The COVID-19 pandemic and global lockdown means that 2020 will stick in marketers’ memory for years and not for positive reasons.
Entire categories are effectively unable to trade, from travel to live entertainment, restaurants and coffee shops to “non-essential” retail, automotive to gambling connected to live sport. With no way to reach consumers or deliver products or services, many sectors have pulled campaigns and cut marketing budgets for the foreseeable future.
Two very recent surveys reveal the impact of the current crisis on marketing activity:
- In Marketing Week, 60% of marketers said they were reviewing ad spend commitments for the rest of 2020, 55% were delaying campaigns or putting them under review, and the same percentage said they had paused product or service launches.
- A poll of World Federation of Advertisers’ members reveals a third of brands expect to cut spend by 11-20% this year, while almost a fifth expect reductions to be up to 40%.
At this unprecedented time – with less to do and more time to plan – brave marketing leaders should focus on reviewing and reassessing the channels they use to reach consumers where they are now. Across the world, linear live TV is experiencing a boom and audiences not seen for years. In many markets, with the world’s population at home, audiences have grown by up to 30% or more. Movie theatres are shuttered, and public transport usage is down by up to 90%, so there’s a requirement to level-set and reallocate budgets to get the best value for money in this new marketing economy.
Marketers should also focus at least some of their energies on issues of transparency at this time – in media trading, marketing services, and contractual relationships. In taking stock of marketing investments, brand custodians now have the opportunity to be certain they have the right clauses in place in their contracts. They need to ensure that benefits generated by agency trading systems are returned and not retained by their media agency. They need to negotiate appropriate reconciliation of media campaigns and creative and production jobs. And they need to recoup any monies owed from unbilled media and aged credits. Marketers should also look to ensure that they have terms in place to verify where every dollar, pound, or euro is spent right across their supply chain. These practices, as a matter of routine, will allow marketers to reallocate budgets in the more immediate term to where their advertising spend can work hardest for them now. It will mean that they can properly maximise return on investment.
If your contract doesn’t do these things for you, it’s time to review it. It’s time to seize the chance to reassess the partners you work with, the value that they’re delivering, and their ability to work in partnership with you. Transparency should be a cornerstone – a foundational principle – of the advertiser-agency relationship. This key partnership needs to be run on a trust-and-verify basis.
Marketing leaders who accept this challenge and get their agency relationships right now – in media, yes, but also in creative, production, and the whole gamut of marketing services – will be in a much stronger position once markets and brands have weathered the current storm. The general busyness of business can get in the way of reviewing and renewing key relationships – of making sure contracts are up-to-date and reflect development in the evolving media and marketing ecosystem. I believe that courageous leaders can and should allocate a little of the time given back by cancelled or postponed campaigns to elevate transparency up the to-do list. This will be key to kickstarting activity stronger and being better able to drive return on marketing spend.