November 10, 2020

What do challenger brands need to do differently in the new normal? Part 1. Support your brand & strive for growth

As our clients plans for 2021 begin to take shape, the impact of COVID-19 on our recommended approach and initiatives is evident. Accelerated digital adoption during periods of lockdown has changed media consumption and purchasing habits and advertisers need to continue to adapt the changing context; - Digital behaviour is significantly still more prevalent than pre-COVID- Enders Analysis expects the 2020 online share of retail spend to claim 25%-27%, up from 19% in 2019 (peaking at 30% in April)

The growth of challenger brands online this year is a familiar story, but the challenge is how best to deliver continued growth into 2021. Increased first-party data has provided advertisers with more opportunities to nurture customer relationships and grow revenue, but there are some fundamentals which advertisers should not lose focus on if they want steal market share from competitors. Whilst the wider context for 2021 remains uncertain, challenger brands can start to build for growth now in four key areas: brand awareness, incentivising customers, creative/messaging and making their data work harder.In the first of our series, we explore how brand-building and performance activation work hand-in-hand – it’s not an “either/or”, it needs to be an “and” scenario.Globally businesses are rapidly coming to terms with the fact that ‘business as usual’ no longer has the same meaning. Consumer behaviour and sentiment have changed drastically because of the virus and in general people are having to adjust to a new reality, all of which make marketing for a consumer facing brand more challenging. With online commerce becoming a necessity, there is an opportunity for both digital-native brand and legacy brands to rethink how they reach this new online audience and steal market share from market leaders.

Plan for the long term

The ability to manage the brand positioning and anticipate these consumer needs in a rapidly changing market will be the key to driving success during the pandemic and beyond. The effects of brand building are more apparent over a longer term period and therefore starting to focus on brand awareness alongside activation could not be more important than now.This is a long-term job involving repeated exposure, so it can take time and results aren’t apparent overnight. With brand building, advertisers are talking to people before they are in the buying stage, which is why it requires broader reach media - away from search engines.  This way it is priming people to be ready to shop, whether they are shopping right now. Because the effects of brand building are more apparent in the long term, thinking short-term can be a risk and drive inefficiencies and long term decline. However research into marketing effectiveness shows that in the long run, brand effects are the main driver of growth with repeated exposure over time; activation delivers an immediate and direct impact on growth, but they decay away very quickly.

Brand building and activation effects are not generated by marketing campaigns in the same way across time.

Don’t go dark

We have seen lots of companies trimming ad budgets or pausing campaigns indefinitely however now is not the time to go dark. Quite the opposite – the fundamentals haven’t changed - paid media still matters in driving brand growth and share of voice.This has been reflected across several brand building channels e.g. Video (YouTube) and Social (Facebook) where we have higher efficiencies across CPMs/CPCs due to the volume increase in usage and other brands pulling back on spend. These efficiencies cannot be underestimated and should be viewed as an opportunity to gain low-cost’ share of voice which could be key for a post-pandemic bounce back for brands.Historically, we know that share of voice has driven a higher share of market. Research has also shown that brands with a high share of voice relative to their size tended to grow, while those with low share of voice tended to shrink.

Brands need to know their share of voice in market, and then be strategically smart with media spend and channel selection to ensure they maintain that market position – this starts with brand building.

Cultivate your brand: Be digital first and drive emotional connection

With the abundance of online choice, advertisers need to build or refresh the memory structures as identified by Byron Sharp. With brands competing for the same audience, the focus needs to be on getting noticed to grow mental availability. By cultivating a digital brand through a digital-first approach, advertisers ensure their brand is visible at the right time, by the right person. Brand awareness can be described as ‘the degree of consumer recognition of a product by its name’ and digital planning should be an essential part of driving consumer recognition.Brand building campaigns work best when they get people talking and sharing, because brands are partly social constructs. A classic example is this online video by Pizza Hut Delivery 'Now That's Delivering' which has gained 7.8m views, thousands of shares and social engagements too.This campaign was focused on an authentic and long-term growth strategy, rather than planning for the short term - with brand driving channels focused on social, video and display to drive awareness. Done effectively, social media can drive engagement, help build brand loyalty and drive direct-to consumer sales. Video both on and offline is one of the most effective brand building channels and can work hand in hand with display to drive effectiveness.

Purchase decisions become about more than just the product itself and sit on an emotional connection that we have with our favourite brands. If an advertiser’s actions and brand response in a disaster don’t align with the brand positioning overall, advertisers risk losing the respect of their customers for good. Companies need to resonate with customers and remember that people will remember what roles their favourite brands played in times like these. Some examples of brands responding to the pandemic in a way that helps others:- Palmer’s repurposing its manufacturing to produce hand sanitizers during a time of overwhelming need- Pizza Hut offering NHS workers 50% off all takeaway orders as they face increased pressure in hospitals- McLaren used their engineers to help UCL with building additional and much needed ventilators during the pandemic

Review existing measurement frameworks

With the impacts of brand-building delivered over time, the sales and revenue KPIs typically used by advertisers aren’t suitable to measure the effectiveness of brand awareness channels. Investment in attribution can help identify the impact on overall business sales, but for advertisers new to digital and unable to commit to such investment there are other frameworks which should be explored to gauge media and brand effectiveness as a starting point. Whilst there is uncertainty on what Q4 and 2021 looks like, and the pandemic has raised more questions than answers, now is not the time to sit back and wait to see how things unfold. There are obvious changing consumer contexts and decision making is likely to be affected, however this creates opportunities for brands to act in a time of crisis:- Strike a balance between planning for short and long term - Align your brand purpose- There is an opportunity to gain a low cost share of voice- Digital planning is essential for customer recognition and brand driving- Support and measure brand effectiveness with tracking tools.

Read part two in the series here.

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