In a crisis, how do you create effective Christmas advertising?

We’ve faced challenges and disruption in the past, but this year our country is dealing with the aftermath of Covid, as well as some of the most serious economic challenges in decades. Some of the characteristics that people associate with Christmas – warmth, extravagance and a bit of indulgence – are severely jeopardised for many.

Food prices in the UK are rising quickly. The ONS reported 14.6% annual food inflation in September 2022. Food inflation was -0.6% less than 18 months ago in July 2021, indicating food prices were falling. For much of the 2010s, food inflation was either very low or negative, so many people will be unaccustomed to the rapid rise in prices.

The financial impact of rising food prices is falling unequally, as food costs are a higher proportion (around 20%) of total income among the lowest income earners. Over a third of higher social grades are finding it ‘easy or very easy’ to afford the increased prices (37%), compared to just a quarter (26%) of more financially challenged households.

Economic outlook

Inflation is expected to dominate the UK economy through 2023. According to Pantheon Macroeconomics, inflation will peak at around 11% in November 2022, making Christmas shopping even more expensive, before falling back to 2% by the beginning of 2024. Prices will, of course, remain very high in 2024; they will just not rise as quickly as they are expected to in 2023.

The price of gas on international markets will be a key factor in inflation in 2023, as will the government’s plans for any energy cost caps. However, Pantheon’s analysts believe inflation will fall back into the low single digits in 2024.

Mood of the nation

Faced with these economic prospects, the mood in the UK is understandably gloomy. In a recent poll of UK adults, Ipsos found nearly nine in 10 people are concerned about the rising cost of living, and three quarters are worried about energy bills (and this survey was after the announcement of the household energy price cap, but before its subsequent curtailment in October).

Nearly seven in 10 people are worried about the value of their savings and investments, and a similar proportion (71%) expect the general economic conditions in the UK to get worse in the coming year.

Consumer spending plans

The crumpling of consumer confidence can be seen in consumers’ plans for Christmas – usually one of the most profitable times for retailers, when the public spend a great deal on gifts, travelling, food and drink.

This year, nearly six in 10 Britons say they are planning to spend less than usual at Christmas. Most people plan to spend less on gifts, with eight in 10 people saying they will reduce their budget for presents.

Around half of those polled (54%) say they will spend less on Christmas decorations and lights, going to Christmas parties (48%), and Christmas trips and holidays (48%). Clearly, the overall expenditure in the UK will be substantially reduced.

Spending on Christmas Day food and drink is less likely to be affected, but still a significant proportion of people are planning to make savings here, at 44% and 38%, respectively. Some people are even reporting they are spending their savings on food and household essentials, and 30% of people in the UK are expecting to sell some personal belongings to help them deal with the cost of living.

Of those polled by Ipsos, the great majority (85%) have already taken action to reduce their grocery costs. The most popular options are changing to cheaper brands and reducing discretionary spend.

Consumers are cutting back on their spending, which will clearly impact on brands’ sales and revenues. Consumers are also likely to delay bigger purchases, such as cars, holidays, technology and white goods, and – given the predictions for inflation – this is likely to extend into 2023.

What does this mean for Christmas advertising?

People are choosing cheaper brands, they are reducing their expenditure on non-essential items and they are delaying bigger purchases. What does this mean for brands?

Costs of doing business are increasing, so deep price cuts and promotions will be even more costly for brands, therefore they should look to emphasise value and maintain awareness.

And as Jon Harper, Ipsos’s brand health tracking leader, notes: “For larger purchases that may be delayed, consumers need to be reminded of their options regularly, and maintaining the longer-term brand building effects of advertising are really important here.”

In this environment, this year’s Christmas ads will need to demonstrate confidence, competence and compassion. These are the three features that as Ipsos’s head of creative excellence for the UK, Eleanor Thornton-Firkin, says are “just the sorts of sentiments that Ipsos has seen emerging as the key needs of people in a time of crisis”.

Commenting on the public mood, she says: “This Christmas, ads need creativity, and empathy, in line with people’s needs, desires and values – and sometimes that can mean having a laugh.”

For the past two years, Ipsos has tested Christmas ads using its CreativeSpark tool, to see what features are the most important. Here are the lessons learned about what will make for great Christmas advertising.

Can you have a new take on Christmas – or do we need all the Christmas clichés?

Yes, it is possible to have a new slant on Christmas, but it needs to reference the traditional and familiar, established through years of associations and brand building. In practice this means keep the snow and the jingle bells, and all the feel-good associations in among contemporary depictions of modern families and the lives they live today.

Ipsos’s measurements of Coca-Cola’s 2020 ad, ‘The Letter’, showed how distinctive assets, such as Coke’s traditional glass bottle and the Coca-Cola truck, could sit within a newer format, and provide traditional references to remind and reassure people of the brand’s enduring quality and value.

How can Christmas advertising in a crisis perform as well?

There is a difference between making an ad about the crisis, and an ad about how people are living and celebrating in a crisis. The ad should be about how to get through those times in the best way possible.

Ipsos tested Amazon’s ‘The Show Must Go On’ in 2020, which featured a ballet performance that had been cancelled owing to the Covid crisis.

The ad performed very well and demonstrated how its delivery service still works despite the restrictions of Covid. Amazon was 2020’s winner because it had emotion, it was entertaining, it had all the main drivers of engagement and memorability, along with joy and magic. It performed very well in both the US and UK.

The ads that were tested by Ipsos and performed best in 2020 and 2021 – Tesco, Amazon and Kohl’s – were in some way relating to the crisis at hand, while also delivering on the feel-good emotions that people craved.

They had drama and emotional storylines to provide excitement, romance, jeopardy, and they were moving and uplifting, but the drama didn’t overshadow the brand and its message.

Clear, consistent messaging beats complexity

One of the ads tested was a for a world-famous toy brand. It was two minutes long, with a lot of vignettes and countless characters. This was too much, consumers switched off and attention scores were lower as a result.

At times of crisis, people want comfort and to be reassured. In these circumstances, brand attention is at stake, so simplicity is key. Keep it shorter, simpler and make sure the brand is at the forefront.

Karen Fraser is senior director of brands and consumers, sustainability, trust and reputation at Ipsos.