The best way to predict the future is to create it. This starts with taking control over the situation rather than merely responding to it.
The current crisis has put immense pressure on marketers by forcing them to achieve more with less. Many budgets are reduced and the automatic reflex is to move the investment to lower funnel, digital activity which is measurable and transparent.
This logic is sound and we’re indeed seeing a double-digit growth of e-commerce activity with both market disruptors and established brands embracing the direct-to-consumer opportunity. However, this doesn’t remove the need for brand building in a post COVID-19 world. Quite the opposite - as the traditional distribution channels are no longer able to drive growth, many brands need to either find entirely new audiences or re-educate existing customers on how to buy their products online. Therefore, the challenge is – how to build both brand and drive performance with limited resources?
This is exactly where we get stuck as many marketers seem to be constrained by a binary choice between brand and performance. The analogue way of planning and executing marketing remain as entrenched as ever and COVID-19 has fully exposed its fundamental flaws. The paradigm based on volume of impressions (brand) vs. conversions (performance) with siloed channels underpinning each, stubbornly persists and limits the choices available to marketers. To complicate this further, some digital advertisers retrofitted their value narratives and based them on metrics such as viewability or reach. Now that audiences are ubiquitous and mobile video is a mainstream medium, brands feel an ever-increasing pressure to be visible everywhere. Consequently, what was traditionally one campaign has now evolved into 20 different ones, trying to achieve various and often disjointed objectives. And since we have the ability to measure everything, everything needs to be measured. As a result, we constantly see and measure noise – everywhere and nowhere, measuring everything and, in the end, nothing.
So, what is the solution then?
Here at Dentsu, we believe that the COVID-19 crisis, as all crises in fact, presents a unique opportunity to reset and rebuild for the future. We need a new, agile way of thinking, planning and executing. Our Post COVID-19 Media Playbook outlines a 3-step approach to transforming your marketing and pivoting to the future. Most importantly, it is based on a gradual, bottom-up evolution rather than a top-down revolution. For example, marketers should start by assuming that all media, at some point, will be addressable and bought in a biddable auction. Based on that premise, marketers can “walk back” to their current position and see which parts of their marketing strategy are future-ready and which are not. Running efficiency analyses to determine the point of diminishing returns for each channel is the next step. From our experience, clients tend to overspend on average between 20% to 30% per channel (direct result of channel-based planning and top down spend allocation). By isolating the addressable, digital channels, it’s possible to zero in on the accountability (ROAS) and impact from marketing investments on the bottom line.
Since most marketers’ budgets are already moving to online, everyone should approach planning with a digital-first mindset, using traditional channels to complement rather than drive the overall communications strategy. As the true digital-first brands and direct-to-consumer disruptors prove, success is achieved through a singular focus on ROAS.
This brings me to another point - knowing what to measure is the single most important thing, since everything is measurable, and the ultimate success is a consequence of this single decision. Media metrics, such as impressions or click-throughs, detract from what’s truly important and obscure the often-difficult reality of business performance. Measurement and KPIs can be drivers of sustainable business change, and a focus on true performance helps to clear the noise.
If the industry begins to approach the transformation challenge from the bottom-up, we will arrive at a point where the transformation becomes an output, rather than the often-seen, top-down mandate. It’s a more sustainable and impactful way of transforming the marketing function and one which finally may overcome the ever-present tension between brand and performance.