Head of Strategy & Planning
The past few weeks have seen rapid change, presenting marketers with a new and challenging landscape to work within. To help clients navigate this, we’re producing weekly updates, using updated research for insight. Please contact us to find out how we can keep your organisation in touch with changing consumer patterns and how these could help shape your digital response and recovery. Get in touch through your account manager or at firstname.lastname@example.org.
This week we see the start of stability as both brands and consumers emerge from the shock of restriction and begin to form new, adapted behaviours.
Global Web Index has conducted a second wave of COVID-19 research, showing changes as people adjust to life in lockdown (Wave 1 was fielded in 17 countries between 16th-20th March, Wave 2 between 31st March and 2nd April).
Levels of concern over the impact of the virus have grown; those ‘extremely concerned’ rose from 26% to 34%. Some 68% of those aged 55+ said they were ‘extremely concerned’, and concern was higher amongst parents (77% were ‘concerned’ compared to 58% without children).
Changes to the outlook on personal finances has evolved too; two weeks ago, 28% of the lowest 25% of earners were unsure of the impact of COVID-19 on their finances, which has now dropped to 12% as the picture under lockdown has become clearer. Those in the lowest income brackets are most likely to feel the economic impact and 33% say it will have a ‘big’ or ‘dramatic’ effect, although 55% still think it will have ‘little’ or ‘no impact’. Overall, 28% of the UK expect a significant impact to personal finance, compared to 59% who expect smaller or no impact.
The past few weeks have impacted intention to purchase in more categories, with a growth in intention to cancel or delay purchase in luxury items (up from 7.5% to 13.2%), home appliances (7.3% to 12.6%) and even day-to-day items (up from 11.2% to 13.6%). Travel remains hardest hit with 45% saying they have or will postpone travel plans. And 21% have delayed buying clothing.
The new normal is impacting the types of content people are looking for too; with 33% seeking out information on how to feel good or learn new skills, 24% on ideas for things to do and 17% researching financial advice – all rich content veins for brands. (Source: Global Web Index COVID-19 Research Wave 2, April 2020).
Some of the panic initially felt, which saw sharp increases in searches for items to freeze or around financial crisis have dipped slightly, and people are now exploring life in lockdown. Our proprietary search insight tool shows 100% or more increases in search volume over the past seven days for supermarket delivery as well as terms related to confusion around lockdown life, with terms like ‘are DIY stores open’ (+1845%) and ‘can I wash my car in lockdown’ (+33%) trending. And Google Trends data shows that interest for ‘loungewear’ skyrocketed in March and remains on an upward trajectory.
People are consuming more news (55%, up from 50% two weeks ago), 51% are streaming more (up from 32%), 38% using more social media (up from 21%) and 21% cooking more. On positive impacts of lockdown, 28% say they have increased exercise and 14% think spending more time as a family is a permanent change they will make. (Source: Global Web Index COVID-19 Research Wave 2, April 2020).
Life at home means TV viewing is rising and 40% say they are watching more broadcast TV. Almost half (44%) of 16- to 34-year-olds have increased their TV viewing, according to new research from Channel 4.
We still see some categories hit harder than others. Firstly the travel and hospitality sector were impacted and since the closure of physical stores, retailers are significantly down on revenue. Cath Kidston and Debenhams were the latest casualties, both entering administration on Monday 6 April.
A recent IAB poll in the US found that about three-quarters of advertisers thought the current situation would be worse than the 2008-2009 financial crisis. Most respondents reported already having made changes to their ad spending with a quarter saying they had paused all the advertising they could.
Finally, former WPP Chief Executive Sir Martin Sorrell shared his predictions on the ad market impact with Campaign: "Q2 will be terrible” he said. “Q3 will be slightly better, but we’ll see a sharp recovery in Q4”. Describing the downturn as a “V-shaped recession", reflecting the sharp decline and sharp return, he warned that due to the nature of the lockdown, the adage of brands "spending their way through a recession" will not apply.
There remains a mixed picture; Ipsos MORI research reported that consumer confidence hit its lowest level in March since the 2008 financial crisis. However, not all sectors are impacted equally and, due to the unique nature of the downturn, recovery is likely to happen before the end of the year.
We still recommend clients create a plan for this period, adapting to advertising in an economic downturn and the changes this brings to consumer spending patterns. We believe insight on consumer and market patterns is vital to create effective marketing plans now and when recovery begins.
We believe that moving too slowly in digital is the biggest risk your business faces. If you are ready to move faster in digital, we are here to help.