‘Now is time to come up with pivot plans:’ e-commerce is driving media spending over the holidays

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It’s a commonly-held belief that Christmas marketing starts earlier every year, but this year, driven by coronavirus-driven disruptions, it’s true in more ways than one and timing will be like no other.

Over the coming weeks, spending will be moving from building awareness and increasing the chances of products with e-commerce as well as search and social being discovered into driving consideration and action through retail media. 

Indeed, for many advertisers, 2020 is the year to jump the queue and go early with campaigns. And those campaigns are likely to push online sales more than ever as retailers come under pressure to mitigate the loss of physicals store sales. 

With e-commerce driving more media spending, advertisers are increasingly looking at the likes of Walmart and Kroger as media owners.  In recent years, there’s been a surge of retail media networks, ad sales business, spanning both on-site media and off-site placements. With more advertisers, particularly those in the CPG category like Unilever, looking to accelerate their transitions into e-commerce, retailers are emerging as key partners. 

Some of those partnerships are likely to start over the coming weeks. And advertisers are likely to pursue them for a number of reasons:  those networks are the closest to the point of purchase: and working with those platforms boosts their ability to target the right audience segment, and in some cases, even offer the ability to safely upload first-party data into a clean room to create unique audience segments with the retailer’s data.

Most (85%) of CPG marketers are planning to buy more ads from retail media networks, according to a survey of 100 marketers at major U.S. brands conducted by Merkle in August. More than half (52%) of those marketers will do so in the next year. 

“We’re seeing this funding come from a number of sources, in some cases, it’s incremental shopper or trade dollars that might have been spent with other retailers being shifted to a retailer that has the right audience, ad solutions and level or reporting required,” said Janine Flaccavento, svp of media solutions for new stream media and e-retail at Merkle

In other cases, these are e-commerce dollars moving into the retail media space. 

In general, brand and media spend is going through serious schedule shifting and contingency planning.

Between Amazon’s decision to move Prime Day to the first week of October and retailers like Walmart, Target and Best Buy starting winter promotions before Halloween, shoppers are going to be buying for the festive season over an even longer period this year. In other words, there won’t be a huge spike in spending around Thanksgiving as advertisers opt for a more sustained media presence.

“Usually, holiday plans are locked in by our teams before the end of the second quarter, but this year didn’t start having those conversations until the end of the third quarter because of all the uncertainty,” said Jon Kaplan, head of global sales at Pinterest. “We’re talking to marketers who are starting campaigns for the holiday season earlier than ever,” 

At digital agency Threepipe execs are planning to spend around a quarter of the quarter’s budget throughout October, with most of it on online media, spanning search, social and retail media. Around 10% of those budgets should be reserved for any unforeseen events that could either push away or pull in more potential customers. 

“The markers that move people’s behavior may not be the traditional time-based ones, which are often around the proximity to an event like Christmas,” said, Farhad Koodoruth, co-founder at Threepipe. “Instead, those decisions are likely to be driven by whether there’s a new work scheme for people who need financial support.”

Execs at agency 360i are advising clients to pull as much 40% of their media dollars for the quarter into October given the anticipated sales influx. Last year, the agency’s clients spent around 24% of their seasonal budget over the same month. In other words, the agency is asking them to spend an additional 15% on ads this year in October. 

For the remainder of the year, 360i has advised advertisers to reserve between 5 and 10% of their media budget for unplanned events such as additional stimulus checks in the U.S. The remaining 50% of spending should go on those tactics and promotions advertisers know work best at this time of the year. 

“Because the greatest known over the holiday season is the unknown, now is the time for marketers to come up with pivot plans and ask themselves ‘what if?’,” said Doug Rozen, chief media officer at 360i. “Smart marketers always have the money set aside for unforeseen events, but not always the plays to handle them which is what we’re working with clients on.”

Over the coming months, advertisers will be locked in a high risk, high reward game with their media dollars. From a divisive U.S. presidential election to concerns about second waves of the pandemic in major markets, fleet-footed advertisers will need to have contingency plans they can call on at a moment’s notice. 

“If there is any recommendation for the 2020 holiday season, plan for different scenarios and structure your teams to move quickly based on what the data is telling you,” Jess Richards, evp, head of Commerce at Havas Media, which is launching a new offering later this month to help advertisers make those pivots. 

If 2020 has taught advertisers anything, it’s that adaptability trumps everything else. 

It’s why execs at marketing agency Tinuiti are urging clients not to allocate their spending too far in advance. Instead, the plan is to pool spending into the fourth quarter as a whole, watch for opportunities and then pounce with the appropriate levels of spending when they see an opportunity. That means its clients are ready if there’s an early spike in sales but can keep some of their powder dry for the more traditional holiday season too.

“Every Army General knows ‘no battle plan survives first contact with the enemy’ — our clients and we know no marketing plan survives the first contact with consumers,” said Craig Atkinson, chief client officer at Tinuiti.

“Clarity around goals and rules of engagement is the only way to win with today’s consumer. — They’re in charge.”


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