Business as unusual?
How Covid-19 is changing the game for agencies.
As the planet focuses its effort on halting the spread of Covid-19 and the UK’s lockdown enters its third week, three highly influential macro-certainties appear to have emerged: one, if we all follow the instructions of the government and its advisors, eventually the virus will run its course and the lockdown will be lifted; two, the way we work and our understanding and appreciation of how the business world intersects with wider society has changed forever; and three, it’s highly likely that something similar will happen again at some point in the short to medium term.
Indeed, this experience has thrown into sharp relief just how fragile our society and its systems are. What previously were considered immutable truths are no longer a given and this will inevitably have a profound impact on our behaviours, likely to be felt for many years.
We’re already observing evidence for some of the longer-term changes we could see. Research conducted in the past few days by Zinklar on how the virus has impacted FMCG purchase behaviour (in-store and online) yielded some very interesting results…
59%* of respondents said they’d buy another brand if their preferred brand wasn’t available, with just 9%* saying they’d wait until their preference was back in stock.
37%** have already bought products and brands they wouldn’t usually buy.
39%** have stopped buying their usual products altogether in order to save cash.
Clearly the usual assumptions around shopper behaviour (demand) are up for grabs, and loyalty in particular is a far more brittle concept than perhaps we’d like to believe. This would suggest that a more flexible, ongoing approach based around continuous customer acquisition is probably more prudent.
Furthermore, recent Kantar data*** has debunked the suggestion that mass, excessive stockpiling was to blame for the empty supermarket shelves. For example, just 6% of liquid soap buyers took home ‘extraordinary quantities’ and only 3% of dry pasta shoppers. What actually was happening was that large numbers of shoppers were buying just a few extra items per visit, as well as choosing to shop slightly more often. So there, in a puff of smoke, goes the previously unwavering confidence in the UK’s just-in-time supply chain model (read more about that here).
As the world of brands and retailers shifts on its axis, so agencies – particularly SMEs – must re-align what they do and how they do it or risk being perceived as not fully acknowledging the challenges at hand. There are, of course, many small adjustments which can be implemented quickly (embracing remote meeting technology is a welcome and cost effective evolution which has become embedded behaviour over the past couple of weeks) but the five suggestions listed below run a little deeper and require a bit more effort for the greatest reward…
1. Redefine ‘flexible’ working as ‘contextual’ working
The idea of flexible working has, quite rightly, been embraced wholeheartedly by our industry. Tech has largely removed the need for staff to be rigidly office-based, while 5G and the ongoing evolution of shared workspaces will more than likely render the idea of an ‘owned’ office location as pointless for many companies over the next few years. However, to maximise its benefits now is a good time to look closely at the term and what it implies.
The recent, slightly tainted image of flexible working – laptop, mobile, sofa, PJs and Netflix’s Tiger King on in the background – is doing it a great disservice and risks creating (mostly unfounded) trust issues between management and their teams. What this should actually be about is ‘contextual’ working, where the location for each person is determined by the greatest overall need at any point in time. So, have you got a proposal to write which requires a few hours quiet time? Then stay at home and stay connected via phone, Zoom etc if that’s what works best for you. Are you bedding in a new client relationship or experiencing a particularly intense project phase? Then consider basing the account team (creatives and planners too) in the client’s office part or even full time, so the business can be serviced in a way that would be impossible anywhere else.
This approach won’t always work for everyone and watertight employer/employee trust is paramount for it to be successful. Most importantly, a ‘remote’ solution should never replace ‘in person’ if face-to-face is what will achieve the best outcome. But by truly understanding context, flexibility can make a significant contribution to an agency’s proposition.
2. Resource smartly for the post-loyalty landscape
With former long-term objectives like brand loyalty becoming increasingly less realistic and tactical, multi-touchpoint briefs more frequent, carrying a lot of costly single discipline overhead won’t be sustainable for many activation agencies. The need to be adaptable and multi-faceted, fleet of foot and fully in sync with the market conditions of the brands you’re working with is non-negotiable. Effective repeat engagement and continuous customer acquisition are the new norms and this requires a new approach to managing the talent responsible for delivering it.
