Marketing has always been a full contact sport with winners and losers. For the most part, we're playing a zero sum game; when you win, your competitor loses and vice versa. Currently, the Darwinian parts of our marketing are even more magnified, and decision-making under this pressure is hard.
But to quote the famous Kipling poem:
"If you can keep your head when all about you are losing theirs... yours is the earth and everything that’s in it."
Given the human cost of this pandemic, it might sound trite to talk about opportunism, but away from the critical health issues, the reality in business is that opportunism is exactly what many of us should be thinking about right now. We can use this period to our advantage. We can embrace the challenges of weathering the short term and galvanising a brand for the long term.
There's no recipe for a recession like this, characterised by lack of supply and demand and caused by an enormous black swan event. But there are things that you should be keeping in mind as we go deeper into the second half of 2020.
1Buy the dip and invest ahead of the curve
Judging whether to advertise right now is more than an economic decision. The advice of marketing science needs to be tempered by the wider commercial, social and ethical realities.
"If you have the budget, the current situation is an incredible opportunity."
It’s hard to justify investment in advertising when many organisations are facing low demand or cash flow problems, and at worst are laying off staff or struggling to survive.
But if you have the budget, the current situation is an incredible opportunity. In investment, they refer to this as 'buying the dip' - buy when the market is fearful and take advantage of the bargains on offer.
That's the way we should be thinking, with the caveat of 'if budget is available'.
In a market downturn, there can be a tendency to play for immediate sales, but this should also be tempered with a broader focus on brand building over time. Advertising’s role is about both delivering sales today but also about priming people to buy tomorrow. If you have the budget, the move with the best long term return is to put money into brand building activity now and reap the benefits later.
Think of it as pre-emptive investment ahead of the curve, designed to put you in good position for a sharp rise in demand when people start to spend again.
2Evolve your media budget to reflect accelerated trends
This pandemic has acted as an accelerant for existing trends. The average person is being driven by circumstance to interact with, download, or buy from a digital service that they likely wouldn’t have otherwise. Research indicates that 1 in 3 of all online grocery shoppers since lockdown restrictions were introduced are new to online grocery. Household penetration for online groceries has grown by 3% points to 9.5% in April 2020, and the cocooning age group over-index for uptake of online shopping.
This will push businesses to speed up their digital transformation. So take the chance now to prepare your business for this. Analyse the weak points of your digital offering and take inspiration from recent examples of offline companies that have been forced to become creative with digital delivery services.
"Ask yourself if you have in-house expertise in tactics like Google shopping, Amazon search and maximising Facebook view through?"
It’s also likely that we will see the advertising oligopoly of Amazon, Facebook and Google harden as smaller publishers find it hard to remain viable. This trio has the cash not just to ride out the storm, but to actually invest and grow from it. So ask yourself if you have in-house expertise in tactics like Google shopping, Amazon search and maximising Facebook view through? Or can your agency help with these critical tactics?
Other media trends include the maturation of gaming as a media vehicle, with Twitch, YouTube and Steam all seeing upticks in viewership. Gaming is already bigger than cinema and music, but brands are still only starting to become aware of its potential.
There is also a general broadening of the social media landscape, with TikTok in particular becoming a breakout star, offering a brand new self serve advertising platform. This new opportunity is currently under-priced, unsaturated and ripe for targeting a hard-to-reach younger audience - 40% of those on TikTok aren’t on Facebook.
While not everything has changed, some important elements of consumer behaviour and media consumption definitely have. So be agile and adjust your strategy accordingly to reflect this.
3Seek out underpriced media opportunities to cheaply steal SOV
There’s also a huge amount of media value in the market at the moment. Those with deep pockets will deliver huge ROI by negotiating favourable rates and agreeing long-term deals now.
If you can afford to take the long view, cold strategic logic would indicate it’s beneficial to strike now when your competitors can’t.
Seize on underpriced media opportunities. Now is also an incredible time to invest in medium/long-term partnerships with quality, trusted, diverse publishers or news brands. If you negotiate intelligently, you'll be able to deliver tremendous value.
Share of voice is the brand’s share of the total communication expenditure in the category (i.e. share of the total investment made by all the players in the category). The basic tenet of SOV/SOM analysis is that share of voice correlates with your % share of market.
Given the current situation, overall advertising spend across markets will likely drop in 2020/2021, meaning incremental SOV will become slightly easier to deliver. This is an incredible opportunity if you have the cash to do so. The cost of SOV falls during a recession, and data from Peter Field from the last recession shows that brands who invested in SOV in 2008/9 derived huge gains.
4Take the opportunity to engage in the biggest ZBB experiment of all time
This is the biggest ‘zero based budgeting’ experiment in the history of marketing. In many categories, media spend has dropped to zero. This provides excellent, clean conditions and a controlled environment for testing what happens when we start to switch media back on.
Have you a hypothesis that search is driving a large proportion of your incremental online sales? Then test it.
Have you a hunch that TV isn't performing? Test that too.
Maybe you believe that a switch from a ‘traditional’ media mindset to a more connected approach that reflects your customer’s journey might be more effective? Now’s the time to trial that.
We can now track the real impact of our spend in a simple way. So use this time as an opportunity to really understand where your media budget goes. Hone in on non-working spend and try to understand what’s good ‘wastage’ and what’s merely waste.
5Do a deep re-evaluation of how you manage media
Ever received a hug from a CFO? Me neither. But imagine if you went to them with the revelation that, by doing a deep dive into your current media management process, you’ve found hundreds of thousands euro worth of savings that can be put back into the business. That might just do it.
"A simple review where you engage openly with your partners should kickstart your media management process."
Because of the complexity of the media value chain, the number of agencies and vendors and middle men involved, there’s huge value to be had in simplifying and cleaning it up. So take that opportunity now. A simple review where you engage openly with your partners should kickstart the process. Ask them a series of questions to understand how they're currently remunerated, what they're optimising towards, the steps they are taking on your behalf to maximise the proportion of your spend that actually reaches a human, and how they’re planning to alter your media strategy post-Covid.
Now is also an opportune time to examine whether you can take some of your media strategy, planning or buying in-house. Could social, search or programmatic be delivered internally with a small, nimble, cheaper team? Would you be able to drive strategy in a more consistent way with an in-house senior media person?
The opportunity to build a first-party data strategy that reduces the need for reliance on others should be a part of this consideration. Do you have a customer data platform and could you use it to better target, to deliver more relevant, timely communication, or to personalise CRM for your customers? Or are you leaving this to your agency or a third party to manage?
Now is a great time to re-consider and take a step back while asking some tough questions of those around you.