The coronavirus has been with us for several weeks already, and will continue to impact how we live and how brands advertise to us. Despite reports that popular outlets like coffee shops and restaurants may soon reopen, consumers behaviour will change as they adapt to living with the virus for many months to come.
Consider your most recent trip to the supermarket. Did you linger in the aisles, browsing the choice of items and taking notice of the point-of-sale offers? For the sake of social distancing and anxiety about catching the virus, many of us have reduced our “dwell time”, rendering those at-shelf promotions almost irrelevant.
Similarly, forecourt advertising, other out-of-home ads such as bus-side executions and press advertising are taking a huge hit from reduced exposure to consumers; not to mention door-to-door selling.
On the other side of the coin, some channels will undoubtedly offer better returns. Digital is an obvious winner, with people spending even more time online. Direct mail is likely to be another (albeit with some changes to deliveries).
Marketers appear split on how to respond. This is exemplified by Diageo’s decision to rein in some marketing and promotional elements of its strategy, even as Pizza Hut’s marketing director proclaimed “now is not the time to pull back on media spend”.
Most brands have been affected and they seem to be following one of three strategies: 1) Cancel all advertising; 2) Readjust ad spend – but largely based on gut feeling or 3) Have a well thought-out plan using attribution and econometric modelling tools.
Let’s examine each of those approaches in turn. Unless an organisation has sadly gone out of business already, received wisdom at times of economic difficulty suggests that they should continue – even increase – advertising. So, the first approach seems inappropriate for most viable brands.
The second approach, rejigging budgets, is also being visited. The problem is, many organisations do so by the seat of their pants without really knowing what’s going to work best. For example, pouring all budget into TV ads under the impression viewing figures will go through the roof in lockdown may simply tip advertising past the point of diminishing returns when it is no longer an efficient channel to use.
That leaves the third strategy – and it’s by far the best. Econometric modelling and attribution systems like our own Omniatt that are easy to apply can be used to optimise media spend, which is key in the current situation when every penny counts.
As consumers react differently to life under coronavirus, brands need to know which channels are efficient and which might be a waste of money and effort. So how can brands understand which budgets to cut and which to bolster to get the best returns?
One recent example of this in practice was when we helped The Salvation Army reshape its fundraising programme following GDPR’s introduction – of which coronavirus is reminiscent from an economics point of view.
Developing a suite of algorithms allowed the organisation to make substantial savings without massively impacting response.
We’re already seeing take-up of this approach during the coronavirus crisis with several clients coming on board. With the capability to consider 200 different media channels in concert, the tool accurately attributes the impact of all touchpoints within a consumer’s journey; online or offline advertising, brand and direct advertising, social media, and so on.
Many advertisers use oversimplified and often misleading first or last touchpoint attribution models; others are simply not bothering with any analysis. Without a handle on ROI, these brands are collectively losing millions of pounds through ineffective channel spend.
It’s a “finger in the wind” way of doing things. Brands can spend so much time looking at the minutiae of individual channels they forget the bigger picture. Far better to solve that problem by considering everything in one place, discovering attribution that can deliver huge cost savings while also boosting sales and customer retention.
Making advertising budgets work harder has never been more important than it is now. With the right tools for the job, brands won’t just survive in a hostile environment – they’ll thrive.
Bill Portlock is founder and chief executive of Marketing Metrix