‘It’s a dangerous time to go dark’: Advertisers prepare for an uncertain summer
The third quarter in the most normal of times is a media lull, landing smack dab in the middle of languid summer months, used more as a preparation for the critical fourth quarter to end the year. This summer, advertisers have their plates full as they settle into the most unusual summer in memory.
Advertisers are scrapping their original plans for 2020 as they adapt to new consumer behaviors brought on by months of quarantine and continued social distancing guidelines. What’s more, the liberation of coronavirus strictures will be unevenly distributed, as some regions spring to life and others haltingly come out of slumber. That means the flight plan is out the window now; advertisers are re-routing as they go.
Most (52%) are still working on those revisions, per a survey of 151 marketers and agency execs from Advertiser Perceptions. And just three in 10 (29%) of those surveyed said they already have a new strategy in place.
While this summer would seem ideal for companies to reboot, few can afford to go dark, coming off a written-off second quarter. Retailers have inventory backlogs to move, restaurants are opening and “normal” economic life is grindingly returning.
More than half of advertisers still plan to ramp up ad spending in the third quarter, while 28% are accelerating spending before the end of June, per Advertiser Perceptions.
“When the macroenvironment is tough that’s when you still have to make sure that you have the presence in the market to build longer-term relevance,” said Anthony Bradbury, marketing director at Jaguar Land Rover U.K., who is overseeing the Jaguar brand’s return to TV this month. “It’s the most dangerous time to go dark.”
Coca-Cola is planning to restart its marketing after it paused the bulk of its advertising during the lockdown. Barbara Sala, strategic connection and media director for Coca-Cola’s Central and Eastern Europe business unit, said at the IAB Europe Interact conference earlier this month that real-time content production, streaming and distribution would play a bigger role in how Coca-Cola creates and buys ads. Adjustments are being made to ensure those recovery plans are flexible, not fixed.
“Advertisers are having to adjust their market, creative, and media strategies more sharply and rapidly than ever before,” said Justin Fromm, evp of business intelligence at Advertiser Perceptions. “They’re counting on media partners to help them do it, by continuing to waive cancellation penalties, reallocate budgets to different properties, and reschedule campaigns for when the budget and consumers are there.”
The way advertisers realize those recoveries vary widely.
Six in ten (58%) of advertisers say its time to replace coronavirus messaging with product-specific ads, while 44% are hamstrung by the difficulty producing new creative due to social distancing guidelines and lingering stay-at-home orders, and half aren’t sure what their message should be, particularly as coronavirus and the economic cataclysm have been joined by social unrest.
Even with live sports returning, advertisers are wary of spending their media dollars without greater flexibility to only pay for what is shown. Buyers are demanding contingency clauses and clearer protections against lost income from broadcasters to mitigate the potential blow of further cancellations. This could lead to more diverse rights deals that go beyond live-action such as behind-the-scenes footage and fan-led content.
“Undoubtedly, people are going to develop language that is going to be applicable to these types of deals,” said Irwin Kishner, a co-chair of the Sports Law Group at Herrick Feinstein. “Those clauses are going to live on for many years.”
These challenges are compounded by restricted cash flow, with sales down across a number of industries. Indeed, most (54%) businesses cite cash flow as their most pressing concern going into the second half of the year, per a survey of 701 clients Dentsu conducted last month. Cash flow uncertainty is pushing some advertisers to focus on customer retention over acquisition, with CRM coming to the fore for some going into the latter half of 2020. For example, CRM is set to be a crutch for automotive marketers. Cars tend to be the second most expensive purchase made by consumers, meaning the market is sensitive, particularly to rising unemployment.
“We’re getting back to business as normal now that showrooms are reopening and my role is now focused on helping customers with their next vehicle purchase an informing them that their car is due a service,” said Mark Benton, CRM manager at Lexus.
As lockdowns ease, there’s a willingness among many advertisers to deviate from their tried-and-tested media plans. According to Advertiser Perceptions, more than half of the advertisers had planned to advertise in postponed live programming, and 75% of them are open to “acceptable substitutes” — particularly in entertainment, lifestyle and gaming video content. It’s the same for social media where some marketers see audiences going now to feel part of something bigger during these testing times.
“With the current situation, people are using social media more so there’s a chance to reach more customers by focusing our advertising there,” said Yann Le Bozec, EMEA marketing director at Crocs. “As part of those changes we’ve given our influencers a new creative brief to not only ensure that we’re asking them not to do anything that compromises their safety but also to focus on promoting our core products.”
At the same time, advertisers are fortifying investments in addressable channels where it’s easier for them to not only move money in and out but also to optimize. They’re encountering sudden changes in consumer behavior, product demand and marketing budgets so they need to have tighter control their timing.
“Brands are not making as many long term commitments,” said Terena Patrick, global director of media strategy at PHD U.S. “Advertisers are looking for flexibility as much as possible to address the constant changes in the world right now. Perhaps the norm was to commit to six months and now those brands are buying two or three months at a time instead. So the dollar amount may not change, just the commitment cadence.”
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