Agencies need to be able to quickly and seamlessly access a broad and scalable collective of expertise outside of their cost base, particularly in the areas of research, concept development, creative execution, measurement, digital and content. Growing, maintaining and refreshing this collective should be a core agency responsibility in line with shifting trends and client needs.
3. Embrace fluid consumer behaviour
Shopper journeys have never been as tricky to predict and the current lockdown is creating more new behaviours, even amongst those with previously set routines – some of which will be retained, others discarded. But this fluidity should be embraced as an opportunity. The agencies who strive to fully understand the dynamics of these behaviours and the insights that drive them will be the ones whose campaigns deliver the best sales conversion and budget efficiencies – the stuff clients really care about.
Brands and their agencies have a broader range of techniques and media touchpoints in the toolbox than ever to influence decision making at every point in the journey. However, ROI will be quickly eroded if budget is spent without accurate data identifying which levers (or blend of levers) influence each target group and to what extent. Which brings me to my next point…
4. Embed data into everything you do
Data is the engine room that powers all good decisions – both internal and external – and so building a data culture within your agency should be central to your business plan. The big challenge with this task is that it’s the agency equivalent of painting the Forth Bridge: it never ends. Insight is only as good as the data that informs it and data can quickly become out of date. Setting a coherent data strategy and optimising the extensive available tech in this area will make the task feel less daunting and help ensure the data engine is kept topped up.
I would suggest there are probably three main data ‘zones’ (each covering both project-specific needs and market/consumer trends) that should be addressed as part of this process…
a) Acquired: this is data sourced from third parties (market info, media packs, demographics, brand metrics, previous campaign results etc) or established via commissioned research.
b) Measured: this is data collected from the output of a campaign you’ve run (budget, experiential campaign footfall, social media data, sales uplift etc).
c) Processed: this is data that is the result of evaluation or calculated from one or more sources, usually from analysis of Acquired data, Measured data or a combination of both (ROI, effectiveness, profitability etc).
Each zone will need its own budget, tools and tactics – this is too important to be done on an ad hoc basis – which can then feed into your agency’s over-arching data strategy and proposition.
5. Deliver scale and sustainability through collaboration
One thing that hasn’t changed during the current crisis is the extent to which the scale/efficiency conundrum will inform how agencies plan for growth. What more than likely has changed, is not only the acceptable pace of growth but also which factors are likely to determine it. Indeed, our new appreciation of society’s fragility mentioned at the beginning of this article will surely influence the importance we attach to the sustainability – financial, human and environmental – of what we do. Our place in a society-wide, inter-dependent ecosystem – and the responsibility that comes with it – is undeniable.
Delivering this industry-level sustainability will require a scale best achieved through true collaboration. This should ideally include: industry body membership and the active support of their initiatives, joint ventures and strategic partnerships, embracing responsible leadership and working practices, open source research and market intel, even closer working relationships with clients and agency loop teams, encouraging environmental best practice and standards (e.g. via B Corp certification), sharing learnings, fair and cost-efficient pitching, nurturing talent-led workplace diversity and being fully accountable for our output and influence.
So, in summary…
Any external short sharp shock will inevitably change the game for an industry so intimately connected to the shifts in consumer supply and demand – let alone a shock as brutally seismic and downright terrifying as the current health crisis, and let alone in an industry already experiencing myriad challenges on how to remain viable and relevant in a confusing, ever-changing world. I recently wrote a review of the Advertising Association’s brilliant LEAD2020 event in January, which addressed a number of these areas – read it here.
Yet this is no time to be downbeat. The opportunity to be creative and reinvent what agencies can and should do is clear and present for an industry that thrives on creativity and reinvention. And that’s very exciting.
In these most unusual of times, we have a unique opportunity to reflect on our own businesses and partners to ensure we have the best possible outlook, structure and agility to succeed in – and contribute to – this brave new world.
Stay at home and stay healthy everyone
Guest blog written by Paul Cope, a brand, activation and shopper marketing expert with over 20 years agency, brand and industry body experience.
* Zinklar research report - Coronavirus: impact in purchase behaviour (w/c 16th March 2020)
** Zinklar research report - Tracking COVID19 impact: Sentiment score & habits UK (1st April 2020)
*** Kantar report - Accidental stockpilers driving shelf shortages in the UK (24th March 2020)
