Cautious optimism for 2021

Blog Ronald Jansen – Consulting Partner

Every year, we conduct our annual Brand Growth Study in partnership with Adformatie and MarketingWeek to monitor the developments in the marketing industry. 2020’s edition revealed what the impact of Covid-19 was on marketing. Naturally, we will be conducting the Brand Growth Study again in the summer, but with countries in the second, or even third lockdown, we wanted to know how marketers view the brand-new year.

Marketing during the previous lockdown

The main effects of the first lockdown in 2020: budgets were under pressure, media planning reversed, campaigns put on hold. It might not have been a total panic, but it came close. Towards the summer, things got better, or so it seemed, but it soon became apparent that the winter had other plans: a second, or third lockdown. Even stricter. Schools closed, restaurants and shops closed, no trips, working from home.

Through the Brand Growth Study and the periodic DVJ Insights’ Covid-19 measurements, we learned what to do (and what not to do) with strategy and campaigns. Some brands adapted their logo. Some brands changed their purpose and decided to be understanding. Without citing all the examples again, there is a danger in that. Many marketers felt the need to let go of the core of marketing and communication. Recognition, being recognised, and carefully build brand values ​​got left behind. Campaigns also changed. In one of our DVJ Covid-19 measurements, we tested a number of these campaigns that responded to the crisis. As it turned out, using such momentum can be a way to generate more attention and become more relevant as a brand. However, the impact on the brand was not necessarily better, as many advertisers cannot link corona content well enough to consumer’s existing memory structures. It doesn’t mean that adapting creatives is useless, but marketers shouldn’t lose sight of the core of the p of promotion: it must strengthen the memory structures, as well as having a strong brand linkage.

Why gamble if something works if you can research it properly?

You would say that research should protect marketers from this pitfall. If you allow yourself to be distracted by the momentum too much, research could prevent a lot of trouble. However, in practice, we see that many campaigns are not pre-tested, and the pre-tests that are done are, to say the least, methodically not well designed. These are often carried out by priming respondents with a creative. After seeing the creative, people are asked what they thought of it, and yes, that results in certain scores, often provided with a benchmark. What is not taken into account is ad avoidance, a phenomenon that has been academically studied for years. DVJ Insights used this knowledge for our unforced exposure technique: respondents can avoid a TV commercial, just like they can at home. Without going into detail, this immediately gives a more realistic insight into whether the creative approach can stand out. And whether feedback reaches an advertiser. It is precisely these things that matter in a time where marketers, driven by the situation, decide to abandon consistently built recognition.

What to expect of 2021?

Back to the Mini Brand Growth Study in partnership with Adformatie: 244 marketers filled in the questionnaire, and the most important finding is that people are cautiously optimistic about this year. 48 percent of those surveyed say they are hopeful about 2021, while 39 percent expect it to be “business as usual” again after the summer – also in terms of marketing. A minority, but still 29 percent, expect that 2021 will be a more difficult year than 2020. You might expect marketers to be more relaxed in this second lockdown, but less than 1 in 5 marketers indicate this.

Lockdown, revenue down

Many marketers indicate that revenue is decreasing due to the current lockdown (41 percent), but that is already less than with the 2020 Brand Growth Study when 52 percent saw a revenue decrease as a result of the pandemic within the current financial year. And these figures also provide hope: 34 percent say that revenue will remain the same (BG2020: 26 percent), and 23 percent predict an increase in revenue (BG2020: 18 percent).

Figure 1 Effect current lockdown on revenue

Next to that, the impact of the current lockdown on the marketing budget appears to be limited. 54 percent of marketers say the budget remains the same (BG2020: 42 percent), 24 percent see the budget decrease (BG2020: 44 percent), and 17 percent say the budget has increased (BG2020: 14 percent).

Figure 2 Impact current lockdown on marketing budget

Media and campaigns

We see larger differences in the media planning, which will be changed considerably: 70 percent of marketers will make adjustments this year (BG2020: 63 percent). But that does not mean that budgets are put on hold. 55 percent say they will invest more budget in media this year. Despite all the risks, just over half of marketers plan to adjust campaigns to the developments surrounding the crisis. 37 percent say: “I think it is a good idea to let creatives respond to the current situation” (that percentage was much more in the BG2020: 66 percent). And, despite all the wise lessons from people like Les Binet, 36 percent still say they will steer their marketing efforts more in the short-term.

Other results…

Revenue 2020

• 34% of marketers indicate revenue increased in 2020 (BG2020: 46%)
• 39% of marketers indicate revenue decreased in 2020 (BG2020: 26%)
• 21% of marketers indicate revenue remained the same in 2020 (BG2020: 20%)

Investments

• 54% of marketers will invest (more) in e-commerce (BG2020: 56%)
• 58% intend to invest in an existing e-commerce platform (BG2020: 47%)
• 32% intend to invest in a new e-commerce platform (BG2020: 29%)
• 21% intend to invest in marketplaces (BG2020: 17%)

And…

• 23% of marketers spend more time on marketing and literature
• 19% of marketers have started listening more to podcasts
• 31% has adapted the organisation to the current circumstances

In summary, we see that most marketers adjust their campaigns. More than half are talking about an increase in budget. Despite the lockdown, Marketers feel the need to remain in the consumer’s sight. That is a good thing. But at the same time, it is expected that this should lead to short-term results. And we now know where that can lead to; Les Binet has already shown that directing sales in the short term can have consequences for brand building in the longer term.

Next to this study, DVJ Insights organises workshops on how a marketer can best deal with the current lockdown. We share learnings from our annual Brand Growth Study on what makes marketers successful and what doesn’t. We support our clients with brand and positioning issues, and with RealityAnalytics we can very accurately and predictively tailor the amount of media input to brand and revenue development. And as stated for the group of marketers who want to respond to the situation, we work with the best pre-test methods to ensure that adapted creatives continue to comply with marketing laws and thus continue to realise impact. More information can be found here.