Paul
Talbot Contributor Mar 19, 2020,11:35am EDT
Along with the rest
of the world, marketing teams continue to cover new ground and confront
unprecedented challenges triggered by the coronavirus pandemic.
I recently asked
Kathy Bachmann, GM of Americas with the consultancy Analytic Partners Inc., to
share her perspective on some of the strategic issues marketers suddenly find
themselves addressing.
Paul Talbot: There is an
assumption, and in some cases for some products, a reality borne out by data,
that online sales are spiking while offline sales are sagging. How should
we put this scenario in proper perspective?
Kathy Bachmann: A clear shift
to e-commerce has impacts across the organization, from supply chain to
resourcing to marketing. The health crisis seems to be driving larger basket
sizes for offline retailers as households stock up and would further push the
trend that many of our clients are already seeing with consumers switching to
online purchases.
Talbot: Marketing mix
modeling… is it reasonable to expect that some current mixes will be under
review and potentially significant changes made?
Bachmann: We’ve already
been working with clients on modeling scenarios for marketing investments
considering the spread of Coronavirus through our LIVE Model framework that
allows for ‘real-time’ insights as data is made available.
The Coronavirus is
impacting consumer mobility, shifts in media consumption habits, supply chains,
such as shortages of and concerns over goods manufactured in China and economic
volatility.
With this dynamic
situation, companies need to plan their next marketing moves wisely to either
mitigate downside risk or capture all the upside that’s possible.
Some advertisers
should hold dry powder while others should double-down on marketing investments
to seize opportunities. It's crucial for organizations to pay attention to how
this situation is altering the landscape and plan scenarios accordingly, rather
than wait and hope that no changes are necessary.
Here are some
examples of the types of shifts we’re seeing and expect to see in marketing
approaches and investments:
·
Directing investments toward marketing tactics that drive online
sales.
·
Reducing marketing investments on campaigns to drive short-term
sales or business outcomes, while keeping brand-building campaigns live –
essentially saving dry powder.
·
Shifting budgets to promoting at-home and delivery-based options
(i.e., at-home fitness solutions/equipment/apps, grocery delivery, restaurant
delivery, etc.)
·
Shifting focus from promoting premium products to entry-point or
everyday items.
·
With sporting events being cancelled or played without fans,
many advertisers are formulating new plans for those budgets – often holding
the investments for later use – or scenario planning for how to redeploy their
dollars if a large advertising event such as the Olympics is cancelled or
postponed.
·
Fine-tuning media allocations by tactic as we experience
demand-driven price fluctuations in various media channels. Changes in media
supply and demand will impact costs, so we anticipate marketers will need to
closely manage certain spending areas, such as digital, with refreshed ROIs on
new cost levels.
·
Tracking data in local geographies that experienced varying
levels of impacts.
·
Using trends social sentiment and google query volume on
relevant key words as indicators to inform marketing actions.
·
Building in quick response learnings to optimize marketing
budgets and transfer learnings across markets.
·
Measurement of custom creative addressing the viruses.
Talbot: The
disciplined marketer who is determined not to overreact, but recognizes the
need to make adjustments to respond to shifts in consumer behavior driven by
the coronavirus outbreak… what questions should this marketer be asking and
what data should be considered?
Bachmann: In a crisis,
it is necessary to ask: What advertising messaging is appropriate and how do
you most effectively engage with customers during the outbreak? How can
you leverage analytics to understand and meet their needs?
Data surrounding
consumer behavior, spending trends and channel effectiveness should all be
considered, as well as crisis-specific information.
Talbot: How should
the strategic marketer make the distinction between a short-term sales spike
and a longer-term sales trend?
Bachmann: While
organizations are working to adjust their output against short-term consumer
demand, many marketers are working to adjust their plans for longer-term
projections.
Some expect that
consumers may not return exactly to their prior habits when the outbreak has
passed. When faced with disruption and uncertainty, we recommend
leveraging advanced analytics to support decisioning and reduce risk that can
be run against a number of possible scenarios.
We leverage our
decisioning tools and through scenario planning and optimization, so our
clients can weigh short and long-term implications and better meet their
customers’ needs, given a range of outcomes.
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