WRITTEN BY KIRSTIN WILSON-JORGE, SENIOR ACCOUNT DIRECTOR AT KROW

EMBRACING DIGITAL FOR BRAND AND PERFORMANCE

When it comes to creating and delivering a marketing strategy, short-term activation and longer-term brand building should work hand in hand to deliver results. However, they’re often positioned as competing approaches, a perception problem reinforced by traditional ideas of channel effectiveness: brands can only be built using traditional above-the-line (ATL) budgets and methods, and digital is only good for performance and activation. However, as clients look to make every penny of spend count, these paradigms are no longer useful or accurate. Digital can and does build brands as well as drive sales.

A QUICK LOOK BACK AT THOSE 2020 BUDGET CUTS

Faced with uncertainty and lockdown, many advertisers and marketers paused or cut their budgets. Between March and June 2020 there was a 48% decline in ad spend,[i] with over half of businesses continuing to report decreased budgets in the third quarter.[ii]  By the end of the year there had been a 4.4% decline in ad spend as a whole.[iii]

But this doesn’t mean that everyone was pulling back; some companies saw opportunities. Some even increased budgets while their competitors slashed theirs: take, for example, Unilever’s £2.5m boost compared with Procter & Gamble’s £9.9m cut.[iv]

HOW SPEND PLAYED OUT IN THE REAL WORLD

What’s interesting is how the pandemic impacted the distribution of ad spend. Event-based marketing was dramatically impacted for obvious reasons, as was spend in traditional ATL channels such as cinema (down 80%), OOH (down 45%) and even TV (down 10%).[v]

This wasn’t the same for digital. As consumers spent more time at home, they spent more time online, whether connecting with friends and family on Facebook, learning a new skill on TikTok or joining Joe Wicks for a workout on YouTube. This created more opportunities for brands to connect with them. So, in the face of change, digital grew by an estimated 5% during the year.

MEANINGFUL CONNECTIONS OR MEANINGFUL SALES?

With budgets under pressure and the need to show that online advertising spend is being employed effectively, there has been an exponential growth in the need for immediate, measurable ROI. Naturally, this has led to a bias towards performance marketing in digital.[vi]

It’s a trap that some companies, such as Adidas, discovered before the pandemic[vii]. They were measuring efficiency rather than effectiveness – driven by KPI performance and focused on promotion. They recognised the danger of devaluing the brand and, longer term, they realised that they needed to connect with consumers and give them ‘reasons to believe’ in the brand. To do so, they had to free themselves from the old KPIs and look to new measures for effectiveness.

IS IT THE RIGHT TIME TO BE TALKING ABOUT BRAND BUILDING ONLINE?  

The latest AA/WARC Expenditure Report anticipates 15.2% growth in the UK’s advertising market in 2021. The 2021 UK ad market is set to rebound past 2019’s high (£25.37 billion) and reach £26.69 billion.[viii]

Of course, this assumes not only a smooth vaccine rollout and vaccine efficacy remaining high against new variants, but also an absence of Brexit-related disruption as cross-border trade increases. We hope to see a return to some form of normality for everyone heading into the second half of the year.[ix]

What won’t change is the penetration of digital. Online advertising activity is set to grow by an additional 12% in 2021, cementing its importance in the marketing mix.[x]

BUIDLING BRANDS BACK DIGITALLY

As well as keeping the nation’s children fit, Joe Wicks created the most-watched YouTube video in the UK last year.[xi]  This demonstrates how it’s possible to strengthen your brand online while letting your brand awareness help drive sales for the longer term.

To keep your marketing strategies in shape, it’s time to stop looking at digital and social spend as just a short-term impact and a performance marketing exercise, because it’s also just as capable of delivering the stamina that brand building needs – if it’s done well.

There’s often a lack of appreciation that the right video can be as impactful and emotionally engaging online as a TV commercial. After all, the consumers have a more intimate experience of the digital world: it’s not just the immediacy of being within easy reach 24/7, but also that one-on-one, two-way connection that successful brands can build online. The right creative and emotional approach will always have an impact.

Rational, proof-point-led functional messaging has a place, but the power to build brands comes from connecting with people in a personal and real way. Research by WARC[xii] reveals the strength of activation to produce strong uplifts in sales, but that short-term gain can be significantly outpaced by brand building’s longer-term gains. It may take longer to pay back, but when it does it’s often more generous.

THE POWER OF CONSISTENCY AND CREATIVE

As many businesses look to recoup their losses and get back on their feet, brand building is expected to see significantly reduced investment. But in an industry biased toward short-term performance marketing, especially in digital, brands that do invest in brand building will really stand out. The opportunity we see is that the right creative, in the right place and at the right time, will build powerful connections and lasting relationships between consumers and brands. It’s not surprising that the best-performing brands in the WARC Rankings 2020 focus on the longer term – balancing what is described as ‘consistency with creativity’.[xiii]

SHOWING CONSUMERS WHAT YOU STAND FOR

With a massive uplift in online video spend expected, we know there are brands out there which are going to be staking their claims in the hearts and minds of consumers. That investment should repay them in the years to come with market share as we know that consumers with an emotional connection with a brand are less price sensitive, have greater brand loyalty and are three times more likely to recommend and repurchase.[xiv]

So, as we move towards the ‘new’ post-pandemic world, helping potential customers understand what your brand stands for and reinforcing that message consistently will become critical for success. And, we believe, brands who embrace digital for both brand building and performance marketing will have the best chance of reaping the rewards of their investment.

If you’d like to find out how we could help your brand, contact newbis.east@krowgroup.com

 

 

[i] https://www.warc.com/newsandopinion/news/lockdown-sees-48-decline-in-traditional-ad-spend/43938

[ii] https://www.warc.com/newsandopinion/news/more-big-cuts-in-marketing-budgets-as-pandemic-continues/44258

[iii] https://www.groupm.com/this-year-next-year-uk-eoy-forecast-2020/

[iv] https://www.warc.com/newsandopinion/news/lockdown-sees-48-decline-in-traditional-ad-spend/43938

[v] https://www.groupm.com/this-year-next-year-uk-eoy-forecast-2020/

[vi] https://www.marketingweek.com/marketers-ready-next-chapter-advertising-connected-tv/

[vii] https://www.warc.com/content/article/adidas-makes-course-correction-on-marketing-effectiveness/129736

[viii] https://www.warc.com/newsandopinion/news/aa-warc-uk-ad-market-to-recoup-losses-in-2021/45603

[ix] https://www.thedrum.com/news/2020/12/01/what-we-learned-about-uk-ad-spend-groupms-2020-media-report

[x] https://www.thedrum.com/news/2020/12/01/what-we-learned-about-uk-ad-spend-groupms-2020-media-report

[xi] https://www.theguardian.com/technology/2020/dec/14/joe-wicks-video-most-popular-youtube-2020

[xii] https://www.warc.com/content/article/warc-exclusive/general-rules-on-how-to-balance-long-term-brand-building-vs-short-term-activation/132239

[xiii] https://www.warc.com/SubscriberContent/article/what-we-know-about-long-term-and-short-term-effectiveness/107155

[xiv] https://www.warc.com/content/article/what-we-know-about-consumer-decision-making/108516

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