Dispelling the myth of a V-shaped recovery
In short, the entire industry will need to get more personal, more valuable, and more sustainable.
If we are to derive one truth from the Dentsu survey of 700+ clients across 36 markets, it is that the pandemic is accelerating companies’ transformation programmes. Yes, this is most clearly manifested in digital capabilities, such as e-commerce, but there is a more profound truth: consumers themselves are changing and demanding that transformation. Consumers have had to reinvent many areas of their lives – from childcare and education to shopping and socialising. Many of these newly learnt behaviours will persist beyond the pandemic, exploding the myth of any kind of V-shaped recovery. Life – and marketing – will never be the same again.
A deep dive into the Dentsu client survey highlights what we, as an industry, believe will change as we emerge from the pandemic. In short, the entire industry will need to get more personal, more valuable, and more sustainable.
1. Getting personal
With media budgets under pressure, many marketers have needed to pay more attention to their existing customers: 32% of respondents increased their CRM activity, and 45% believe they will need to invest in CRM long term. This flies in the face of recent fashions, such as “How Brands Grow,” but we believe it is how the world will emerge. We will know more, understand more, predict more, target better and, ultimately, better serve consumers’ real needs.
What does it mean for brands?
Upgrading CRM capabilities is not only valuable in times of crisis, it is a winning strategy in the long term. A new depth of customer data can help product development teams adapt portfolios and address emerging consumer needs. It can help marketing and creative teams tap into new insights to build messages and experiences more aligned with customer priorities. It can be leveraged to develop new services (e.g., frequent customer questions can help create a simple support chatbot in a few hours). First-party data also powers the most relevant media targeting and improves customer acquisition (e.g., modelling of similar audiences). Further accelerated by consumer and regulator rejection of cookies, getting personal will soon be the only real way to market.
2. Providing valuable content and experiences.
When the crisis amplified and lockdown measures spread, many brands adopted the ‘First, do no harm’ adage by quickly adapting their existing creative work to not appear out of touch with the current events. More than half (55%) of respondents have adapted their creatives to respond to the consequences of the pandemic. It is by far the measure most frequently taken by marketers (it ranks #1 across all regions). Advertising creative, however, is only the first step. Fifty percent of CMOs declare they will need to invest more in content over the long term. This is not surprising given the increased need for consumers to know, be informed, be advised, and be entertained.
What does it mean for brands?
The buck doesn’t stop with rolling out an emotional hero TV commercial, and brands should not neglect the other types of content that serve consumers from either an emotional, informational or transactional perspective. A successful content strategy encompasses many facets, beyond entertainment and influencers. Aligned to those, we are likely to see more significant investment in the other areas. For example, delivering accurate information about logistics (e.g., up-to-date store hours in maps), temporary customer practices (e.g., clear return policies), product information (e.g., stock levels in search ads), etc. Making sure that all content is consistent and valuable from the first interaction to the product page is fundamental.
We are likely to see an increase in content development processes: what to create, commission or curate. And we will see a shift in the type of people and cultures who oversee that content. We will also see content optimisation coming to the fore. SEO, UX and CRO can no longer be an afterthought; they will need to be aligned with the creative process from the outset.
3. Balancing short-term business continuity and long-term recovery planning
Although most industries have reduced marketing budgets, some have seized short-term opportunities amid the crisis. For instance, Technology & Telecommunications respondents report budget increases twice as much as their Finance & Insurance counterparts.
While 95% of respondents have been reviewing their 2020 marketing plan, a third of respondents (31%) report they only changed the plans for the first half of 2020 so far.
Recovery planning is happening now. As many national governments are progressively announcing timelines to ease confinement restrictions, 73% of marketers have already started planning for recovery.
What does it mean for brands?
Consumers will not simply bounce back. Many of their newly discovered preferences will persist, and brands will need to integrate those preferences into new plans. Brands have made real advances in getting personal and in delivering valuable content and experiences. The imperative now is to integrate them into “new normal” plans.
CRM and e-commerce have proven themselves to be powerful; now is the time to see how they can be integrated into a more extensive communications plan. Those plans cannot be siloed across different teams and functions; they will need to be integrated across the entire consumer journey if they are to remain powerful. Metrics, such as Customer Lifetime Value, will need to be elevated, with precise diagnostics to pinpoint those moments when value can be increased or is in danger of being forfeited.
On a similar note, we have learnt how to learn rapidly and adapt quickly. As an industry, we will all need to retain that ability to learn fast, flex fast, all the while focused on a longer-term goal: Customer Lifetime Value.
See the whole picture and download the full report, The Reality of Recovery: A post Covid- 19 World today.