Glitzy ads are out, and cheap promos are in

April 30, 2020

April 30, 2020
The Hustle

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Tricky Territory

Pandemic advertising is getting freaky

You probably won’t be shacking up in a hotel anytime soon. But that hasn’t stopped from churning out ads that feature its nautical pitchman washing his hands and urging customers to socially distance.

Why? According to one theory, the companies that advertise the most during an economic downturn do the best when the job market bounces back. 

Right now, there’s a $10B+ hole in the television ad market. Big spenders like Airbnb are halting their marketing, and the cost of digital ads has dropped by at least ⅓ .

Those companies still tossing their products into the ring are facing an impossible question: How do you advertise when customers are so unlikely to buy? 

Ads have never faced this many pitfalls 

Does your pre-pandemic ad feature people hugging or shaking hands? That’s a no go. Too many jokes? You just look out of touch. 

Where does that leave you? Sounding like everyone else. 

A now-ubiquitous form of pandemic advertising features somber music, phrases like “in this uncertain time,” and an uplifting round of applause at the end.

Everyone is reevaluating: Lifestyle influencers, confined to their backyards, don’t know how to promote products right now. There’s a PR hotline for publicists struggling to pitch journalists respectfully.

Elsewhere in the ad world, a separate crisis is brewing: Those fancy Mercedes-Benz ad shoots? Canceled.

As the pandemic rages on, ads will soon feature fewer sleek road shots and more drone footage and animation — those are the cheapest promos to cut from home.

Everybody’s ‘Zoom ready’

Take the beauty industry: It’s dumping smoky eyeliner in favor of more subtle skin- and eye-care products that look best on video chat. Revlon, for instance, offers to help you curl your lashes “even if you can’t curl up to your special someone.”

The Atlantic dubbed this the era of “disastertising,” and it looks a bit like this: 

  • Burger King wants you to become a Couch Potatriot in service of social distancing.
  • Pepsi committed $3m to restaurant workers during John Krasinski’s “Some Good News” YouTube series.
  • Crocs donated 10k+ of its iconic clogs to healthcare workers, then paid Priyanka Chopra to post about it.
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Tweet of the Day

Ours too, honestly — and the video is even better. Reminder: if you need a little joy, #bringthezootoyou is a fountain of fun.

Count Us In

A New Deal for French fries

All across Belgium, patriotic citizens are stepping up to serve their country in the only way they know how. For the good of the economy, they’re committing to eating more frites. 

The Belgian potato industry is looking pomme de terrible right now. Demand for frites is plummeting, in part because many of the moments when they’re usually eaten — after a festival, following a drunken night on the town — have become ancient history.

The country is facing 750k+ tons of leftover potatoes. But rather than throw up its hands, the Belgian government is urging citizens to consume frites twice a week — all in an effort to save the farmers and the spuds.

Ask not what your food waste can do for you…

Supply chain disruptions have made excess food a global scourge. More and more, your patriotic duty is going to involve shoveling down the national leftovers.

Trade groups in France are begging citizens to eat more fromage as international exports of the cheese collapse. The National Review last week urged us to “Eat More Potatoes, America.” 

And New Zealanders are bingeing burgers at such a fast clip that local authorities are implementing crowd control measures at fast food restaurants.

To be clear, New Zealanders don’t have a burger surplus. They just really want burgers now that the lockdown there has been eased. 

Welcome to the era of agro-patriotism

To fight the national food surpluses, growers have already started to unload their wares on food banks. 

A string of Bay Area food banks were well-rewarded for their service: Cattle farmers this week sent them an infusion of $2m worth of premium Wagyu beef. But food banks can only store so much meat at a time. 

Just as Americans on the homefront stopped eating bread for the good of soldiers during WWII, you might soon have to stuff yourself with chicken wings… you know, for your country.

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Freeze, Then Sprees

‘Revenge spending’ may sound like fun, but is it really a lifeline for luxury brands?

Everyone who’s stuck in isolation has probably quaran-dreamed about the places we’ll go and the things we’ll buy when we can finally leave our houses.

This month, we got an eye-popping preview in China. High rollers reportedly went straight to buying expensive handbags (and high-priced homes).

A Hermes outpost in Guangzhou raked in $2.7m on April 11, its first day of reopening.

