Post-Covid19: Changes in marketing trends

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Post-Covid19: Changes in marketing trends Aslockdownsstarttoeaseandthescaleoftheeconomicchallengebecomesclear,uneasybusinessesareadjustingtoafuturewhichislookingdecidedlydifferentfromtheonetheyhadplannedforatthestartof2020.​Sixlongmonthsaftermuchoftheworldwentintoquarantineorlockdown,brandsarecomingtotermswithahardtruth:the‘newnormal’is–perhapsironically–goingtobeprolongedperiodofuncertainty.ThesecondwaveofCOVID-19isnowcrestinginmuchoftheWesternworld,areturntolockdownseemsimminent,andbusinessesaregearingupforalonganddifficultrecession.Butdespitetheupheavaldefiningthismostdifficultyear,brandsarecontinuingtotransforminreal-timeandlaythefoundationsforfuturegrowth(wheneverthatmaybe).Aseconomicrecessionsetsin, here’s how brands are navigating a new stage of the pandemic.ThispaperfocusesonthekeychangesinthemarketingtrendsaseconomicrecessionsetsinandhowCOVID-19isaffectingtheadvertisingindustry.IwillfirstlistandexplainmajortrendsthatCOVID-19hasbroughttomarketingandhowbrandsarenavigatinganewstageofthepandemic.Then,Iwillmoveontodiscussingthechangesinconsumerbehaviortoprovideathoroughexplanationonhowthetrendshavebeenaffectingtheadvertisingindustry.Finally,Iwillprovidemypersonalthoughtsandprojections on the topic.1. Brands are slashing advertising spend for 2020WhatwashintedatinApril’sad-spendnumbersisnowcrystal-clear:​brandsarepullingadvertisingspenden-masse, to the tune of a huge $50 billion globally in 2020.​, an 8.1% plunge from 2019.WARC’slatestGlobalAdTrendsreport,whichreforecaststhe2020ad-spendoutlookbycategory,paintsagrimpicture:​almostallproductcategorieswillrecordadeclineinadinvestmentthisyear​.Themostseverefallswillberecordedintravel&tourism(-31.2%),leisure&entertainment(-28.7%),financialservices (-18.2%), retail (-15.2%) and automotive (-11.4%).Forsomebrands,thesecutsareduetolockdownrestrictionsbarringoperation(leisureandentertainment)ornear-totalrevenuecollapse(travel).Otherbrandsarepullingspendfornow,choosingtokeeptheir

Post-Covid19: Changes in marketing trendspowderdryamiduncertaintyabouttheeconomicrecession(financialservices,someretail).Othersarebattling for survival and have simply no choice but to cut spend​, in some cases for up to 12 months.Thoughbestpracticeindicatesthat​brandsshouldcontinuetospendthroughdifficulttimesinordertopositionthemselvesforrecoverywhenconsumersstartspendingagain,theCOVID-19recessionisforcingbrandstomakeextremelydifficultchoices.InthewordsofLesBinet​inarecentexclusivearticleforWARC​:“thisismorelikeawarthanarecession.”WARC’sGlobalAdTrendsindicatesthattraditionalmediawillbehardesthit,andfarefarworsethanonline.Investmentissettofallby16.3%–$51.4bn–thisyear,withdeclinesrecordedacrosscinema(-31.6%),OOH(-21.7%),print(-20.1%),radio(-16.2%) and TV (-13.8%).2. The role of the CMO rises againMuchinkhasbeenspilledinrecentyearsabouttheChiefMarketingOfficerrolediminishinginimportance.Severalglobalbrandshaveevolvedtherole(thinkChiefDigitalOfficer,ChiefExperienceOfficer,ChiefMarketDevelopmentOfficer…)orevendisestablisheditentirely.Seniormarketershaveoftenlamentedthechallengeof​gettingmoreinvestmentinmarketingactivityfromtheCsuite​.Indeed,it’softenthefirstdepartmenttohaveitsbudgetclashedinchallengingtimes.But2020isachallengeunlike any before.AstheCOVID-19crisisshowslittlesignoflettingup,marketinghasemergedasthenervecentreofabrand’spandemicresponse.Withaneedforflexibilityandstronginternalrelationshipstonavigatechangingcircumstances,theC-suiteis​fastrealisingthecrucialrolethatmarketersplayinconnectingvariouspartsofanybusiness,andespeciallyinmanagingtherelationshipwithconsumers.Fromshopperinsightsandbrandpositioning,toe-commerceandcrisiscommunications,themarketingteamisdelivering heightened value during COVID-19. The role of the CMO has been wholly revitalised.SomeofthoselargebrandsthathaddoneawaywithCMOsinrecentyears–McDonalds,NatWestandTelstratonameafew–havereinstatedtherolethisyear.Expectmorebrandstoplaceanemphasis in marketing leadership in coming months.

