Insider’s Corner with Peter Rosenwald: Listen and Learn
Are you keeping up to date with the latest marketing news?
In this issue of Insider’s Corner, our industry expert, Peter J. Rosenwald, shares some of the articles he’s been reading.
Read Peter’s previous post to find out why it’s the perfect time to plan.
Listen and Learn
As we sit with our engines idling, it is perhaps a good time to scan some of the best marketing thinking that’s been published during this enforced activity hiatus and consider how it can inform and impact your next marketing actions. What we all can be certain of is that tomorrow is most unlikely to look anything like yesterday.
Reflecting on this, it seems useful to summarize some of the best marketing intelligence that has appeared recently both about the likely future of our businesses and ‘learnings’ you may find surprising and useful along with links to delve deeper into the subjects that most interest you. It’s all intended to get you smartly back on the road as the economy opens up.
A comprehensive study prepared by PwC and just reported in Financial Times details danger signals for the economics of the online advertising and marketing industry. It asks why, “publishers receive just half the money spent on their digital ads by premium brands such as Unilever and Nestlé, according to research which lays bare the fees taken by adtech companies and untraceable middlemen.”
This situation, very worth watching, is reminiscent of the turmoil created to marketing agency incomes three decades ago by the rise of media agencies and their voracious appetite for ever bigger slices of the formerly sacrosanct fifteen percent agency media commissions. The rise of service providers involved in programmatic advertising with their magic technologies and algorithms are a growing challenge to the future size of slices of the marketing pie. If you cut the pieces too small you end up with nothing but crumbs.
Rethink Your Budget
In this topsy-turvy atmosphere, our task will still be to direct marketing actions and spending where it is likely to be the most effective. And if evidenced by the fact that according to SFWP Experts, an award winning web design company, “US ad agencies lost billions of dollars due to the pandemic, their revenue dropped to 10.6%… Whereas…digital media consumption is increasing because consumers are spending more time at home…out of home advertising is affected badly because people are staying at home and advertisers are not showing interest in publishing any new ads until the impact of COVID19 reduces.” Read more here.
With that as a frame of reference for the likely short- and medium-term future, re-budgeting your marketing spend becomes critical. It is something you can do now on a speculative basis. This new budgeting ought to reference these important stats1:
- The US Small Business Administration suggests 7%-8% of your gross revenue should go toward your marketing budget.
- While the digital marketing budget averaged 42% of the overall marketing budget in 2019, that’s expected to jump to 45% in 2020.
- Taking the lead in the digital marketing category is video marketing. Video marketing will double what it was from 2016 to 2021.
- The use of social media ads will get 25% of the digital marketing budget in 2020.
Changing Consumer Behavior
While it is always fun to brag at the pub about the splendid TV commercial we have just made, how many eyeballs it has reached and its chances of being honored at Cannes (if there is ever another industry event at Cannes), it is worth remembering that even after having been cooped up for a long period, consumers are unlikely to indulge in splurge spending as soon as they can get out the door. Rather, with the awesome number of jobless, consumers are likely to rein in spending, at least for a while.
“This pandemic is altering consumer purchasing behavior, although it’s too early to tell if the change will be permanent,” said Linda Dupree, CEO of NCS.” Read more here.
Counter-intuitively, Citicorp researchers argue that “older generations … spend more on experiences, such as in the U.K., where those 50 and older spend more than twice as much than persons 18 to 49, while in the U.S., that peak spending on movies, shopping, travel, etc. occurs between ages 45 to 54. And spending stays elevated over the mid-50s to mid-70s range.” Read more here.
Video Tops Priority List
Accepting that we are all trying to rally in the unknown, the bright spot at the end of the tunnel is exciting video using the best data for well-targeted social media exposure and creative, well-tailored to multiple audiences. It is the right-now way of creating narrative excitement and reminding customers and prospects of your brand without having to mortgage the farm. It appears to belong at the top of your priority list.
As video maker Biteable cautions, “Remember that certain types of videos seem to perform better on social media, but what one audience likes won’t work for everyone, so when you’re trying to decide what video ideas might work best, don’t be afraid to mix it up and try different things to see what your audience responds to.
Try New Things
If you take some time to listen to what others are saying right now, you may find ideas you’d like to test yourself. Success in all direct marketing comes from testing different formats, testing different appeals, testing different offers and testing different creative treatments. When the road really opens up again, an abundance of market knowledge and successful testing of the right data will help you shift your idling engine into high gear.
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