Weathering the downturn with lessons from the Great Recession
The coronavirus pandemic has challenged how we go about our daily lives while having a devastating impact on the economy. But we’ve been here before, financially. The Great Recession of late 2007 to early 2009 tested consumer trust and economic stability. Marketers and business owners emerged from that recession having learned some key lessons that can help us weather this current downtown and prepare for recovery.
How does it relate?
Consumers are experiencing fear and instability today, similar to the emotions permeating the Great Recession. Many have shifted to buying only essential items with the best deals until they feel more certain about their financial future. Fortunately, for marketers today, we have many more tools and data at our disposal than we had in 2008, but we still need to look back at the strategies that were most successful to know how to best use them.
Overcome marketing financial fears
Financial worries during the Great Recession caused some business owners to reduce or eliminate their marketing spend. However, decades of studies show us that the best way to maintain or advance your share of the market is to continue advertising, even with a reduced budget, so you don’t fall out of the consideration set.
It’s why Kraft Salad Dressing saw a 70% sales growth following increased advertising during the 1991 recession. In that same period, McDonald’s decreased its advertising budget, which Pizza Hut and Taco Bell took advantage of to grow their own sales by 61% and 40% respectively, while sales at McDonald’s dropped by 28%.
Find new ways to stretch your marketing dollars
Even as advertising dollars declined for most mediums in the 2008 recession, many companies still took advantage of the growing popularity of Facebook and other social media sites for their ad campaigns. Though online advertising has become much more common, new sites and services may be untapped by many companies. Randall-Reilly’s ability to use proprietary trucking, construction and agriculture databases (RigDig and EDA) to create custom audiences, makes social media a must-have.
Today, OTT/CTV campaigns running non skippable ads will reach a larger audience as video streaming services brought in $11.3 billion in revenue in 2018 and music streaming also resulted in $7.3 billion in revenue that same year. If your budget has been reduced, creating custom audiences based on your ideal buyers will result in a higher ROI.
Adapt and innovate to match consumer behavior
When American and European marketers in 2008 noticed that many consumers were switching to value alcohol brands, they adapted their marketing campaign to appeal to spend-conscious consumers. Supermarkets such as Aldi and brands such as Smirnoff promoted discounts, economical sizes and new products specifically catered to those who preferred to stay home rather than pay a premium at bars. Furthermore, Amazon’s introduction of the innovative Kindle in November of 2007 helped the company emerge from the Great Recession relatively unscathed. The device soared in popularity, taking e-book sales along with it, and helped the company grow its sales by 28% when many businesses struggled to reach the same heights.
By now, most of the country is in some stage of reopening, but many consumers are still hesitant to return to brick and mortar stores. Tell your consumers what you are doing to ensure their safety and that of your employees. Bolster your online services and delivery options so your business is still able to meet their needs.
Adjust your messaging mix to factor the current consumer mindset. For equipment with a lengthy buyers’ journey, a price promotion, extended warranty offer or repair services can accelerate a decision. Emphasize value and reliability when they buy from you, both during the initial purchase and when it’s time for repairs and maintenance. The economy will recover, and by revisiting your marketing strategy with that in mind, your business is poised to quickly and efficiently take advantage of the eventual upturn.
The Great Recession teaches us important lessons about marketing during an economic downturn. By looking at how companies successfully moved forward with business operations during that time, you can make informed decisions on how you can be poised for recovery as the coronavirus eases its grip on our economy.
READ MORE HERE: www.randallreilly.com
COVID-19’s Effect on Media Consumption (And 5 Trends to Note)
COVID-19 — the coronavirus disease that’s currently pervading everything, from our behaviors, work routines, and health awareness, down to our newsfeeds. We’re approaching uncharted territories as each and every individual around the globe is feeling the impact, both personally and professionally.
During a pandemic, of course, there are major shifts in the way people think, feel, and act. What’s critical for brands is understanding the shifts to better manage their responses going forward.
These consumption shifts are considerably impacting brands. So, to help manage the impact, we’re sharing five behavioral trends, and actions marketers can take as a result.
We’re all consumers. We know how we typically consume content — when we have time for it. During our morning commute, at lunch, and during our evening commute. Given many of us are now at home, without choice, those typical consumption spikes have greatly flattened as we’re consuming media throughout the entirety of the day.
5 Trends to Note
Online traffic is surging
Week over week, the global Outbrain network experienced double-digit growth — 13% specifically, trending up steadily. Coronavirus-related content spiked by over 18% in the U.S. alone, with similar gains seen around the world, from Spain to Singapore.
Consumers are looking for answers — updates from the government, knowledge on symptoms, tips to #FlattenTheCurve, and much, much more. And with the added time sanctioned at home, they are doing so more frequently throughout the day.
Given the surge in traffic, we’re seeing marketers hit their daily or campaign budget caps much earlier in the day, missing the opportunity to connect with new audiences later on. As a result, marketers with elastic budgets are reaping the benefits. So, if budget allows, consider raising your budget cap, or removing the cap altogether, if performance is strong.
Also, given the surge, we found that marketers utilizing Programmatic or Video campaigns are experiencing heightened performance given the automated bidding process of Programmatic and engaging ad experience of Video. Consider testing either and reconsider your campaign budget caps, if possible.
Traffic is more premium
Given the sensitivities of the global pandemic we’re facing, a great deal of the surged traffic is going to the more familiar publishers, such as CNN, as there’s an automatic consumer trust gained from the brand recognition.
While page view growth is heightened throughout the entire network, we’re seeing the more premium publishers gain two times higher growth compared to others. Premium traffic can be competitive and costly to acquire, pending the quality of your ad experience. While it’s not possible for marketers to only target individual publishers per se (i.e. you can’t just target CNN traffic), there are ways to optimize toward high-impact placements.
