As marketing strategies around the world were unceremoniously deleted en masse as Coronavirus settled in, brands & their marketers began adapting to a drastically different outlook for 2020. Companies are preparing to absorb losses amounting to an anticipated $2.1 trillion in the retail sector alone, while 65% of marketers anticipate a decrease to their annual marketing budget. In the midst of these challenges, CMOs are adapting their media strategies and budgets to account for a new kind of consumer landscape.
Not surprisingly, at a time when people around the world are being asked to stay home, spending habits have shifted considerably. Forgoing fashion and luxury items, customers are buying from brands that keep them sane and entertained at home.
Transactions for products and services related to fitness, hobbies, learning and even survival have increased by 100% or more. At the same time, consumer spending in general decreased 7.5% in March 2020, the steepest monthly decline on record.
Let’s take a look at some of the ways marketers are optimizing their strategies during the coronavirus crisis to keep their brands relevant to customers, mitigate risk and seize new opportunities.
Marketing at a social distance
As consumers stay indoors and online, brands have had to rewrite their marketing strategies virtually overnight while planning for a future littered with question marks. Many traditional advertising channels have gone dark. The cancellation of live sports, concerts, community events and conferences has brought event marketing to a screeching halt. And out-of-home advertising campaigns have become all but obsolete with only a fraction of consumers out on the streets.
Marketers are being forced to test new messaging, ad creative and audience targeting – a task that proves more challenging on traditional channels than digital ones, particularly when it comes to monitoring, measuring and adapting on the fly.
Most importantly, consumers are now spending far more time on the Internet than anywhere else, a reality that Vodafone says resulted in a 50% surge in internet usage in some European countries.
For all these reasons and more, digital marketing is key for brands fighting to stay relevant during the pandemic.
Ramping up digital strategies during the crisis
Every company is being asked to look strategically at both short- and long-term strategies to either mitigate risk or capture emerging opportunities. Rather than being overly reactionary, prudent marketers are making adjustments and expanding their digital marketing tactics as consumer behavior continues to shift.
When it comes to evolving the digital side of their marketing strategy, these eight considerations are top-of-mind:
- Promoting online sales - It’s a bit of a no-brainer, but for companies that have shifted to or increased e-commerce, the priority is, undoubtedly, on investing in digital marketing tactics and messaging that drive online sales.
- Retaining customers - Economic uncertainty has the effect of weakening brand loyalty. Only four out of 10 brands held onto at least half of their highly loyal customers following the 2008 recession. Digital marketing strategies should focus on retaining existing customers, rather than attracting new ones, through digital communication that is trustworthy, honest, personalized and empathetic.
- Returning to social - Social ad spend across the globe hit a lull in late March due to uncertainty surrounding coronavirus. Signs of recovery began to appear in April as spending on social channels increased back to pre-pandemic levels. Social channels will continue to be crucial to retaining customers and building brand awareness.
- Seizing opportunity where competition is low - As the pandemic continues, some companies are pulling ad campaigns as a way to regroup and cut spending. The absence of competition resulting from brands shutting down or slowing their marketing activity creates opportunity for those with the means to spend on advertising. Getting results is easier, faster and cheaper, with reductions of up to 47% in CPM and CPC prices. This presents a prime opportunity for brands to reach customers at a lower price than before the pandemic.
- Monitoring and adjusting allocations - Since COVID-19, marketers are more closely managing digital and social spend according to demand-driven price fluctuations. In March 2020, for example, Facebook ad revenue dropped significantly, Google search traffic decreased on mobile and YouTube ad traffic increased. These fluctuations will likely continue as companies measure and adapt their strategies and reallocate budget based on consumer behavior.
- Increasing use of display advertising - Marketers are also moving towards an increase in display advertising, through a combination of direct buys through Facebook audience network (FAN), Google display network (GDN), as well as an increased programmatic advertising focus.
- Looking long-term - Many brands pivoting to weather the coronavirus storm ditched short-term sales targets and campaigns as the outbreak expanded. Companies are opting to forgo immediate business outcomes in favor of brand-building campaigns that will help them survive over the long term, particularly through high-quality digital content.
- Practicing socially responsible advertising - During a crisis, consumers respond to messaging that is compassionate, sensitive and genuine. While some brands have capitalized on fear-based messaging for short-term gain, this type of advertising can cause reputational damage. Consumers expect more from brands during crisis. Take, for example, the 47 percent of global consumers who now expect companies to support hospitals during the pandemic. Brands that rise to the challenge have the potential to be remembered favorably by consumers once the crisis passes.
It’s not unreasonable to expect that some consumers may have changed their habits permanently by the time the outbreak is over. And many will be reluctant to return to public places right away.
According to GlobalWebIndex, 60% of consumers anticipate they will wait for “some time” or “a long time” before attending events at outdoor public venues, while two thirds will avoid indoor spaces like cinemas and arenas.
The effects of the virus will linger long after public health measures have relaxed, impacting how quickly brands can bounce back, particularly those with a brick-and-mortar presence. While marketers will be expected to do more with less over the coming months, they also have the opportunity to reach audiences at a time when digital advertising costs are low and consumer attention is more readily available than ever before.