Digital is the ideal channel as advertisers switch to outcomes-based media buying, writes Lee Lythe, Chief Investment Officer at Spark Foundry UK.
Marketing in the COVID-19 crisis
This article is part of a special WARC Snapshot focused on enabling brand marketers to re-strategise amid the unprecedented disruption caused by the novel coronavirus outbreak.
Our industry is currently experiencing an unprecedented shock to the system; advertiser revenues are estimated to be down 39% for Q2, according to the latest WARC figures. Some categories have cut spend entirely, whilst others are completely overhauling their strategies and investment to adapt to a ‘new normal’.
What is clear is that right now brands require flexibility like never before. Yet the ‘Holy Grail’ is stability, and a guarantee that their media will deliver on their business outcomes.
In adversity, there is often opportunity. Whilst the pandemic is responsible for the declines in advertising spend, it has also created value opportunities across all media and encouraged a new approach to planning, with data and outcomes at the forefront.
Since the start of UK lockdown, the advertising response has been divided. Some brands, like Coca-Cola, have taken the decision to suspend advertising completely in every market. But others have taken a different approach, especially in sectors thriving due to the population staying at home, such as comfort foods, home improvement, hobbies, interests and entertainment.
Everyone’s talking about TV, but what about digital?
For brands looking to continue spending, digital media has remained a focus due to its inherent flexibility. Whilst many channels like TV and print have increased flexibility, in digital, budgets can be committed and cancelled without fear of penalty – meaning that we test, learn, down-weight, up-weight and pause campaigns as necessary.
As a result, digital media has been somewhat insulated from the shockwave and led to the smallest decline in ad revenue compared to traditional media (although still fairly vast at -30% in Q2 and -10% for the full year, according to the latest WARC estimates).
As is the case within many media agencies, our client portfolio within Spark Foundry is diverse, and so their digital behaviour is reliably indicative of the market. Unsurprisingly, approaches have been driven by category. While many retailers and FMCG businesses took the focus away from branding in favour of more socially conscious messaging, brands with a strong e-commerce offering have been able to benefit most from the flexibility that digital offers.
Tech retailer Currys is a great example of this.
When the UK entered lockdown and Currys PC World closed its doors along with most other retailers, it was the first time in its history that it had been a pure-play online retailer. The business had to quickly adapt communications in-line with government guidance and drive awareness of the fact that Currys.co.uk remained open online.
By expediting lead times, we were able to seed the message across digital and social less than three hours after the final copy was received. This was followed up with longer-form messaging on TV and broadcaster video-on-demand (BVOD), showcasing how Currys could help customers get hold of the tech they needed most. It didn't take long for e-commerce sales to roll in and for others to follow suit. Currys ad awareness rose by 8% and purchase intent by 1.3% across the duration of the campaign (YouGov).
That’s all well and good, but will my marketing pay off?
Whilst the immediacy and flexibility offered by digital has somewhat protected the channel during this crisis, digital media owners have been forced to innovate and be more flexible in response. As such, they have introduced a number of measures, including a faster turnaround of 24 hours from receiving insertion orders (IOs) and creatives, support in building and editing creative, and removing the minimum spend requirements, in addition to some significant added value.
These measures have been well received by advertisers, and of course this increased flexibility has helped encourage and protect spend. However, with the shift in consumer behaviour, it’s not just flexibility that advertisers need – it is the reassurance that their marketing will pay off.
There is a shared responsibility between advertisers and agencies to work together in innovative ways to address business challenges and be recovery ready.
Over the course of the recent months, we have not only seen advertisers taking advantage of digital’s ability to frequently adapt messaging and to reach their consumers in-real time, but we have also experienced a shift in focus towards business outcomes.
Advertisers are demanding maximum value, maximum flexibility and as much mitigation of risk as we can provide. Our role as an agency has been to not just listen to our clients, but to truly hear them and be entirely open-minded around new approaches and ways of working. It’s truly been a collaborative effort.
Supporting advertisers through outcome-based media buying has been a key way in which we have helped our partners navigate the storm. This trading model removes the risk for clients and enables them to focus on what is providing a measurable business impact. Desired outcomes will differ across advertisers, but these can be new customer acquisition, sales, revenue, sign-ups or any agreed KPI. Digital is the ideal media for outcome-based buying as data can sit at its heart with outcomes being the most reliably measured.
To date, we have had some bona fide successes with this model, across a wide range of KPIs and as such, clients are able to plan with more confidence as the risk has been mitigated.
A Carpe Diem moment
In such a time of uncertainty, one thing we can all be sure of is that advertisers continuing to make smart digital investment decisions are setting a foundation for continued success when we settle into our ‘new normal’.
COVID-19 has forced the ad industry to reevaluate and refocus. Advertisers require certainty and agencies need to step up to the plate. We must forge stronger partnerships with our clients, truly understand their business challenges, create plans based on outcomes and most importantly deliver upon them. This is a Carpe Diem moment for brands and agencies alike. Let’s ensure we seize it.