The impact of the Covid-19 pandemic had already taken a dent out of overall U.S. ad spending and also threatens to halt what had been a run of double-digit growth in digital advertising. Even the duopoly that drove remarkable growth since the 2008 recession is not immune from this crisis. The elastic pricing that relies on healthy demand for programmatic, social and search is deflating any other ad spend that remains, with some of the lowest CPMs in recent history.
But buried in this gloomy outlook is an emerging imperative to do things differently. In fact, for brands seeing sustained consumer demand during this time, such as CPG, technology and some select retail, the risk of testing new things is at an all-time low.
But buried in this gloomy outlook is an emerging imperative to do things differently.
Reach with purpose
As the economic outlook results in reductions of marketing budgets, we will enter an era of many brands having to do more with less. Traditional wisdom has held that shifting from broad reach to targeted or even people-based reach has been seen as a risk. The obvious logic was that increased front-end costs have to be offset by commensurate performance improvement. By extension, ensuring performance improvement requires accuracy in identifying audiences that can drive short-term versus long-term business impact.
With reduced marketing budgets, brands inevitably have to bet on a smaller pool of audiences to drive growth. Waste becomes an enemy and knowing where waste is requires addressable people-based insights and measurement. But testing and refining audience strategy during this time of reduced media costs is an approach that can pay off dividends when we come out of the pandemic’s major impacts. As ad dollars begin to come back, every dollar has to yield more for our organizations. Testing now will place marketers in the best position to take advantage.
Expand into new platforms
One natural area of growth during the pandemic has been ecommerce and for categories such as grocery, which has comparatively slower movement toward digital platforms in the past as the pandemic is forcing a rush toward new channels for consumers and brands alike.
According to the latest Digital Marketing Report from Merkle, while ad spend on Amazon has seen a 50% contraction during the last week of March, their challenges are more rooted in essential product supply than a lack of ad inventory demand. Google’s recent announcement of free Google Shopping for merchants through the end of the year is a direct response to this continued rise in ecommerce, as the digital giant looks to better secure its position in this fast-moving space. Yet a presence on Amazon or Google in and of itself is not an ecommerce strategy. There are many opportunities to expand and test other players like Walmart, Kroger and Target, which have expanded their importance in consumers’ lives.
Shift from exposure to impact
Finally, the social impact of this pandemic cannot be ignored. In Dentsu’s Covid-19 Crisis Navigator research that has measured consumer sentiment weekly since the end of March, one trend that remains unchanged is a heightened expectation of brand responsibility to their customers and community. This is likely to become an ongoing sentiment. Consumer relationships with brands will likely be heavily influenced by cultural values and the actions brands take in this moment, as they are product value.
This is where some of our legacy issues roar back to life. Collectively, we knew an industry metric system driven by simply seeing was insufficient. Now, it’s even more true. The question of how to return to market is not about being seen; it’s about being heard with all the empathy that brands can muster. We will need to sell things, but being seen to be listening will be a priority.
We’re entering a period that will most certainly threaten some but also spur new opportunities for others. One bright legacy of the 2008 recession was the birth of many innovators born in the cloud and mobile era, powered by consumers who took over their relationships with brands. What we learn by testing new things at this moment as others around us pull back can provide us the momentum to succeed.
This article was written by JiYoung Kim from Adweek and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.
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