How Did Marketing Strategies Evolve in Response to COVID-19?

 COVID-19 has delivered a devastating blow to the world economy and has forced companies to drastically change the way business is done. Seeing the condition at hand, companies must choose between two options. Either drastically reinvent themselves and their business process in the wake of the worldwide pandemic or succumb to the virus and surrender everything to it. Functional units within companies, therefore, need to reinvent the wheel in terms of basic business processes that drive the entire organization forward. Marketing, as an important function of any company, is no different in this regard. 

Delving Deeper 

Organizations are inherently very slow to change and require careful strategic planning in case of massive overhauling. This is truer for organizations that span multiple countries and geographies than start-ups that are quite reactive to macro-economic changes. The image below shows the three levels of Management of an organization. The bottom level has all the employees while the middle level has the middle Management, and the top tier consists of business leaders who steer the company’s growth and direction. 

Fig 2.1 Source- https://theintactone.com/2019/05/05/cam-u3-topic-2-information-systems/

Operational Management contains within it, all the functional units like Marketing, Operations, HR, Sales, and Accounts, to name a few. Each function of a company serves a different purpose that together makes up the company as a whole. This Digital Dribble article will focus on marketing and how it has evolved during the pandemic to better serve the customer and the company alike. 

Fig 2.2 Source- https://foundersguide.com/functional-areas-of-a-business/

Current Trends 

COVID-19 has drastically changed the way consumers behave, and therefore it is fundamental that marketing efforts also align in that direction. Certain industries like essentials, e-commerce, gaming, edtech, and entertainment have flourished during the lockdown and have seen increased activity/business while other industries like travel and tourism, and hospitality have seen better days. This section aims to cover the current trends in marketing during COVID-19 to understand how global catastrophes urge marketers to change their way of thinking to suit their customers. 

Online Marketing Boom 

The image below shows a comparison of Google Searches along with the graph of rising COVID-19 cases. Three of the most important search terms were, ‘online shopping’, ‘online doctor’, and ‘food delivery’ and the image shows that as cases started to rise, the frequency of these terms being searched rose alongside it. Companies like Zomato and Swiggy have upped their ad spending on digital marketing, especially their YouTube advertisements while simultaneously focusing on ‘No Contact Delivery’ of the customer’s favorite food. 

Fig 3.1 Source- https://www.brookings.edu/blog/future-development/2020/04/27/leveraging-e-commerce-in-the-fight-against-covid-19/

E-Commerce Sales and Usage

Fig 3.2 Source- https://www.datafeedwatch.com/blog/how-coronavirus-changes-ecommerce

E-Commerce sales skyrocketed (30.1%) from 2019 to 2020, thereby driving digital adoption in many cases. At the same time, retail growth has been limited to only 4% showing the declining scenario of retail in the country (USA) in data compared between the first six months of 2019 vs 2020. Online spending accounted for almost 19% of the total retail sales in the first two quarters of the year 2020

Fig 3.3 Source- https://www.datafeedwatch.com/blog/how-coronavirus-changes-ecommerce#coronavirus-vs-ecommerce-data

Amazon.com is one of the few companies that have received a significant boost since the lockdowns began with data showing steady growth YoY (year on year) from the previous year. As more and more lockdowns were announced traffic increased further contributing to sales on the website. Customers on Amazon spend a whopping US$ 11,000 per second!

User Content Consumption Pattern

To understand the marketing efforts, it is important to understand the potential customer/consumer first, and during COVID-19 user content consumption changed drastically. It is evident that digital mediums have gained traction in the pandemic, but it is difficult to estimate quantitively due to the recency of the data and the fact that work across all spectrums has not resumed with full force yet impeding research. People in isolation are turning to entertainment to keep themselves occupied. Thus, this section will primarily aim to study the before and after consumption patterns of certain websites/apps/channels. 

1. Social Media Platforms

PlatformFacebookInstagramSnapchatLinkedInTwitterReddit
ParentFacebookFacebookSnap Inc.MicrosoftTwitterAdvance Publications
Google Play Store Downloads5 Bn+1 Bn+1 Bn+500 Mn+1 Bn+50 Mn+
Unique Users2.6 Bn1 Bn315 Mn660 Mn330 Mn430 Mn
Average Minutes per User58 Minutes53 Minutes30 Minutes17 Minutes3.39 Minutes10.38 Minutes

Use Case (Facebook)-

  1. Facebook monthly active users have increased from 2,498 Million to 2,603 Million (4.2% increase) from Q4, 2019 to Q1, 2020.
  2. Voice and video calls have recorded a 50% usage increase, while group calls have surged over 1000%. In Italy, people are spending 70% more time on Facebook and its sister applications.
  3. In March more than 3 billion users logged on to any of Facebook’s applications.
Source- www.statista.com

Number of users (in Millions) for Facebook. Only the first two quarters are considered for 2020.

2. OTT Platforms

Even before the pandemic, the OTT platforms were all the rage.