Post-Covid19: Changes in marketing trends4. Condensing marketing processesWhiletheinitialstagesofthepandemicsawmanybrandsscramblingtoputoutnewadvertising(whichmostlydrewonsyrupymessagesabouttogetherness,backedbyagloomypianotrack),seniormarketingleadersarenowrealising​theimportanceofstructuringforamarathoneffort​,notasprint,especiallyinhighlyunpredictablebusinessconditions.DiegoScotti,CMOatUStelcoVerizon,notedinanexclusiveinterviewwithWARCthatcompanieswithastrong‘NorthStar’strategywillbebetterequipped to adapt to a volatile business climate.Severalmonthsin,companiesareequippingthemselvesforthelong-term:buildingreal-timedatadashboards,re-formulatingbrandstrategiesandslashinginternalredtapetomovefaster.Brandsaredoublingdownonfastconsumerinsights,lookingtodetermine​whichnewtrendsareheretostayandwhicharejustaflashinthepan​.In-housingcreativeormediahasbecome​apriorityforsomeastheyseekmoreflexibilityandcontrolatalowercost.Elsewhere,dailyscrummeetingsandbuilding​COVID-19readyclient-agencyrelationshipsbecomethenorm.AsMarieGulin-Merle,aseniormarketeratGooglenoted, ​the ability to react in real time​ will be an important skill for marketers going forward.5. E-commerce platforms are attracting investmentWhile​overalladspendwillbemuchlowerin2020thanlastyearasaresultofCOVID-19,brandswiththebudgetstodosoarelookingtowarde-commerceasamajoradvertisingopportunity.E-commercesitesare​increasinglyservingasadvertisingplatforms​,andfulfilasimilarpurposeasin-storemessaginginbrick-and-mortaroutlets.Brandswillspend$59bnone-commerceadsthisyear,​accordingtoWARC’slatestGlobalAdvertisingTrendsreport​.Investmentissettoincrease18.3%worldwide,growing 30x faster than the wider online ad market.Amazon–nowoneoftheworld’sleadingadvertisersinitsownright–​hasseenrecordgrowthinthefaceoftheCOVID-19outbreak,accordingtocompanyreports.Amazonanticipatesapermanentshiftinconsumerbehaviourstowardonlineshopping.Totalnetsalesreached$88.9bninQ22020,thehighest

Post-Covid19: Changes in marketing trendsleveleverrecorded.Thisisalsoayear-on-yearincreaseof40.2%($25.5bn),thesecond-quickestrateofgrowth ever.BrandsincludingProcter&Gamble,​MondelezandGSKareboostinginvestmentinthee-commercespaceasCOVID-19rollson.Forthosebrandswhohavethemoneytodoso,nowisthetimetoleaponthoseconsumerbehaviourchanges.Brandsshiftingintoe-commerce​shouldreviewthefundamentalsofproduct, packaging and price points​.6. A renewed focus on brand experienceExperienceisanincreasinglyimportantpartoflong-termbrandbuilding–WARC’sAdmapfromlate2019​focusesonthetopicin-depth–butCOVID-19hasupendedhowmanybrandsareapproachingit.Healthandsafetyhas​emergedasakeydifferentiatorofbrandexperienceintheCOVID-19era.Howabrandreactstothesenewconsumerexpectationscouldmakeorbreakit.Fromfullysanitisedhotelrooms,tobookableshoppingtimes​,toat-home​make-upexperiences​,brandsareadaptingtoofferconsumerspeaceofmind.Withhealthconsiderationsnowimpactingbrandsthatdon’tusuallymarketthemselvesinthatspace(thinkbricks-and-mortarretail,beautyorevenrentalcars),expecthealthandsafetymessagingand creative ‘at home’ engagement strategies to become even more prominent in the next six months.COVID-19 is changing consumer behaviour – and therefore advertisingWhereverconsumerbehaviourhasshifted,advertisingspendhasadjustedinresponse.Itmakeslittlesenseforadvertiserstospendonmediathathavenoaudience.Asconfinementmeasureswereintroducedaroundtheworld,out-of-homeandcinemaadvertisingshrankalmostinstantly;printadvertisingalsofell.Meanwhile,in-homemediausagewentup.TVviewershiphasclimbed,butdigital

