By Maria Tudor, Digital Planner Buyer
November’s Office for Budget Responsibility report made for sober reading, stating that the UK is in a recession, and we now face the “worst fall in UK living standards since records began”.
After two long years when survival was the aim, brands had kickstarted 2022 by accelerating recovery and quickly flatting out on growth. However, the cumulative impact of the cost-of-living crisis, global supply chain issues, tax cuts and the resulting decline in the Pound value has forced many advertisers to rapidly put their foot on the breaks.
As we begin 2023, is now the time to sense-check our post-pandemic ambitions as we enter this new wave of economic uncertainty?
The truth is, we have all been here before, and not so long ago. The shock of the pandemic was such that most media organisations published extensively on strategies to adapt, cope and thrive under uncertain market conditions. You were likely on the ‘frontline’ of such discussions and have experienced first-hand the hurdles businesses may face this year.
Therefore, we have collated and re-evaluated our key learnings from the Coronavirus pandemic to ensure you are better equipped to face 2023 planning than early 2020.
Is there ever certainty in the market?
Ironically, there is no certainty in media planning. Even under the most prosperous market conditions, consumer behaviour remains unpredictable, and the evolving technology that powers digital advertising means that channel benchmarking is constantly changing. As such, uncertainty must become the norm for media planners, media owners and clients, as only when we plan for uncertainty can we gain the perspective and flexibility to cope with real outcomes. Here at The Kite Factory, we turn reactivity into our USP by supplying clients with Reactive Media Playbooks to enable them to ride any market wave that comes our way.
The Bank of England warns that the latest recession could be the longest on record. The UK economy will likely decline every quarter until at least 2024 and has the strength to arrest the growth that businesses have acquired post-pandemic. How this socio-economic instability manifests strategically in forecasts, budgets and media choices will be critical in not only surviving the economic storm ahead, but thriving in its aftermath.
Live through this
A typical panic behaviour is to pause all advertising activity, particularly when encountering performance issues. Instead, we should enter 2023 with the expectation that sales performance may suffer and that a direct year-on-year comparison with 2022 is not a fair assessment of media effectiveness.
Within the media landscape, digital channels are the first and easiest to switch off, due to having the shortest lead times. Moreover, traditional channels may be scrutinised as they come with higher price tags than digital without directly impacting the bottom line. However, pausing digital campaigns will interrupt machine learning cycles, making them less efficient upon re-activation. Furthermore, pausing offline media will also negatively impact share of voice (SOV) and brand awareness at a time when consumers are crucially searching for a sense of connection.
The question is, therefore, not whether to stay live or pause, but where should one focus marketing investment? The pandemic once again reveals the answer – it’s about achieving a balance in your marketing mix.
Pre-pandemic, there was a sense that balance had been lost: WARC reported back in March 2020 that brands should shift investment out of short-term sales and into long-term brand building. Brands that have successfully achieved this during lockdown include Tesco, Nike and Bumble, which have come out of it with a more considerable organic influence and customer base. So what do all these campaigns have in common? Notably, strong sales messages were retired in exchange for genuine, empathetic and realistic brand promises that pivoted on unity and a sense of togetherness. The winning strategy finds the equilibrium between long-term channel and KPI planning with short-term, reactive creative turnaround. This leads me to the next point…
Back to short-term planning?
At the beginning of 2022, we wrote a whitepaper on how long-term planning should sit at the centre of any successful digital framework. As we looked beyond the clouds, we argued for the end of pandemic-infused short-termist mindsets, which have jeopardised our ability to build business Strategies (with a big ‘S’) during COVID. But as marketing budgets are on the chopping block once again, is long-term planning the wisest approach going into 2023?
Yes and no. On the one hand, we now know better than to turn around monthly plans without preparing for the medium term. An annual laydown with approximate monthly budget allocation and channel selection will allow stakeholders to gain a sense of control over the unknown of next year. Whilst we must provide reassurance that every penny will be wisely spent, long-term planning doesn’t just provide comfort; it ensures that marketing budgets leverage competitor shortfalls and prioritise brand building.
