As the pandemic clouds the future, marketers and agencies need to be agile and bridge their strengths
By Steve Levy
In 2020, our social culture shifted from a fear of missing out (FOMO) to a fear of going out (FOGO). Today, people share “air hugs” and send their kids to “Zoom school”. Since COVID-19 emerged, life and business changed in this outlier of a year. In the first five weeks of the New Year as the pandemic spread, we saw trends I’ve never witnessed in my career. Canadians reporting a threat to their personal health, finances and even the country, grew four-fold in this short span.
For marketers and agencies, these seismic changes have accelerated the shift to digital and added more complexity to the marketing mix. This makes it evermore challenging to plan for what may come next and what will stick.
These conditions showed up in our 14th wave of the Canadian Digital Marketing Pulse survey. We have shared our views on the “digital” world every year since 2006 based on an ongoing monitor of what client-side marketers and agencies are thinking and doing. Our objectives have consistently been to: measure familiarity and usage of digital marketing components/tactics amongst client-side marketers and agencies, gauge their sentiment on the current and future state of digital marketing, and integrate consumer perceptions.
In 2006, we considered 10 tactics under the digital umbrella. Over time, this number has changed and indeed some of the tactics have changed to reflect the market. In 2020 we considered fourteen tactics. You can see the full report on the Canadian Marketing Association’s website. We surveyed a wide cross-section of client-side marketers and agencies as well as 890 Canadians. I’ll review the highlights and spotlight some key findings here.
How COVID-19 disrupted outsourcing cycles
While almost everything in marketing these days could be perceived as digital, we have seen a pattern of agency dependency over the past decade that resembles a pendulum — where dependency swings back and forth between bringing tasks in-house on economic tides, outsourcing to agencies as headcount issues arose, and using a hybrid model.
However, in this pandemic year, marketers’ reliance on agencies (both digital and creative) plunged by nearly half (from 50 percent in 2019 to 28 percent in 2020). That was lower than any other year in the past decade. For a quarter of marketers, COVID-19 has fundamentally changed the way they approach digital marketing. A third went dark for the time-being and another third made a short-term pivot from traditional to digital. In this circumstance, there were some patterns associated with how marketers operated. Activities more core to their businesses (email marketing, website, social, branded content and SEM) were brought in-house — primarily to save money and time. Newer or more specialized tactics (eSports and gaming, wearables, programmatic, augmented reality and perhaps digital audio) were more likely outsourced with expertise being the main reason. This reinforces the specialized knowledge that agency partners can add value and growth.
Still, the opportunity for a hybrid model where clients and agencies work together remains. This means that agencies and clients must build dynamic partnerships to ensure they maximize the synergies between them.
How the pandemic and other factors shape the marketing mix
How digital components fit into the marketing mix depends on several factors, not the least of which is its perceived effectiveness. Six in 10 marketers rate their digital initiatives as effective and this is largely attributed to what has been happening at the top end of the funnel — increasing awareness.
When it comes to tactics and spending priorities, a few themes are playing out for marketers. Overall, we’ve seen a continuing shift away from “traditional media” with print taking the biggest hit. Outdoor media buying has also fallen since the onset of COVID-19 following two years of increasing familiarity and usage. Social apps like Instagram, online video and search are seeing the most obvious lift in spending intent. However, use of influencer marketing by agencies declined sharply, likely due to the growing lack of authenticity and concerns regarding new regulations. While some tactics are mainstay, the marketing community continues to hold its breath on more technical options – augmented reality, wearables and digital audio.
Social Media marketing has become part of the glue of marketing — it is pervasive among both agencies and marketers. This is in spite of negative press and bans we saw in 2020. And yet, among Canadian consumers, nine in 10 are very worried about privacy and security of their personal information, seven in 10 have not changed their social habits and just one in 10 consumers stopped using social media in protest of the lack of regulation. At first glance, these two sides of the coin just done seem to jive. However, we did see some change in 2020 — it seems that fewer consumers are joining or liking a campaign or sharing a product ad or information through a social networking site. This suggests that perhaps social is starting to become more a one-way engagement than it has been in the past.
Email Marketing, while arguably the most mature digital tactic, continues to be healthy. It is used far more frequently by marketers than agencies (81 percent versus 52 percent). This is partly a function of outsourcing and partly driven by privacy related concerns/needs. Most consumers say they’ve received promotional emails and nearly six in 10 claim that they have responded. But their willingness to receive email marketing is showing signs of fatigue with the plethora of messages hitting their inboxes during the pandemic.
Search is still a favored tactic for 80 percent marketers and 69 percent agencies. It’s trending up amid COVID-19.
Online video is another growth area with 78 percent agencies and 61 percent marketers using it frequently. It is a must component in the digital media mix now.
Digital Signage usage slipped this year, particularly among marketers. Just 39 percent of companies say it was in their marketing mix, down from 52 percent a year ago. No doubt a function of the fact that consumers are staying home. But with location-based technology, privacy concerns may also be a factor.
Influencer marketing also took a hit in 2020. Frequent usage by agencies fell from 44 percent to 36 percent with brands at 35 percent. With its close tie to experiential marketing and sponsorship, which clearly saw a downturn in the pandemic, this no doubt had a negative impact on the use of influencer marketing. But perhaps there is more to this downward shift. It seems that there are growing concerns about lack of transparency and, authenticity, fueled by some cases of outright fraud. Some marketers anecdotally express concerns about how little control they have over what influencers may say or do.
Augmented Reality was integrated into the Digital Pulse research program in 2018. Familiarity is small but growing for marketers and holding in the high twenties for agencies. Because of its high cost and uncertainty about what it provides in terms of ROI, it’s future as a growing tactic is questionable with a key question being whether AR is scalable. It doesn’t help awareness when this tactic is baked into other solutions that marketers aren’t aware of.
COVID-19 has had a massive impact on the marketing and agency world. As marketers and agencies gear up for 2021, we should expect budgets to continue to shift to digital accelerated by COVID with emphasis on short term.
While online video, email and social tactics continue to have momentum, marketers will need to better understand AR, wearables and digital audio in terms of where and how to use them and if they can become scalable. They also need to work harder to understand how to best make use of influencers. With this increasingly complex menu of digital tactics and speed of change, marketers and agencies will need to consistently evaluate and educate to get the most out of their investments.
Until a coronavirus vaccine is widely implemented, we’ll still face uncertainty. That will require ongoing vigilance and agility to pivot as necessary. Marketers and agencies that stay close to the consumer will have the best chance of seeing their efforts pay off.
Steve Levy is Chief Client Officer, Ipsos Canada. Steve leads Client Organization at Ipsos Canada. He is the author of (among other things) the Most Influential Brand Study (Globally), The Digital Marketing Pulse, and Developing the Long Middle story. Steve is a board member at the Canadian Marketing Association, a frequent public speaker and contributor to publications across Canada. He writes on marketing, loyalty and related topics.
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