Retail revenge is a dish best served gold

Nikkei and others have called the Hermes-plosion an example of “revenge spending” — when cooped-up shoppers can spend in person again, the theory goes, mall madness ensues.

“Revenge spending” conjures images of a jilted lover blowing money to get back at a spendthrift ex (I see your motorcycle, and I raise you a boat!). 

But Quartz noted that the term carries a more specific meaning in China. It’s been used to describe the spending boom that followed the end of the Cultural Revolution in 1976.

These days, luxury brands are hoping for a turnaround when we elbow bump goodbye to the coronavirus. LVMH, the parent company of Louis Vuitton, reported “very substantial” growth for its main brands in China this month.

The Asian nation is a growth market for the most opulent form of retail therapy — it generated ~90% of the growth in the global luxury market last year, according to the consultants at Bain & Co.

But nothing gold can stay

A Bloomberg columnist predicted that the luxury boom is going to lose its luster. 

If wealthy Chinese shoppers are buying big-ticket items now, it’s not so much a cure for cabin fever as it is a consequence of travel restrictions. People are looking for that Birkin bag closer to home instead of abroad.

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What if Kim Kardashian helped launch your DTC brand?

Along with a handful of other A-list celebrities.

Pretty sweet way to kick off an eCommerce brand launch, huh?

Here’s how this guy launched brands like Haus, Hint, and Judy

On this week’s episode of our Exit Strategy podcast, Moiz sits down with DTC wunderkind, Nik Sharma. They talk about:

  • How Nik’s team got Kim Kardashian to endorse a new brand, Judy
  • What DTC brands should be doing to survive coronavirus 
  • All the products and agencies Nik has used to build brands like Haus, Hint and Judy
  • The biggest opportunities left in DTC

🎧 Listen to Exit Strategy here: Apple / Spotify / Castro 🎧

Listen here →
Game Theory

Animal Crossing’s stalk market is the only economic indicator you need right now

Big news from Fed Chairman Tom Nook: Last week, the Bank of Nook announced that it planned to slash interest rates in Animal Crossing: New Horizons from .5% to .05%.

Animal Crossing’s 12m players were left scrambling. As one Redditor — channeling the meme-ified words of Joe Exotic — put it: “I’m never going to financially recover from this.”

Yes, Tom Nook is a raccoon, and yes, he runs the main store in the game’s pastel-hued central village, but Nook’s interest rates are a big deal in the Nintendo Switch universe. 

Nook controls the game’s main currency — bells — and just like so much else in Animal Crossing, his financial decisions are mirroring our own reality. 

The real Fed said Wednesday that US interest rates would remain near zero “until it is confident that the economy has weathered recent events.”

Forget gold: Maybe it’s time to stalkpile turnips

There are 2 main commodities in Animal Crossing: tarantulas and turnips. Tarantula farming is a nice scheme, but the real speculation is happening on the stalk market — the pricing system for homegrown turnips, overseen by an orange boar named Daisy Mae.

Sell your turnips at the right time, and you’ll be ringing in scores of bells. Wait too long, and they all rot. 

The twists and turns of the fictional market have captivated real-life media outlets. 

News stories have attempted to uproot the secrets of turnip pricing, and the crowd-sourced Turnip Calculator is guiding people through downturns.

New Horizons is giving the financial sector a run for its bells

But then again, the Animal Crossing economy is not a perfect mirror of our own.

As the Financial Times reported, Chairman Nook cut interest rates for different reasons than America’s financial overlords — basically, Nook was trying to crack down on time-traveling speculators who were trying to rig the banking system (long story).

But in some ways, the Nookverse has us beat. In Animal Crossing, mortgages are interest-free, and transportation to and from the game’s patchwork of islands is subsidized for the poorest users.

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📱Here’s to small victories. Apple is releasing an update that will make it easier to unlock your iPhone while wearing a mask.

🎾 The ultimate pandemic pro-am? The Williams sisters will compete with other tennis stars and celebrities in a Mario Tennis Aces tournament.

📹 We weren’t kidding when we said everyone wants to be Zoom. Google just made its Zoom competitor, Meet, free for everybody with a Google account.

🥨 The enduring appeal of the processed snack.

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