Head of Strategy & Planning
It’s been two weeks since we sent out our original Coronavirus impact update and on Monday 23 March the Government in effect imposed home isolation on the UK population.
Our initial analysis, based on what we had seen from China, was that the two key factors that would impact client business performance were restriction of movement and perceived category need. With the public restricted to their homes, shops selling non-essential items closed and supply chains disrupted, the impact of COVID-19 on business will become more severe.
Our analysis uses data from the past week, the majority of this prior to the ‘lockdown’, mainly from the UK. Please get in touch if you’d like insights on other markets and reactive analysis of the most recent measures to further restrict movement.
More time at home has boosted TV viewing figures. For example, Wednesday's episode of the BBC’s early-evening staple The One Show attracted an audience of 5.4 million, significantly higher than the show's 3.1 million average. All4 has seen a 10% increase in streams in the past week and the Prime Minister’s address on Monday 23 March was one of the most-watched broadcasts in UK television history (source: Barb).
Digital device usage is also on the rise 38% with respondents saying are using their smartphone and 30% are using their laptop more. 32% reported that they’re watching more streaming services such as Netflix or Amazon Video and 21% that they’re using social media more – to keep in touch with friends and stay up to date with news (Source: GWI Coronavirus Research). Month-on-month traffic to news sites is also reportedly up by 16% (ComScore)
In our first update we reviewed some qualitative data from China as to the optimism of advertisers on ad spend and the impact to their business. We’ve since seen a UK study conducted by Campaign Magazine with more than half (53%) of those participating in a poll saying they thought overall ad spend would decline by 20% or more over the next six months. A third (32.3%) said they anticipated a smaller, but still significant, drop of either 10% or 15%.
Our experience is that impact remains related to category, but the number of categories effected significantly or severely is increasing, compounded by physical store closures. Some clients are still seeing positive results and we have expanded some PPC accounts into Google Shopping to encourage ecommerce sales. Many brands haven’t seen huge traffic declines; however conversions are down.
Over the past two weeks a number of brands have become more involved in purposeful response efforts. For example, McDonalds started by separating the two sections of the ‘M’ in their ‘Golden Arch’ logo to encourage social distancing, which was pilloried as a stunt. They then offered all NHS staff free hot drinks (before the closure of their restaurants).
Other brands who have moved positively and honestly to help are LVMH (producing hand sanitiser), Zara and H&M (face masks for medical staff), Pret (free drinks for NHS staff) and Guinness (£1m fund to support UK bartenders).
With consumer spend slowing and physical movement of people hampering supply chains, marketing budgets are being cut or pulled entirely. The reality is that consumers have their minds elsewhere, at best unsure of the future – at worst terrified; and it’s likely most activity will underperform in comparison to usual benchmarks in the current market conditions.
Therefore, it’s worth utilising tactics to maximise revenue in the short-term, where possible, and beginning to plan for the longer term. This virus will pass and the economy will return to normal, if dented.
We’ve updated overall recommendations based on the changing situation and seemingly inevitable stagnation of demand in most categories:
Review key brand and category terms daily for signs of declining consumer demand. To avoid unnecessary delays, define actions to take (reducing budget, stopping spend) based on parameters (search volume level, conversion rate decline, traffic decline). See below ‘What shall I do with paid media?’
Explore new terms, tactics and channels (if budget allows) around online purchase that may be growing, or to appeal to new consumers. Use conversion rate optimisation (CRO) and re-marketing to maximise revenue from those still visiting (see below)
Review audience behaviour: Review channels such as video and social that better follow audiences. We’ve been running regular social listening and search reviews for several clients to enable them to better understand and react to the changing landscape.
Define a contact strategy with current customers through owned channels such as social, CRM and content on how your business is responding
Plan for the future – utilise downtime to update content or make technical changes that will improve site performance in the longer-term.
Answer these questions to help you decide whether to continue or pause activity.
The natural instinct may be to pause, but does account data support that? Conduct a performance review before making any decisions. There may be pockets of activity which still have value or deliver on KPIs, even if the account as a whole doesn’t.
If you pause your activity but your competition remains on, there’s greater potential that you’ll lose share. It’s always worth conducting a competitor audit to understand their approach to the situation. This, alongside a review of your own performance, can help you make the right decision for your brand.
Through measuring activity in a broader framework, we can better understand the value of site traffic, and paid media, even if conversions are down. Reviewing bounce rate, time on site and pages visited gives a more complete picture of the impact of Covid-19. If your business relies on paid activity for lead generation, your competition is probably in the same boat, so if traffic to your site is still strong, use these alternative metrics to gauge whether those interactions are of value. If those coming to your site are in research phase, there will come a time when they can complete the action.
For as long as your site continues to attract traffic, you can capture data in order to remarket at a later stage. If you’re connecting with when they’re actively searching or consuming the content within your Paid Social posts, make sure that you build on this interaction and are reengaging with them at the point when the main account target is achievable once again.
In this time of uncertainty, be open and transparent with communication to consumers, particularly on the impact Covid-19 is having on your service. Making relevant, easy-to-digest FAQs available will inform users; reducing demand and stress on the customer service team. Open and clear communication helps set customer expectations and hopefully make users more empathic to the situation.
Finally, this is a great opportunity to focus efforts on optimisation to increase efficiencies in qualified user journeys. Improving experiences can mean sustainable improvements to performance without pushing money into paid activities. Start with an experience review and follow with optimisation and personalisation to aim for incremental improvements in recovery.
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.