How Executives Kept Their Marketing Going Amid Pandemic-Driven Budget Cuts

In survival mode, retail and restaurant chains had to do more with less

executives from Wendy's, ThirdLove, Getty Images, Purple Innovations
We asked executives from Wendy's, ThirdLove, Getty Images and Purple Innovations how they adapted to the coronavirus crisis. Wendy's, ThirdLove, Getty Images, Purple Innovations
Headshot of Richard Collings

Key insights:

When the Covid-19 pandemic arrived in the U.S. in March, retail and restaurant chains quickly went into survival mode.

Physical storefronts were largely shuttered for nonessential services, which meant many consumer-facing companies would burn through piles of cash on rent and mortgages to stay afloat as revenues and profits took a hit. With that, marketers were forced to slash or reallocate their marketing spend in order to preserve cash.

“It certainly has been an interesting time for marketers in the middle of a global pandemic, and a challenging economic environment for our customers,” said Carl Loredo, CMO of Wendy’s.

For businesses, changes came quickly and didn’t stop, said Burke Morley, vp of brand and executive creative director at mattress maker Purple. He said the executive team initially met twice every day, in the morning and then again at night.

“The strategy could change from morning to afternoon,” Morley said.

Preparing for all situations was necessary. Heidi Zak, co-founder and CEO of DTC intimates brand ThirdLove, said the team modeled their worst-case scenario, and then behaved as though that was the trajectory of the business going forward.

“Anyone who is running a company has multiple scenarios,” Zak said. “We were pretty aggressive in cost-cutting so that we would survive and thrive given worst case.”

Wendy’s, ThirdLove and Purple Mattress were hardly alone.

“We’re all in the same boat,” said Natasha Fishman, evp of marketing at Authentic Brands Group, commenting on her and other companies’ efforts to save money and making do with less.

Even still, Fishman said the company “didn’t take the pedal off advertising and marketing.” Instead, with less money to spend, marketing executives had to be more nimble than ever to connect with consumers.

That approach often led brands to rely more heavily on in-house marketing teams, repurposing existing content to create new ads, guiding influencer networks to generate additional messaging, and shifting more dollars to digital channels such as direct email while delaying outreach on more traditional channels such as linear TV.

Wendy’s focuses on promotions and gaming platforms

For Wendy’s, traditional marketing took a backseat in the early days of the pandemic. To cut costs, Loredo moved previously planned spending to a future time period when customers would be more receptive, and sought alternative channels for communications and messaging.

The change in strategy, despite the need to save where it could, underlined that marketing—in new and innovative forms, in particular—was and is still crucial in these times.

“My focus now is in ensuring every dime spent is as powerful, relevant and meaningful as it can be,” he said. “Knowing the vast impact of the pandemic on our consumers’ lives, we needed to adjust to their evolving landscape and be there for them.”

He cited GroupNug, a four-piece chicken nugget giveaway orchestrated by Wendy’s on April 24, and working with gaming platform Twitch as some of the ways the fast food brand has kept pace with its customers.

“We’re being really thoughtful about how we can provide more value to our fans through things like gaming content, menu offerings and promotions,” he said.

He said Wendy’s “scrappy mentality” when it comes to marketing positioned it well to weather the impact of the coronavirus.

“The good news for Wendy’s is we entered the pandemic from a position of strength,” he said. “We had significant momentum in our business coming into this, with healthy global same-restaurant sales growth and a very strong launch of our breakfast daypart in the U.S. which we saw global same-restaurant sales up 15% in launch week.

“The past couple of months have forced us to be even more nimble on a consistent basis,” Loredo said.

Authentic Brands turns to its influencer network Winston

As the pandemic began and shifts became necessary, Authentic Brands, the parent company of retail labels such as Forever 21 and Vince Camuto, saw much of its marketing dollars retargeted toward social, Fishman said.

The benefit of digital in most cases is that a brand can more swiftly measure ROAS (return on ad spend) and dial up or down depending on what is performing best, she explained. With channels such as billboards or linear television, once a company has made a commitment, it’s locked in regardless of immediate performance.

For example, the brand management firm had planned TV advertising for Father’s Day, but shifted its marketing mix to ecommerce instead.

“We didn’t walk away from prospecting,” she said, with both email marketing and paid advertising on social media channels performing strongly.

The company also turned to its influencer network Winston, a community created by Authentic Brands to create the kind of authentic organic content that resonates with consumers.

“We really turned on that community to drive that narrative,” Fishman said. “The relationship we built there over time has been a real payoff.”

ThirdLove finds success on LinkedIn

ThirdLove may have prepared for the worst case scenario, but the reality turned out to not be quite so dire. After a decrease in sales in March, revenue stabilized in April and May, and the company is now returning to growth all while running the business profitably, Zak said.

In those early days, however, when there was a great deal of uncertainty, linear television was the first area where ThirdLove cut back. This wasn’t because of lack of faith in the category, but rather the uncertainty of the future.

“It was too risky to commit to it for three to four months out,” she said.

That meant focusing dollars on where the brand would get the biggest bang for its buck, which meant switching to other platforms.

To ThirdLove’s surprise, one of the most efficient social media platforms was LinkedIn, Zak said, as well as Pinterest. More people are spending more time on LinkedIn in light of the economic turmoil, she noted, while the performance of Facebook and Instagram has been more volatile.

In terms of producing content, although ThirdLove did a socially distanced shoot last month, like many of the brands Adweek spoke to, marketing during the pandemic was really about leveraging content already created.

“We have thousands and thousands of hours of video content,” Zak said.

So the company leveraged its internal team to recut that video to produce messaging that was applicable to sheltering in place, she said.

And rather than brand-building, ThirdLove has centered its marketing on specific products such as its pima cotton underwear.

“It’s just really understanding what’s going to be most relatable,” she said.

Purple drives conversation with seat cushions

Purple, also in survival mode, backed off production and furloughed employees (largely in manufacturing). The company experienced an immediate dip in wholesale, Morley said. But after consumers began to order Purple’s products online, the company realized that it had a new problem—a good one. Demand wasn’t going down, but up.

After initially slowing down manufacturing, the company ramped up production to the point where it not only brought back furloughed workers, it was even hiring. An increase in marketing spend soon followed, as the mattress brand believed it was in a position to take market share.

Just as important, Purple set aside efforts around increasing the brand’s halo in favor of a more tactical strategy around pushing particular products to drive sales near-term, he said.

It rolled out a planned advertising campaign and tweaked its website to achieve a higher conversion rate, such as featuring products like seat cushions that had taken a back seat to the mattresses.

As a result, seat cushion sales increased about 700%, Morley said.

Seat cushions aside, Morley noted that the strongest brands already have at least some halo effect that will carry them through even the toughest of times. It’s important, he said, to be “very clear as to who you are as a brand, why they should care about you and how you benefit them.”

“When tough times hit,” Morley added, “it’s too late to hear that story.”

@RichCollings Richard Collings is a retail reporter at Adweek.