At a time of volatility, it is harder than ever for brands to plan for the long term; WARC’s Marketer’s Toolkit 2021, released today, outlines the major challenges facing marketers in the year ahead and offers a practical guide to help navigate through uncertainty and find opportunities.
This 10th edition of Marketer’s Toolkit brings together insights from a survey of over 1,000 global marketing executives, one-on-one interviews with more than 20 leading Chief Marketing Officers, and a review of WARC’s latest proprietary research, best practice and case studies.
The six key challenges facing brands outlined in WARC Marketer’s Toolkit 2021 and how to meet them are:
1. Responding to recession
The seismic events of 2020 will echo long into the coming year: marketing strategies are being reshaped to suit the new e-commerce reality, media budgets have been slashed, brand-building activity is on hold. A shift toward investment in performance marketing is accelerating the trend toward digital channels, with Amazon and TikTok among the growth stories. At the same time, brands must find new creative solutions to achieve distinctiveness in the post-pandemic marketplace.
Conny Braams, Chief Digital and Marketing Officer, Unilever, comments: “There was a little bit less spending in the beginning of Q2, but I think quite quickly we’ve come to the conclusion that if we are going to enter a recession then normally the brands that continue to spend come out much stronger.”
- Budget cuts are hitting brand advertising (70% of respondents), agency fees (67%) and sponsorships/partnerships (53%).
- Marketers plan on increasing investment in online video (70% of respondents) and mobile (64%).
- Some 44% plan to spend more on TikTok compared to 39% spending more on Facebook.
- Nearly two thirds of respondents (64%) agree that advertising suffered from a lack of distinctiveness during quarantine.
- Marketers in a position of strength can double down on brand-building.
- Shoppability becomes a key consideration for media spend.
- Brands are flexing their offerings to meet consumer demand for value.
- Distinctiveness is the challenge for post-pandemic creativity.
2. Staying effective in the age of e-commerce
The COVID-19 pandemic has accelerated e-commerce growth globally. Responding to this trend is a top priority for 2021 with brands bringing forward plans to rethink distribution and experimenting with new models. Some are exploring direct-to-consumer options, looking for ways to make it easier for consumers to repeat purchase. This shift in distribution will have a knock-on effect on brand strategy and media investment.
Agatha Soh, Regional Head of Marketing, Shopee, says: “Habits formed over the last few months, such as familiarity with online shopping will heavily impact consumer preferences in the months and years to come. We’re only at the early stages of this growth. For brands and marketers, e-commerce, and in particular mobile commerce, is no longer a nice to have, but an essential touchpoint to tap into this opportunity.”
- 80% of respondents plan to increase or maintain DTC activity in 2021.
- 67% of client-side respondents expect the shift to e-commerce to be permanent.
- Better marketplace expertise is needed to build ‘digital availability’.
- Delivery and packaging become key touchpoints for brands.
- Legacy brands and DTC are converging in strategy.
- Livestreaming is moving from China to the West.
3. Engaging at-home consumers
With restrictions on consumers in many major markets expected to last well into 2021, the ‘at home’ lifestyle will remain a driver of change, and potentially new opportunity. For brands, this means discovering where and how to become a welcome part of our at-home lives.
Marcel Marcondes, US CMO, Anheuser-Busch InBev, observes: “In our industry, there were a lot of changes in interactions with beverages... There was a big shift in the way consumers were buying: larger packs, and also buying much more online. New occasions started to arise, like gaming is starting to become a relevant occasion for people to drink beer.”
- 74% of respondents said post-pandemic changes in consumer behaviour will significantly impact 2021 marketing strategies.
- 52% of respondents say the shift to increased time spent at home will impact strategies.
- There are still opportunities in at-home media, including gaming and various forms of TV.
- Enhancing the home lifestyle is a priority for consumers.
- Brands have an opportunity to make ‘COVID socialising’ a better experience.
- ‘Local’ is a key consideration for travel, retail and beyond.
4. Succeeding in the closed web
The third-party cookie is on the verge of obsolescence, as a consequence of regulatory pressures and the unilateral actions of companies including Apple and Google. This hands even more power to the major ‘walled gardens’ such as Amazon and Alibaba – at the same time as their share of ad investment is surging. With digital advertising dominated by a small number of media platforms, marketers face the daunting task of managing their activity across those garden walls.
Brent Smart, Group CMO, Insurance Australia Group (IAG), remarks: “Too many marketers, in my mind, spend too much money on martech, data and analytics. I think the important thing is to spend your money on what touches the customer, that’s what builds your brand and that’s what will drive sales.”
- 81% of respondents agree that COVID-19 has only served to concentrate power in the hands of ‘big tech’, while 83% of respondents agree or strongly agree that those firms should be subject to “greater regulation” to help level the playing field.
- 29% of respondents say they have no modelling in place to measure the impact of marketing investments across walled garden platforms.
- Context becomes key as marketers lose access to audience information.
- Interest in ‘attention’ grows as marketers look for new metrics.
- Brands explore new strategies for personalisation.
- Advertisers become more conscious about what their media investment supports.
5. Structuring for volatility
Businesses will continue to feel disruption into 2021, with the ongoing upheaval of COVID-19, a severe economic recession, and in some markets ongoing protests ranging from Black Lives Matter to anti-vaxxers. For some marketers, this will be an opportunity, as they lead the response to a volatile market and help their businesses transform.
Marc Pritchard, Chief Brand Officer, Procter & Gamble, states: ”The scourge of racism has literally been around for centuries; it’s not like it’s brand new. I think many have just not faced it and dealt with it because it is hard. But it is inescapable this time, and people need to step up.”
- 78% of respondents believe that purpose is now more important as a result to the disruption to society
- 49% of brand respondents and 44% of agency respondents admit that their company either doesn’t have a diversity and inclusion policy at all or that it is not a focus.
- Marketers revisit strategy - and purpose - from the ground up.
- Marketing can grow its influence by being the link to the market.
- In-housing will keep growing as brands look for high speed and low cost.
- Diversity and inclusion still lag behind.
6. Finding the white space in wellness
Health and wellness will remain centre-stage as the rebuild begins. A growing range of brands are moving into this space, adapting to cater to emerging consumer priorities around both physical and mental wellbeing. As healthcare becomes more digital, brands need to carefully consider their offerings to ensure inclusivity and trust.
Dr R S Sodhi, Managing Director, Gujarat Co-operative Milk Marketing Federation (Amul), says: “We saw the rising demand for immunity-boosting products from consumers and we have launched 11 new products in the last five months to meet that, from immunity boosting beverages like turmeric milk to Haldi ice cream with immunity-boosting elements.”
- 91% of respondents agreed that health and hygiene concerns will have an impact on their 2021 marketing plans.
- 40% of client-side respondents said they were developing a new product offering in response to consumers’ wellbeing needs.
- Health and wellness create opportunities across categories.
- Brands can help consumers take preventative measures.
- Digital health innovation is booming.
- Fitness, health and beauty go digital.
WARC will be hosting three free-to-join Marketer’s Toolkit webinars on 08 December. Register here to join live or to receive a recording.
Sourced from WARC