I sent to my private list. If you want to see more stuff like this from me, you can apply to join my list using this link.