Pandemic Budget Strategy: Increase Marketing Spend, Go Post-Digital, Build Emotional Connection
Undoubtedly, the pandemic has made almost every one of us postpone, tighten or reconsider so many of our essential experiences, budgets and endeavours, both businesswise and in our daily lives. In order to withstand the crisis, companies had to sacrifice a lot. Not marketing investment though. One thing has recently become clear: increased marketing spend during the pandemic has yielded solid results. Sounds counterintuitive? Not to forward-thinking marketers. Read on to gain a deeper understanding of the specifics:
- Ramp up marketing investment for a “true turnaround of the business”. This is an example of how beauty giant Coty is reaping the rewards of increasing its marketing investment during the second quarter, with a focus on ROI driving activity across its key brands, as reported by Marketing Week. Coty increased advertising and consumer promotions spend to 30% of sales in the second quarter, in a bid to support initiatives with “strong ROI” that fuel “sales growth acceleration”. By comparison, marketing spend represented 26% of sales in the first quarter.
- Expand into white-space opportunities. Marketing investment can be used to expand into previously unexploited territories, new markets or categories, such as innovative digital channels or even the metaverse. Coty proceeded into prestige make-up and the Chinese market, where it grew at six times the market rate in the second quarter. Coca-Cola recently transformed its marketing model to launch more integrated campaigns that touch consumer passion points at speed. “Consumers respond to an entire experience – they don’t separate the message from the medium”, according to the company’s global chief marketing officer Manolo Arroyo.
- Embrace new digital technology solutions. According to Ogilvy, the relationship between digital engagement and company growth has never felt more intensely than during the pandemic: Customers waved goodbye to in-person interactions and embraced the online world. Lockdown measures and mask mandates also pushed more people to shop and spend more time in the digital world. Research from McKinsey has shown that organizations that experimented with and invested in new digital technologies during the pandemic are twice more likely to report improved revenue growth than those that didn’t.
- Move from digital to post-digital transformation. A study from Progress suggests that more than half (55%) of businesses that haven’t started the digital transformation process yet believe they have less than a year before they start to suffer financially and lose market share. This is because the way consumers want to access information is constantly subject to change. According to Ogilvy, missing that critical window for transformation, in the midst of new digital expectations, makes a company irrelevant in the minds of consumers looking for the next best experience.
- Invest in building an emotional connection. Now more than ever, the emotional connection that a consumer forms with a brand matters. The moment an experience fails to be personalized, seamless and attention-grabbing, they can turn to many other competitors. Today, customers often discover new brands outside of typical brand activation or traditional advertising channels. Research from Forrester reveals that 70% of emotionally engaged consumers spend two times or more on brands they are loyal to compared with 49% with low emotional engagement, making emotional connections a key driver for loyalty for years to come.
- Go full-funnel to stand out. According to Claire Russell, head of media at Fitzco ad agency, if companies want to build their brand over time, brand awareness and storytelling channels are key. David Song, CEO at Rosie Labs ad agency, adds that going full-funnel means you are literally in front of the consumer at every single possible area that that person might interact with your brand. As marketers, we know that businesses have mere seconds to grab the attention of a potential customer, so differentiation from the competition and ensuring that the consumer experience is as pain-free as possible is paramount to stand out in the sea of sameness.
In an increasingly crowded marketplace and a new era of pandemic-induced shopping habits, long-term growth lies in creating digital change supported by investment. Novelty Media, via SmartAdd, provides a truly transformative solution for brands to reach consumers where they are, in a human-centric manner, harnessing their undivided attention. Keep following our Marketing Bites to explore further industry trends and market insights.