The future, but faster

How coronavirus is changing advertising and why the changes are set to stick


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During the early, uncertain days of the coronavirus pandemic, business leaders naturally tried to shore up their companies. The imperative to survive such a dramatic and all-consuming shock has been felt across all functions as businesses adapt to a world upended.

And as businesses move to survival mode, there has been a much tighter focus on spending only on activities where return on investment (ROI) is guaranteed. Inevitably, the impact on the advertising ecosystem has been immediate and severe.

With social distancing and quarantining measures in place not just in the UK but across the world, consumers simply aren’t spending money on lots of the things they usually buy, which is why nearly two thirds (64 per cent) of advertisers have put scheduled campaigns on hold and half have cancelled campaigns outright.

But, while lots of advertisers are currently in a holding pattern waiting for a more opportune time to restart conversations with their consumers, the consumption and media trends we’re seeing are worth paying close attention to, not just for weathering immediate challenges, but in planning for the “new normal”.

People isolating at home are consuming more digital media in more ways than before. And in many respects, the pandemic isn’t changing the future so much as accelerating the changes that were already happening. The result is a new-look digital landscape where advertisers and marketers will have the power to reach more consumers across more connected channels, while also delivering on the measurable, ROI-driven activities businesses demand.

New-look digital landscape

Lockdown measures have radically changed the demographic of the addressable digital audience. Consumers who have never previously interacted with certain online media, such as internet-enabled TV, or bought things online, have now been forced to do so for the first time.

Unsurprisingly, this trend is most prominent in older age groups, with the number of people over the age of 45 seeing a significant increase in both digital purchases and interaction with on-demand video services like Netflix, Hulu and even YouTube.

The increased use of connected, digital devices for shopping, relaxing, communicating and living was always the way the world was heading

Suddenly, lots of new people are viewing content in places where they’re reachable and the brands that can pivot quickest to reach them will be best placed to seize the opportunity.

At the same time, these consumers are, by necessity, becoming familiar with researching and buying goods online. It’s highly likely this will be a habit that outlasts lockdown and it’s a huge opportunity for advertisers.

Even when lockdown ends and people start going back to shops, there will be a whole new audience who are used to browsing multiple stores at once online and not just the things in one physical location. So, although making the final purchase in a shop will inevitably come back in many instances, this period highlights that the vast majority of the consumer journey is now online and the path to purchase exists almost completely within the home.

In the new-look digital landscape, it’s more important than ever for advertisers to have the right pixels in place so they can understand their consumers in terms of browsing behaviour, demographics and online activity, so they can best target and optimise delivery when attempting to drive online purchases and customer retention.

Meanwhile, decreased consumer confidence and spending power is likely to mean advertisers will all be competing for fewer pounds in a more competitive space. As with the period following the 2008 recession, which coincided with the first wave of measurable, ROI-driven programmatic advertising, it’s likely advertisers will place a much greater emphasis on campaign performance metrics, but this time to a far larger audience and in a far larger number of addressable programmatic channels.

Rise and rise of programmatic

Programmatic campaigns, which already account for more than 40 per cent of digital ad spend, will continue to grow in prominence as the need to reach consumers online to achieve tangible business outcomes grows. The majority of advertisers and marketers (57 per cent) already see programmatic as the superior channel when it comes to performance technology, and generally advertisers are also more likely to see programmatic as a better channel for research and insights.

When it comes to measuring success on programmatic initiatives, ROI and return on ad spend are the most common key performance indicators (KPIs) used, with just over half of marketers and advertisers (51 per cent) optimising towards these metrics.

But the way they’re measuring ROI may not be up to scratch. Almost half of marketers and advertisers are still using click-through rate (CTR) as a primary KPI. In the new-look programmatic landscape, CTRs simply won’t cut it. They’re, at best, a proxy metric that tell advertisers little about the true value of their campaigns.

Advertisers need to demand this greater sophistication in measurement and optimisation so they can make smarter decisions and demonstrate genuine ROI

The best programmatic techniques and technologies allow for far more sophisticated measurement and optimisation, either towards cost per action, which links an action like buying a product or booking a service to a consumer’s online journey, or to genuine business outcomes, such as customer retention or lifetime value. Advertisers need to demand this greater sophistication in measurement and optimisation so they can make smarter decisions and demonstrate genuine ROI.

Taking control of your programmatic buying

As brands grapple with this new reality, those that have already built the infrastructure to sell directly to consumers are at a clear advantage. For these brands, the impetus has been to bring programmatic buying in-house, executing campaigns directly, while having more control of their data and full transparency around costs and the outcomes they’re aiming for.

But for advertisers working with external partners, there are huge opportunities to deliver more than performance metrics. With the current climate, in-housing efforts may be somewhat hampered by the fact that workers have to stay at home, making building internal capabilities difficult. And at a time when brands need programmatic solutions more than ever, managed service solutions that are ready to go and can react quickly may be a more practical answer.

The future’s already here

The COVID-19 crisis has undoubtedly brought dramatic changes to the way consumers interact with digital environments and the way advertisers can reach them. But, to reiterate, these changes were already happening. The advertisers embracing them are now best placed to react and those who can learn the lessons of lockdown quickly will be best set up for the future.

The post-pandemic world may look very different. But the increased use of connected, digital devices for shopping, relaxing, communicating and living was always the way the world was heading. For businesses planning for this future, the importance of measurable, trackable advertising, which can be delivered across a multitude of interconnected channels, is only going to grow.

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