Because of the COVID-19 outbreak around a billion people have been staying at home for the past few weeks. And because customers are not actively out and about, their demands and behaviour is changing by the day. While the situation has brought an expected growth of some product categories, such as bread machines, weights and toilet paper , many others are facing lower demands for their products and services. Coupled with the rapid income decrease for some customers and declining brick-and-mortar visits, many marketers are forced to re-think their strategy and their current marketing effectiveness models.
Digital is accelerating
Now that people spend not only a big portion, but most of their time on their mobile or desktop devices, digital marketing spend will accelerating in the next few months. However, the shift is not as simple as just pouring the same budgets from other channels into digital ads. Marketers use digital attribution models to take decisions about investments in digital channels, but in the past few months consumer behaviour has been drastically different, even erratic at times. That’s why the relation between click rates and open rates and sales is not as straightforward as it used to be. Historical data and insights may be used as a starting point, but online activity is increasing and click-to-sale ratios are falling. Basing allocation decisions on data before the pandemic might even be counterproductive, if these new effects are not analysed in detail. Fine tuning and detailed evaluation are crucial, as the competition is also ramping up spend on digital channels.
Traditional marketing mix models will need fixing, too
Planning spend in traditional media is less flexible than digital media planning, so the reevaluation of channel spend has to be done as soon as possible. Marketing Mix Models, which calculate optimal channel budget allocation for maximum sales tend to look at weekly inputs from the last couple of years. However, relationships and insights from a year ago are based on drastically different consumer habits and will be unable to forecast the dynamic changes in the current situation. This is why it is crucial to combine accurate dynamic data analysis with business understanding and in-channel optimisation. This will allows marketers to proactively address the underlying market changes and will be able to lead rather than follow in these tumultuous times.
Fight the unknown with better insights
There are so many uncertainties currently that it’s hard to forecast global developments in a few months and even years from now. Most possibly, some of the changes in people’s shopping and spending patterns will remain even after people go back to most of their usual daily routine. Some product categories will continue to witness decreased sales volumes and conversion rates for many months.
Making the most out of your marketing budget will be a key prerequisite to stand out from competition, win back the lost volumes and most importantly – customer attention.
That’s why it’s crucial to take channel decisions based on solid data insights and business understanding.