Post-Covid19: Changes in marketing trendsconsumptionhasincreasedevenmore:useofsocialplatformsandstreamingserviceshaverisenalmosteverywhere;gaminghasalso​growndramatically​.Advertisershaveadaptedbyfollowingconsumers,whichmeansprioritizingdigitaladvertising.Theonlineenvironmentisfavourablefor“directresponse”campaigns–thoseencouragingquickpurchasesbyconsumers–anattractivepropositionforbrandsspendingcautiouslyandlookingtodrivesales.Inthefirstquarter,​FacebookandGooglesawbetterthananticipatedfirstquarterrevenues​.Doesthisimplythatdigital-firstmarketsarebetterpositionedtowithstandtheeffectsofthepandemic?InChina,whereconsumersspendalmosttwothirdsoftheirmediatimeonline,​Tencent’sdigitaladrevenuesinthefirstquarterincreasedby32%year-on-year​.Asthecountryreopens,itsadmarketis​predictedtogrowby8.4%–evenafterCOVID-19isaccountedfor,afigurestilllargerthanthe8%adgrowthforecastfortheUSpre-coronavirus.Uncertaintyaboutpeople’sspendingandconsumptionpatternsmakesithardtodetermineifChinaisatestcasefortherestoftheworld.AsBrianWieserexplains,“Onecouldarguethatmanyelementsofhumanbehaviouraregoingtochangepermanently.Theproductswewantcouldberadicallydifferentinthefuture–sodatathatwasused previously to inform advertising and marketing spend is not necessarily going to be useful.”OutsideChina,thereducedspendingbyadvertisershasaffectedprices.AccordingtoAlastairShearly-Sanders,PresidentofAmplifiatDentsuAegisNetwork,“Therehasbeenageneralsofteninginallpricingwiththesimpleeconomicsoflessmoney in the market, whether that is traded through auction or not.”Not all advertising is equalBrandsadvertisetoraiseawareness,increasesalesandbuildloyalty,usingmediaappropriatetoeachobjective.Ingeneral,small-andmedium-sizedenterprisesaremoredependentonchannelsthatdrivecustomerengagement.Globalbrands,ontheotherhand,runmultiplecampaigns,includingvalues-basedmarketingthatbuildsassociationwithconsumers’identities.

Post-Covid19: Changes in marketing trendsThepandemichascausedadvertisersofallsizestorethinkthetypeofcampaignstheyshouldrun.Formany,thismeansfocusingspending:inasurvey,​lifestyleadvertisersreportedthatacquiringcustomersisnowtheirpriority​,andotherconsumercategoriesarealso​adaptingtheirmarketingstrategies​.Media–suchasTV–thatworkwellforidentity-basedmarketingmaynotbethepriorityinthenear-term.Forothers,however,focusmeanschangingthemessage.IABdatashowsthat73%ofadvertisershavemodifiedordevelopednewassetssincethestartofthepandemic.Ofthese,overhalf(53%) are increasing messaging that emphasizes the mission of the company.Unilever,oneoftheworld’slargestadvertisingbuyers,isadaptingonbothfronts.AccordingtoConnyBraams,ChiefDigitalandMarketingOfficer,“Unileverisguidedbythreebeliefs:brandswithpurposegrow,companieswithpurposelastandpeoplewithpurposethrive.Thepandemicwillnotwaiverourcommitmenttopurpose-ledbusiness,norwillitchangehowwepositionourbrands.Morebroadly,wearewitnessingachangeinconsumerbehaviour.Weknowthatlifeinthetimeofcoronavirusisincreasinglyalifelivedonlinewhichhasledtoanaccelerationofdigitaladoptionande-commerce.Timespentwithcertainmediachannelshasincreasedduringlockdown,soweareadaptingtothesechanges,shiftingtoagreaterfocusonin-homechannelsversusout-of-home.”Thepowerofbrandstochoosewheretoadvertisemeansthatmediareliantonadvertising–oroverexposedtocertaincategories–maysuffer.​Analysisshowsthatallmediaareaffected,thoughforobviousreasons,travelandretailmediaareexperiencingtheworst.Digitalnewspublishershavebeenparticularlyimpacted.Brandsavoidingassociationswithcoronavirus-relatedcontentarewithdrawingspendandblockingkeywordsacrossprogrammaticchannelsonnewswebsites.​TheNewYorkTimesreporteda​fallof15%inadrevenueduringthefirstquarter​,andsmallerprovidersareequallyhardhit–oneestimatefromtheUKsuggeststhat​75%oflocalproviderscouldshutfollowing a drop in ad income​.