On the other hand, constructing complex media plans in January for every month of 2023 will also result in creating V12 by next winter. As such, we must balance the long-term and the short-term, adopting the process of iterative planning. Detailed media plans with forecasts should span at most a quarter, as marketing budgets and objectives are prone to change due to Quarterly Business Reviews. Ideally, we’d provide several scenarios and metric forecasts presented as a range rather than a hard figure. The iterative part of the planning process comes from reviewing these forecasts monthly using the most recent campaign data. Regular reviews will, in turn, enhance accuracy month-on-month without overhauling the entire media plan.
Keep an eye out on the competition to lock in your edge
As market competition is directly linked to business performance, it would be foolish to overlook competitor strategies in such unprecedented times. Marketing tools like Nielsen and SimilarWeb offer competitor channel spend trends from pre-, during- and post-pandemic in addition to your business’s relative position among these. Studying such analyses enables us, the marketers, to identify media opportunities where we could create immediate impact without much fuss and those channels where the battle is not worth fighting. A key metric here is ESOV (excess share of voice), meaning the brand’s share of voice exceeds its market share. As a consequence of excessively inflating SOV, market share will also grow. Therefore, as competitors cut back on channel spend under financial hardship, brands can retain and even increase their SOV by purely maintaining their spend levels.
Empathy conquers all!
Particularly under stress, it is easy to prioritise one’s needs over those of others, although those ‘others’ will help you meet those needs of yours. Only by showing empathy in all communication touchpoints can we build mutually beneficial relationships and thus ensure that the whole is greater than the sum of its parts.
- Audience empathy: In recessions, people’s livelihoods are threatened. They experience a lack of control over their lifestyles, financial security, and family’s future. Suppose this fact is the starting point of your brand positioning. It immediately becomes clear why spending their depreciated capital on a luxury commodity is outside the top of the shopping list. To give customers what they truly need, brand creative must be re-positioned towards helping them navigate financial insecurity. The overall message should be, “I completely get how you feel (genuinely!); here is something that we have done to help you“. A recent example of a well-done campaign is Sainsbury’s OOH, which directs its existing customer base to use the Nectar app and reap the financial rewards within.
- Client empathy: Clients will be under heightened business pressure to achieve more with less, as proportional sale target reductions will unlikely accompany budget cuts. The appetite for media innovation and testing may be low due to the added uncertainty and risk of failure that these bring. Media plan sign-off may take longer, scrutiny may be higher, and at the end of the day, agencies may be asked to re-do the whole thing again. Being sensitive to clients’ positions will be pivotal to fostering long-term business relationships that will result in account growth when the recession is no more than a distant memory.
- Media owner empathy: As campaign innovation decreases, agencies may close their door to new media owners in an attempt to stick to their guns and prioritise tried and tested channels. On the flip side, media owners will try their best to slide into media plans by offering attractive discounts and added value. Even though a partnership does not come to fruition, it is important to at least entertain the possibility of a collaboration. So, remain respectful and open-minded, do not ignore outreach emails and keep scheduling lunch & learns – you never know when the opportunity arises!
- Agency empathy: The above manifestations of panic are often directed at the agency managing the clients’ media planning and buying. Whilst agencies will use all available data to predict customer behaviour and react swiftly to feedback, to maximise the relationship, all parties should look at working practices that minimise the stress on each party and allow each stakeholder to thrive, rather than just deliver. This can be successfully achieved through open and honest discussions with clients, and it is hugely appreciated and, therefore, highly recommended.
As I write, planning for the recession remains difficult. No one can say how disastrous it will be and when it will end. The only certainty we have, and can plan for, is that the future is uncertain everywhere we look. At the same time, we should not ignore our past experiences, for it is hardly ‘unprecedented times’, but rather allow them to pave our strategies for the years ahead and help avoid an unhappy new year.