Jon Waterman, Founder and CEO of Ad.net
As COVID-19 continues to permeate the United States, it’s shuttered businesses, disrupted supply chains, caused skyrocketing unemployment, and changed how people perceive cleanliness and health. Similar to the 2008 market crash, the pandemic’s economic impact has reset consumer behavior and expectations. It’s changing how we value and spend money, and in turn, rewriting the playbook for consumer advertising.
With shelter-in-place orders in effect for more than two months and more in some states, purchasing habits have shifted almost entirely from physical brick-and-mortar retail to e-commerce. For example, Walmart’s e-commerce earnings soared by 74 percent as consumers stocked up on all kinds of goods. Without an end in sight, consumers are going back to the basics, buying more napkins and toilet paper, consumer packaged goods (CPG) such as beauty and skincare, and mass-produced shelter food such as frozen meals and cereal online. This leaves them less likely to shop for non-essential retail goods such as clothing and jewelry. Consumers are also purchasing from their neighborhood restaurants and shops instead of major brands.
These digital and “shop local” mindsets are creating a battlefield for consumer attention during and after the pandemic.
Currently, 62% of consumers are saving money during the pandemic and 42% believe how they shop will fundamentally change as a result of the outbreak, according to EY, and the latter group is not wrong.
One area that will be most impacted by the pandemic is travel. As the economy begins to recover, people will likely want to live more “in the moment”, similar to the millennial generation after the Great Recession, and especially after being at home for months on end. Once officials offer a sense of safety to consumers, they will begin to pre-book vacation trips and buy theme park tickets in advance.
Real estate will also have to deal with a shock to its way of doing business. More people are telecommuting, with many major companies such as Twitter announcing work from home for an indefinite amount of time and Google and Facebook allowing it into the beginning of 2021. This may mean people can work from anywhere in the country or even the world, and it may also affect car insurance as fewer people use their cars to go to work. A recent Zillow Group survey found that 66% of Americans said they would consider moving if their job allowed them to continue telecommuting, leading the company to believe a suburban housing boom is on the horizon.
Focus on Data-Driven Advertising and Performance Marketing
As people become accustomed to the pandemic, brands must empathize with customers in a way that says “I understand” to connect with them on a personal level. For instance, several insurance companies understood that many people were staying at home for the foreseeable future and would most likely not use their cars to travel as much as before. Therefore, they sought to advertise discounts for new and existing members.
Brands may be improving user experience and running sales on their websites to gain customers, but it is not always enough. During and after the pandemic, advertisers must be prepared for more consumers online – not just from a supply standpoint but an analytics standpoint. Many people are currently home and glued to their computer screens, and since consumers are changing their purchase habits a lot of past data becomes obsolete.
Intent-driven marketing can give brands and advertisers the measurable results they need. It is rooted in first-party data, which is more essential now than ever before to understand how new behaviors are forming. Brands that shift their ad spend from out-of-home advertising to pay-per-click (PPC) campaigns on relevant sites provide an opportunity for cost-effective conversions.
This type of performance advertising and marketing will become the dominant strategy for many in 2020 as brands look for ways to have clear and measurable goals post-COVID-19. There are many things to consider when reaching your target audience during and after the pandemic, but it is important to be selective with targeting.
About the Author: Jon Waterman is the founder and CEO of Ad.net, an advertising marketplace that helps Fortune 500 brands acquire new customers outside the major search engines. Ad.net’s mission enables those brands to find incremental customers through intent and audience-based targeting to reach an untapped market. Under his direction, Ad.net has grown significantly into an innovative leader in search advertising with over 10,000 campaigns. As an influential thought leader, Jon is a sought-out source for his industry insights in many of the top marketing publications. Jon is a member of the Young Presidents Organization and was recognized as an honoree for the EY Entrepreneur of the Year Awards.