For top-performers, consider increasing bids by 25% to 50% to lift the competitiveness of your campaign within the network and gain more traffic. Though be sure to keep an eye out to ensure your bids don’t negatively impact your CPA.
Consumption times are shifting
Consumption times are shifting as more consumers are confined to their homes and local neighborhoods. Instead of the usual media spikes during commuting or meal hours, we’re seeing more of a flat rate of consumption throughout the course of the day.
Given the shift in behavior, consider testing a campaign without your usual scheduling times to see if the flattened consumption spikes help your performance. Utilize scheduling tools to tighten your budget around high-performing times like 9:00 PM when there is often a late evening uptick, especially in countries experiencing stricter regulatory lockdowns.
Some verticals are thriving, some aren’t
Overall, performance trends are strongly associated with both the type of marketer, as well as the vertical or category they, or their content, fit. Which as we know, is to be expected given the crisis we’re up against. For example, with travel bans in place, the Travel vertical is experiencing major business pains, whereas Home & Lifestyle is experiencing the opposite.
Vertical ad types matter – consider tailoring your content accordingly. Your product or service may fit one category, but that shouldn’t deter you from building content around related, high-performing categories. Consider audiences’ true interests rather than intent (search) or sharing (social).
Platform performance deviation
While heightened, all-encompassing traffic patterns are remaining Mobile-skewed, given the ongoing consumer shift to Mobile devices (and the more cost-efficient CPCs mobile campaigns often allow for).
Though interestingly enough, when it comes to Coronavirus-related content, Desktop campaigns are performing stronger than their Mobile counterparts. Following the trend in WFH policies, this is likely due to the developed use of Desktop computers, away from the typical effects a work environment might have on media consumption. Be sure to break out campaigns by platform, and think mobile-first for non-coronavirus-related content and desktop-first for the opposite.
Remember to treat any and all coronavirus-related content with extra care. Ensure it’s informative and fact-based, and note that many ad platforms have significantly tightened ad guidelines surrounding the current global climate.
READ MORE HERE: www.outbrain.com
Innovating through the COVID-19 disruption
Most industries have experienced a digital disruption – adapting and evolving to meet the changing needs of customers and employees. As significant as that has been, it turns out a life-threatening, economy-stalling global pandemic is an even more powerful disruptor. Being the next tech billionaire is compelling, but for most it pales next to staying alive and protecting your loved ones and co-workers. Disruption accelerates adaptation, and we as humans are now finding both safety and opportunity in at least four ways.
Disruption changes what we value. During digital disruption, people elevated the values of ease, speed and convenience. During COVID-19, we have elevated safety and economic security. But beautifully, we also have elevated personal connections and empathy. We see these values behind most of the macro and micro behavior changes we are witnessing.
When values change, so do behaviors. Increased value on safety means we’re not flying, staying in hotels or eating in restaurants. We’re driving less and buying clothing for only the waist up. However, we are buying even more online, and we are picking up our groceries curbside. The desire for personal connection has us video chatting with grandma and going to drive-by birthday parties. Our increased value on empathy is reflected in all of the above, and no more so than when people make homemade masks for hospital workers, friends and family.
Accelerating digital adoption: COVID-19 has accelerated adoption of numerous digital technologies and services, taking many of them mainstream ahead of schedule. Instacart, the grocery delivery app, has seen a 450% increase in sales since December. Microsoft added 12 million new Teams users in one week in March. The pandemic forced people to adopt these digital services earlier than planned. For these companies, COVID-19 was like a time machine that brought them users earlier than expected. The question now is, “Can they keep them?”
Stimulating innovation: The old adage goes, “Necessity is the mother of invention,” and when that necessity is making up for lost revenue, inventions come fast. CarMax, which has been looking in the rear-view mirror at Carvana for a few years, had launched several online offerings prior to the pandemic. Given the new environment, it accelerated the rollout of online sales and introduced a contactless curbside pick-up offering two weeks after the stay-in-place order. A week later, it released an online car auction site. The question looms – can companies like CarMax sustain momentum and continue to be nimble and rapidly innovate?
Affecting policies: From the beginning, governments issued stay-in-place orders and businesses adopted work-from-home policies, but those were just the beginning. Businesses have established “Distance & Disinfecting” (D&D) teams, which are setting guidelines for how to keep employees and customers safe in retail and work environments. These D&D roles are not temporary assignments, but permanent teams charged with making customers and employees feel safe and rapidly reacting to future crises.
Companies are moving through the COVID-19 disruption in a progression of business moves. The progression is cyclical, and different parts of your company could be navigating through different business moves at the same time, making it critical for leaders to have a clear view of where their teams are and how well they are progressing.
- Departure: When businesses ran as usual, leading companies took an analytical approach to how customer behavior was changing, identifying demand and behavior changes, and prioritizing gaps and new opportunities.
- Challenges: Companies then quickly redesigned products, offers, sales approaches and critical customer-experience moments to match the new values and behaviors.
- Transformation: Now leading companies are figuring out how to operationalize these new experiences and offers, making changes to the workforce, technology, and processes that make them more effective.
- Return: Companies are also looking ahead and thinking strategically about how to win in the new environment. It is difficult to plan ahead when there is still much uncertainty about how all is going to settle. What customer values and behaviors will persist and which will revert back?
Looking ahead, companies are leaning on employees who are collaborative and able to work courageously in the face of ambiguity, because designing the future of customer experience isn’t about guessing what the future will be, but being able to best maneuver with it as it happens.
READ MORE HERE: prweek.com