The Lowdown - March 2022

Against a sobering world back drop, this month's Lowdown considers the implications of the cost of living crisis, sheds light on 'Queenagers' and questions just how different the "new normal" really is... Read on...

 

Marketing during a cost of living crisis

After a difficult couple of years, many businesses were hoping for a positive 2022 but it's hard to ignore the negative mood around the increasing costs of living (a 30 year inflationary high of 6.2% - FT) and the economic (as well as humanitarian) impacts of the war in Ukraine.



KPMG suggest that one third of consumers are planning to reduce their household spending this year and as reported in Marketing Week, EY say the majority of consumers have noticed rising prices with many shopping around more as a result:


Source: EY report in Marketing Week: Rising costs dampen consumer confidence


WARC's recent article, suggests how marketers might refine their approaches to each of the 4 Ps - Place (distribution), Price, Product and Promotion.

Overall, sensitivity is key for brands, getting to grips with the economic realities of their consumers and treading carefully over another tricky period.

 

The Boring Brown Line of Continuity

In Mark Ritson's Marketing Week column, 'Welcome to the new normal, it's the same as the old one', he suggests that despite immediate often seismic changes to behaviour during the pandemic, people are largely returning to what they were doing pre-pandemic:

The boring brown line of continuity is pointing back to normality and a future that is different, but not too different, from the past.

He cites a number of examples to show that the boring brown line is ringing true:

Source: Marketing Week, 'Welcome to the new normal, it's the same as the old one'


He warns Marketers not to assume that consumers are behaving completely different to pre-pandemic. There have been changes, but over a longer timeframe, most aren't quite as big as they had immediately seemed.

 

The Rise of the Queenagers

As reported in The Telegraph, NOON Research have released research on the 'Secrets of Midlife Women - or The Rise of the Queenager'. These women are typically:

Source: 'Secrets of Midlife Women - or The Rise of the Queenager


The research points out how these women are actively choosing to follow a different path to those who've gone before them (like their mums) and feel that society and brands are yet to 'get them'. But done right, with their disposable income, this group of women represent a very interesting and lucrative group for brands to target.

 

Media inflation in digital too

We hear a lot about inflation in TV advertising at the moment, but recent WARC Data shines a light on the rising costs in digital advertising too. Over Q4 2021, search CPCs rose by an estimated 23%, social CPMs by 22% and retail media CPCs by 13%:

Source: WARC data


The article also suggests that this strong growth in ad costs is likely to continue into 2022 with e-commerce set to be the quickest growing medium. Digital is typically seen as a great way to target audiences cost effectively but that cost efficiency needs monitoring and can not be taken for granted.

 

Habitual but not loyal

As reported in Performance Marketing World, new research suggests that consumers can become habitual rather than 'loyal' to brands. 'The Loyalty Paradox' a report issued by Edit and Kin + Carta suggests that although brand incentives and rewards:


"may encourage consumers to repeat purchases with a brand, this should not be confused with loyalty and brands should no longer rely on an emotional connection...
Brand affinity through emotional connection has weakened to be replaced by habitual ties based on lived and related experience with brands and retailers”

When looking at loyalty across different sectors, e-commerce was particularly poor (6% loyalty) versus Finance (9% loyalty) and offline food and drink retail (21.5%).

Source: Performance Marketing World: 'The Loyalty Paradox' by Edit and Kin + Carta


The conclusion is that brand engagement shouldn't be judged on repeat purchasing alone but on ALL brand interactions to understand what is really going on.


 

Be clever not "creepy"!

As reported in Marketing Week, Cheetah Digital research has shown that 67% of consumers aren't too keen on ads that use location to targeting. Their preference is rather to share data directly and honestly with brands in exchange for personalised experiences (which they want).



Certainly this greater awareness of personal privacy has led to noticeable increases in security-focused behaviour - a 50% increase in incognito browsing, 37% more ad-blocking tech and 31% increase in paid-for premium software. Brands are being encouraged to tread the fine line between clever targeting techniques (with personalised experiences) and unwanted, 'creepy' targeting that makes consumers react negatively to the brand.


 

Cinema - ad sales to exceed pre-pandemic levels?!

In an industry sector where the pandemic must have felt like a slap in the face, finally some good news. Digital Cinema Media (DCM) has reported that Q1 22 revenues exceeded those of 2019. As reported in Campaign, big hits such as Spiderman and The Batman have brought cinemagoers back to the big screen.


With big budget sequels of Jurassic World, Top Gun and Avatar in the wings, the cinema advertising industry is chipper. This is also buoyed by the increasing inflation of TV ad spots, resulting in brands looking at alternatives ways to reach audiences audio-visually.


To whet your appetite a little further, check out Pearl & Dean's 2022 montage:


 



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