4 Smart Advertising Strategies During The COVID-19 Crisis
Total global ad spend is down $20 billion from the beginning of the year. Here's how cannabis entrepreneurs can pivot their ad dollars to have the biggest impact.
Many advertisers are experiencing sharp declines in revenue due to the worldwide economic downturn caused by COVID-19. While 70 percent of the global population is spending more time on their mobile devices due to mandatory lockdowns, ad revenue in the U.S. has dropped by 17.2 percent.
Interactive Advertising Bureau, an online ad industry trade group, conducted a poll surveying 400 cross-industry ad buyers to measure the pandemic’s effect on advertising plans. About 25 percent of the polled respondents stated that their advertising budgets for the second quarter of 2020 had been completely eliminated.
Another 46 percent admitted to reducing their ad spend with total digital spend for the period March-June projected to decrease by 33 percent. Total global ad spend is down $20B from the beginning of the year, reflecting measures to drastically adjust budgets or slash them completely.
Industries experiencing advertising downturns
While the story is not the same for every company, there are industries that are more affected than others. When it comes to the global hospitality industry, airlines, cruise lines, hoteliers, car rental companies and casino promoters have come to a complete standstill. In 2020, global travel was estimated to contribute $711,944 million in GDP, however, that has been adjusted to $568,583 million, which is less than the 2019 total of $685,065.
Additionally, according to Neil Patel, conversion rates for industries such as agriculture, construction, e-commerce, education, energy, finance, insurance, manufacturing, real estate, retail, software/technology as well as telecom and transportation have all suffered decline since the pandemic. Due to this, many small and mid-size businesses that have traditionally leveraged digital advertising to attract new customers are drastically reducing their ad spending as they struggle through lower conversions driven by customer fear amidst economic uncertainty.
Analyzing advertising costs before and during COVID-19
As fewer advertisers compete for advertising space, advertising costs across industries have steadily decreased. Global CPM (cost per 1000 impressions), when measured across 18 industries in Q1 2020 was $0.81 when compared to Q4 of 2019 ($1.88).
Advertisers targeting customers specifically on Facebook have also experienced significantly lower ad costs. In March of 2020, advertisers paid $0.09 on average per click, compared to the beginning of the year when the cost was $0.11, representing nearly a 20 percent reduction in the first quarter alone. While advertising costs are indeed becoming cheaper, capitalizing on declining ad costs will require a strategic marketing effort with a message that speaks to your target audience in a way that meets their needs during the present time.
How to manage a successful advertising campaign during COVID-19
Given the new climate, brands and businesses alike will need to evolve their Facebook advertising campaigns to reflect solutions that meet the current needs of consumers. Below are a few strategies that businesses can implement to immediately leverage the new advertising landscape.
Understand that the consumer wants to hear from you during this time
While many advertisers may believe consumers do not want to be bothered during a time of crisis, the opposite is true. Consumers do not think that brands should stop marketing during the COVID-19 pandemic and actually want to hear from their favorite brands. When surveyed, over 77 percent of respondents said that they want to see advertisements that explain how the brand is providing value and being helpful during this challenging time. These consumers are looking for solutions and are willing to give brands an opportunity to earn their trust.
1. Focus on serving first and selling later
If your marketing was converting a few weeks ago and is now falling flat, the problem isn’t your strategy – it’s your messaging. Given the current climate, prospective customers are not focused primarily on accomplishing goals, relationships, prestige, or social class. Many people are afraid amidst the current uncertainty and are looking to address their basic psychological needs of food, water, warmth, safety, and rest. This is the framework of the basic human needs that was introduced by Maslow in the Theory of Human Motivation, published in 1943.
Focus on fine-tuning your marketing message to speak to prospective customers where they are right now. Address their current state and find ways to help them meet their most urgent needs.
As you provide immense value and become a resource your customer can trust and depend on, the life cycle of the customer journey begins. Over time, you can introduce products and services that will facilitate a move up the hierarchy but only after you’ve addressed and assisted in sustaining the essentials.
2. Add and nurture new leads via email to remarket in the future
If your business is service-based, local, or online, then it is likely that you send emails to engage your customers. As businesses have been forced to slow down operations or shut down due to the pandemic, the time has never been better to shift your email marketing strategy from sales-focused to value-based communication that targets nurturing both old and new subscribers. Email marketing has been shown to have an ROI of $44 for every dollar spent on advertising. Leveraging lower advertising costs, you can create an email list building campaign to attract interest in your brand and increase subscriber signups to your customer database. By building a new target audience, you will have the opportunity to remarket to them in the future, which has been reported to increase conversion up to 51 percent.
An example of this strategy would be companies that sell physical products. Are there any tips you can share that will help customers achieve similar outcomes that your product would yield even if they cannot currently afford to buy from you? Focus on helping people at this time by providing solutions. In the future, you can offer your product as an ancillary add-on that helps achieve the goal when you are further along the customer journey.
Fitness clubs have also implemented this strategy by emailing their subscribers workout routines that can be done from the comfort of home while still achieving results; the end goal is to ensure that customers return to the gym at a future date, yet the strategy is to provide value that meets the current need.
3. Be patient with running ads that are performing well
Starting in March 2020, Facebook announced that due to staffing changes, advertisers were to expect errors and delays as the company began relying more on automated advertising review systems. With a strong belief that many other major players in advertising may follow suit, to avoid delays that might cost you revenue in the long term, it is best to extend the delivery period of your best-performing ad sets. So instead of starting a new campaign when making tweaks to your ad, choose to edit your currently running ad as new campaigns are subject to staff review and can be delayed when going live.
4. Create brand awareness by capitalizing on the presence of your online audience
The number of consumers online increased by 20 percent, week-over-week, during the Coronavirus shutdown. We know that this means that there is an opportunity for advertisers to cost-effectively gain the attention of a larger audience. As we’ve discussed earlier, this is basic supply and demand. Certain companies have seen a 12 percent decrease in CPM from the beginning of the year to March. Instead of focusing on sales and short-term conversions, advertisers should be providing content that adds value and creates awareness around their brand. These elements can include:
● Solutions in the form of content and/or tools that solve current problems
● Discounts on essential services to alleviate the effects of economic strain
● Free challenges that improve the lives of consumers
● Campaigns to build positive online reviews
This is especially important for local and small businesses that rely on consumer loyalty.
Alex McCurry, a widely recognized 19-year-old entrepreneur who has founded and built a multi-million dollar Digital Branding firm had this to say, “In 2020 we live in a time when consumer awareness is as high as it has ever been. The thought of being 'marketed to' can result in a bit of a sour taste being left in the mouth of the average consumer. The most effective way to build a dedicated base of customers or clientele is by building a brand that they can connect with and value. When markets dry up and dollars have to be spent more strategically, companies and individuals will choose to spend their money where they have the most trust and confidence. By building a trusted brand that your audience admires, you can hedge yourself against the normal downturn in business that most people see during times of economic strife.
While our current crisis has generated fear and a sense of uncertainty for many advertisers, it has also created an incredible opportunity to build a foundation of consumers who possibly will become loyal to your brand. These are the same customers that will one day need and seek out your product or service, even if they don’t necessarily see their need for it in this present time.