Looking at the Covid-19 situation, the market is shifting in a lot of ways, as market forces are asserting pressure on organisational structures and practices to become more agile and reactive.
Looking at the immediate short term, most changes thus far have been brought about very spontaneously, including brands across the industry engaged in cost-cutting. This solution has been simplistic, effective and obviously aimed at preserving P&Ls to remain as healthy as possible. But there is a massive downside to this approach in the long run. Consumers will start to forget their favourite brands, and years of advertising investments that have gone into building brand equity stand to go to waste; that too in a relatively short period of time.
This, however, does not hold true across the board, as we seeing some brands really taking the initiative to adapt to the Covid-induced ‘new normal’. These players have adopted the process of digital disruption, not only across their organisational structures, but also in their allocation of media channels.
The use of ‘new’ media, such as audio, is picking up at an exponential pace in the form of podcasts.
Similarly, traditional media investments into radio have shifted from on-air platforms to radio channels’ social and digital platforms. Investments towards music apps such as Anghami are also on a rise due to an increase in media consumption, as consumers have more time on their hands.
E-commerce advertising investments are also soaring, driven by certain brands within the e-commerce ecosystem. The exceptions are brands facing logistical issues with their supply chains. In the long run, we see the marketing industry adapting itself, based on where consumers’ share of time will eventually be focused. Brands will continue reaching out to their customers. The volume of this outreach will largely depend on how macroeconomic indicators perform moving forward. Should we come close to a situation where these indicators completely fail, then there will not be any spending power left for brands to advertise.
Our clients, as well as our balanced, multivertical portfolio, have been critical to our survival of the crisis and have allowed us to prioritise firm objectives against clients’ potential growth, as well as the future recovery of any losses that are currently being endured. In terms of capabilities, our focus on digital has seen us take on a more structured planning, monitoring and operational approach. This was achieved through frequent training programmes aimed at converting teams of single-platform specialists into multi-platform experts. From a client perspective, the automotive, luxury and travel and tourism segments have had no room or little room to adapt to such unprecedented times. This was largely due to the impact of global and regional policies and regulations.
Supermarkets and pharmacies have seen tremendous growth in traffic and orders, so much so that they have struggled at times to maintain their logistics supply. Fixing the supply chain and partnering with third-party logistics companies has allowed them to leverage the increased demand and continue advertising at a high pace.
Government authorities, meanwhile, have focused their messaging on supporting the community and creating effective fundraising campaigns, resulting in robust campaigns that have witnessed some of the highest level of engagements we have seen to date. Traditional retailers have been reinventing themselves by shifting into fully equipped digital stores, through their own properties or by partnering with large global or regional e-commerce marketplaces. Their focus remains on performance channels through tactical promotional activities, aimed at winning over consumers’ temporary scepticism and getting them to spend.
Video-on-demand platforms (such as Shahid, Weyyak and Zee5), along with gaming entities, are gaining the most momentum, recording recordbreaking levels of content consumption and growth in their subscription bases. They can acquire at a lower cost than ever before and boost their customer lifetime value through the right content and app re-engagement.
At DMS we are working closely with our partners and publishers to gain a better understanding of the issues at hand and to draw clarity on how to navigate this evolving situation, with an aim of supporting our clients during this crisis. We have also started planning with our agency partners on how to help brands today and tomorrow from a variety of different angles. We have been trying to find solutions that will enable brands that have been affected to become active again once the pandemic subsides. We believe this will give us greater leverage once things kick off again.
At the same time, we are fairly clear that only time will tell and that the duration of this crisis will serve as the main factor in determining its long-term effects. If the situation clears up soon, businesses should be able to move forward with minimal losses, but if it persists, further re-evaluations will need to be made.