Adlucent is compiling a weekly digest to assist our partners and industry in working through COVID-19 as ecommerce businesses. We’ve chosen the news we think is most relevant to retailers and brands, outlining the past week’s COVID-19 updates in the media. If you’d like our team to notify you as we continue to share content, sign up for the Adlucent newsletter.
The last recession, from December 2007 to June 2009, resulted in a two-year decline in ad spending. And, the US may face another economic downturn due to coronavirus. The biggest difference is, this time, digital advertising has grown from being a minor percentage of total media ad spending to representing a sizable portion of ad budgets. The other differences from today’s financial climate and the recession ten years ago are:
The last downturn was more expected than the current situation. Although many economic analysts also predicted an upcoming recession, it was not predicted to result from a pandemic, causing weeks or months of lost wages for many Americans. The quick onset led to a lack of preparation and, as a result, just-in-time supply chain management.
Consumer media consumption has shifted. Many questions arise as consumer media habits have broadened since 2009, and newer platforms grab consumer attention, leading advertisers to wonder where to put their digital advertising dollars moving forward.
Digital ad budgets are more fluid than ad spending in the past. Bids can be immediately decreased and budgets pulled. If customer lifetime value goes down or other negative impacts are found, it may cause a much bigger change in the advertising landscape.
In addition to federal and state governments, many companies are also offering free tools and resources to bolster small businesses impacted by COVID-19. This index shows some of the companies to turn to for resources, online tools, classes, and financial assistance. See which organizations are offering support with ad credits and grants, and legal and employment issues. Find options for marketing, supply chain solutions, social media services, search engine optimization, and presentations design. Explore help with ecommerce, cloud storage, work-from-home skill shares and tools, team videoconferencing, cybersecurity, video content, wellness, and even gift certificates.
Amazon has set up a landing page to cover COVID-19 content for Sellers. There, Amazon partners, Vendors, Sellers can find frequently asked questions like, “Are there keywords I shouldn’t use in my sponsored ads campaigns right now?” The site, which is translated into different languages, answers pertinent questions, and provides resources for brands on the digital marketplace.
With certain measures, automation and machine learning can remain beneficial in times of crisis. Search Engine Land provides core elements to watch for and adjust to ensure automation can be trusted during extremely volatile times.
Bid modifiers have to change as people’s behavior does – Normal demand curves, geographic volumes, and device behaviors have shifted pre and post-crisis, adjust accordingly.
The news will influence how inventory is managed, and vice versa – Ascertain that inventory management and bidding tools can react to spikes and tail-offs due to news reports.
Keep an eye on Smart Bidding algorithms – Review best and worst performance days to analyze the accuracy of Smart Bidding.
Brace for delays in creative approval across platforms, and change up automation as needed – Search engine ad approvals may be slower than normal with strained resources; ensure new ads are live before pausing others.
Keep safety and communication as a top priority – Be accurate, communicate the reality, and keep brand voice top of mind.
Keep Dynamic Search Ads, and queries in general, under close watch – If deciding to remove crisis-related queries, exclude any crisis-related pages from your DSA campaigns to keep campaigns running smoothly.
Be sure to set up volatility alerts – Create only vital alerts, which frequently cover important metrics.
A Chief Media Officer discusses the effects on their role from the pandemic, specifically media investment shrinkage. The main impact has been the importance of advising the finance team of the necessity (or lack thereof) of certain deals. They also explain the uncertainty of the impact of their decisions, which they may need to revise due to shifting company priorities or new information. Also of note were budget revisions for the next few months (Q2) due to festival cancellations and stricter budgets. The executive continued to speak about the overall unpredictability and the adjustment of media dollars moving forward.
SVP Jason Roussos of Adlucent explains how organizations should adjust distribution and marketing strategies to react best to COVID-19 challenges. Companies with multiple shipping locations, strong distribution facilities, and good relationships with overseas supplies are positioned to recover faster. Also, the ramp-up of production in China means the initially assumed negative impact from that region may be mitigated. Furthermore, businesses need to adapt their digital marketing with investment in creative and video to reach customers as they spend more time on social media and streaming platforms. Investments in mobile ads will also be necessary at this time. Brands should check that their websites are mobile-optimized to create the best in-app shopping experience. And finally, leverage the current data to implement tools for future growth.
Concerns over COVID-19 have consumers spending more time at home and avoiding physical stores. Within this framework, retailers must shift digital marketing strategies and create immediate, short- and long-term response plans.
Immediate response plan – Companies should focus on business continuity, employee health and safety, supply chain and distribution, and business and product changes or availability. Start with an emergency response and tailor the communication as circumstances change.
Short-Term response plan – Retailers should modify their marketing strategies, ensuring the proper investments across channels. Rather than pausing all ads, update campaigns to adjust to the new situation.
Mid- to Long-Term response plan – Organizations should estimate market recovery as best as possible to support sufficient marketing investment and inventory distribution. Furthermore, brands should take steps to develop contingency plans for potential future crises.
While developing response plans, retailers will also need to update ads across channels and use different strategies with each paid channel. Implementing response plans and acting empathetically towards customers will help brands capture and maintain brand loyalty and succeed with digital advertising.
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