  1. Due to the lockdown, the OTT market jumped by 55% globally
  2. OTT is supposed to grow from $104.11 billion in 2019 to $169.4 billion in 2023 at a CAGR of 14%
  3. More than 75% Indians (of a target pool of 3000 surveyed) purchased an OTT subscription in the lockdown
    • 73% started watching Hotstar and YouTube
    • Amazon Prime had 67% growth while Netflix saw 65% growth in subscribers
    • Facebook (80%), YouTube (84%), WhatsApp (92%) saw an increase in usage
PlatformYouTubeDisney+HotstarVootSony LivPrime VideoNetflix
ParentAlphabetStar IndiaViacom 18Sony PicturesAmazonNetflix
Google Play Store Downloads5 Bn+100 Mn+50 Mn+50 Mn+100 Mn+500 Mn+
Unique Users274 Mn128.5 Mn22.5 Mn24.5 Mn23.1 Mn15.5 Mn
Average Minutes per User7.4 Minutes13.4 Minutes3.8 Minutes2.7 Minutes96.3 Minutes24.1 Minutes

Use Case (YouTube)-

  1. In India, YouTube has seen a surge of 20.5% in its subscriber base in the lockdown
  2. YouTube has gained over 300 Bn views in the first quarter of the year which is a 13% increase from the last quarter of 2019
  3. 70% viewership comes from the age group of 18-34 years of age

Viewership of YouTube in millions is steadily rising in the country as the graph shows, and the pandemic has only accelerated the process by manifold. 

Source- www.statista.com

The chart shows the usage of YouTube in the USA increased in the pandemic significantly (63.7%) as opposed to before. The data was from a survey conducted during the initial months of the pandemic, and as time progresses, the increase is only going to be more apparent. 

3. Miscellaneous-

There are several different aspects of content consumption, and although it would be impossible to cover them all, the miscellaneous section attempts to cover at least the most important among them.

Virtual Conferencing Applications-

  • Zoom, Microsoft Teams, Google Meet have gained millions of users with Zoom’s usage jumping 30-fold in April 2020
  • Microsoft Teams recorded 560 Million minutes on March 12, 2020, which increased to 2.7 Billion on March 31st
Fig 4.1 Google trends of virtual meetings

Online Gaming-

  • Paytm First Games reported a 200% increase in its user base during the lockdown
  • Rummy Circle grew by more than 100%, and the target age group playing these games is the 18-45 group
  • Games that have seen an uptick in their activity are-
    • Carrom Pool
    • Ludo King
    • Uno
    • Call of Duty: WarZone
    • Pictionary
Fig 4.2 Source: https://www.comscore.com/Insights/Blog/COVID19-and-its-impact-on-Digital-Media-Consumption-in-India

Changing Marketing Strategies

Marketing is one of the most crucial areas for a company. It is also one of the most unique as it is one of the few functions that face both the customer and the company. This involves understanding the customer and collecting key data that drives insights and in turn, strategies for the organization. 

Some of the key strategies that are being followed throughout industries in the case of marketing are enumerated below:

A. Observing changes in customer behaviour and sentiment closely 

Customers have been more trustful of local businesses than big corporations, and COVID-19 has only accelerated this consumer behaviour. Therefore, it is imperative that brands now more than ever: 

  1. Listen to customers and understand what drives customer decisions: They can do this by studying the impact of global phenomena like recessions or pandemics like COVID-19 on customer actions and correlate these with why customers are distrustful of big brands.
  2. Stay true and honest to the claims that the brand makes: Marketers need to protect the sanctity of customer relationships and must stay true to what the organization can and can’t deliver to the end consumer. Customer trust is an asset for the marketer as well as the organization as a whole 

B. Making the marketing plan adaptable 

A good marketing plan is any plan that adjusts for the future. It is prudent to use base, worst- and best-case scenarios for any decision-making related to campaign spending and otherwise. Other areas that need focus are: 

  1. Brands must develop creative, alternate marketing efforts since events that target large groups of people within places like malls is not possible at the moment. They should focus on digital marketing since it is an arena that is becoming increasingly relevant each day.
  2. Since everyone has the same opportunities and channels available to them businesses must focus on securing media to ensure that their products are seen by a larger audience. 

C. Being ready for operational impacts 

COVID-19 has significantly impacted supply chains all across the world. Factories & manufacturing facilities are closed all over, and supply chains and logistics have been disrupted, affecting the supply side of the equation. This led to wild price fluctuations of products. In this scenario: 

  1. It is essential to strip everything down to the bare necessities. Marketers must coordinate with other departments (especially manufacturing and production, sales, logistics, and finance) to understand which products can and can’t be produced due to the capacity constraints along with supply chain difficulties. For products that cannot be produced in the current scenario, it is prudent to remove all campaigns related to it so that the bottom line can be given space to breathe, so to speak. 
  2. Digital marketing is the most effective and efficient tool at hand. Therefore, marketers must realize that during times of global unrest, it is best to fall back on something reliable. Digital delivery needs to be ramped up by promotion of Facebook/LinkedIn Pages, Mobile Applications, Amazon/eBay shops, and by incorporating payments into the website or application. 
  3. Leveraging technology for eliminating redundancies is crucial for cutting costs. Business Process Re-engineering is one of the ways to do it. This ensures that the return on investment for any function inside the company is good and keeps continuously improving. 

D. Other trends to keep in mind 

The following trends need to be followed to reap maximum benefits:

  1. Market from home: Home is the current battleground, with almost all organizations making work from home an option for their employees. Keeping this in mind, marketers can quickly design and deploy campaigns from the comfort of their homes, thereby having an edge over others. 
  2. Engage with empathy: As said before, listening to customers is now extremely important, perhaps more than ever. Market research teams need to deliver real-time customer data so that they can be converted into insights and implemented to further marketing efforts by the company. 

Analysing the changing marketing strategies gives an insight into what works during times of stress. Detailed research on how to adapt to these uncertainties can better guide the organization into the future. 

 Interested in reading about how brands can revive themselves? Check out this Digital Dribble article.

References

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