At the heart of COVID-19's impact on marketing and advertising is humanity. Marketers and consumers alike are facing concerns and uncertainty surrounding health, social, and economic stability with no immediate end in sight.
Naturally, ad budgets are shifting and so is the messaging. Advertisers must rapidly strike a balance between guarding their brands, whilst still running a sustainable business.
Global media spending has taken an immediate hit as a result of the pandemic – eMarketer has already reduced Chinese media spend predictions by some 6-7%. The revised Advertising Association/WARC forecast for UK advertising is down 16.7% to £21.13 bn.
I expect recovery will be gradual into 2021 as uncertainty, particularly in sectors such as hospitality, travel and physical retail, will remain for some time to come. We’re already getting to the new normal, and savvy brands should also start planning now for the next normal.
Here’s what we’re seeing:
Advertisers are scaling up spend in channels that align with consumer behaviour shifts and cutting costs where they are no longer relevant or appropriate.
E-commerce advertising is forecast to grow by 17.7% and social media spending to rise by 22.2%, while people seek answers on social media and their home goods needs via e-commerce channels. This provides an opportunity for lesser-known brands to get on the radar and for larger companies to build more sophisticated direct to consumer routes.
Thinking about how to integrate TV and mobile targeting and messaging would be a smart way to reach these potential new customers.
Consumers will increase time spent with social, TV (news and streaming), gaming, streaming platforms, online content and indoor entertainment in general. Many will be multi-screening as they work from home, say, with the TV on in the background.
Though addressable TV solutions are at different stages in different markets around the world, we expect to see more advertisers spending more money on these channels. IAB US data suggests that tactical changes to June this year will see 38% more advertisers use more audience targeting and Connected TV/OTT up by 35%; mobile device targeting up by some 34% and programmatic buying 29%.
After observing reduced competition and CPM decreases over the course of March in the United States, early indications suggest that these trends may now be levelling off, suggesting that advertisers are slowly creeping back to market as the pandemic curve begins to flatten. We expect this trend to be replicated in Europe and other mature markets.
These still depressed CPMs create an opportunity for brands that can afford to invest - buying media and audiences will be more cost-effective than before and win-rates within the auction will be higher due to lower competition.
Across digital, we are seeing both healthcare and education advertisers launch or renew campaigns, while several fast food restaurants have renewed with a new focus on home delivery messaging.
Campaign measurement and KPI expectations are likely to adapt to the market – shifting away from CPA or ROAS and looking at longer lifetime value or profitability-based metrics.
Many brands are pivoting from “come visit/shop/purchase/dine/join” messaging to a more human and health-focused message, some focused primarily on an evergreen branding strategy.
Advertisers are already doubling down on high traffic channels like the Amazon DSP, paid search, and social to follow consumer news and shopping trends. We will continue to see an uptick in contextual targeting strategies, being aware of where ads are running and against keywords that may have a negative impact.
Brand safety was already a hot topic but now is a time that brands need to really be taking control. More can and should be done:
Setting the targeting and brand safety controls within a DSP is done with varying degrees of diligence across the industry: ask your agency for access to accounts to check both the controls and optimisation rules being set.
Adapting keyword targeting lists is essential as not all corona-related content should be blocked: think of all the positive news stories out there - heroic tales of remarkable individuals such as the £30m-fundraising efforts of 100-year-old Captain Tom Moore, or how communities and families are adapting to this new normal.
It’s also a good time to review contract and data ownership - DSPs offer brands full access to their data and the change log so now is a good time to consider your own seat and commercials.
When sales surge and change unpredictably – such as during this pandemic – it severely reduces marketing agility.
Consumer behaviour is extreme right now - and unprecedented - so historical data will be less relevant. Running real-time control vs exposed groups and AB testing messaging in shorter periods to observe trends and optimise will be key for delivering in such uncertainty.
Programmatic offers the ultimate flexibility in being able to switch in and out new creative messages for different audiences so this is a huge advantage during this crisis, where messaging will change regularly.
Advertisers should focus on technology that enables true dynamic creative optimisation. This advantage can be leveraged further by expediting long turnaround times by feeding messaging performance data back to the creative team. Dashboards with both real-time data and democratised access are the best way to do so.
It is a good reminder to brands to over-invest in existing customers by not suppressing communications, but instead adapting messaging to reassure around staff welfare, precautionary measures and support for the community.
Our prediction is that digitisation will significantly accelerate during this period - brands will have a higher percentage of business transacted online and therefore look to digital marketing channels even more, so the long-term prognosis for digital and programmatic is positive.
These are extraordinary times - but those that take heed of these lessons now, who continue to invest in the right places, innovate and iterate, will be the long-term winners on the other side of coronavirus. Agility has never been more business-critical. Programmatic is agile by nature, but mindsets and business practices must also adapt - and fast.