S1
Episode 1
Digital Advertising Today: StackAdapt Roundtable
About This Episode
We discuss the challenges facing agencies, budgets, brands, messaging, and advertising channels in the wake of the COVID-19 pandemic.
Vitaly Pecherskiy | COO, StackAdapt
Transcript
Episode Introduction (00:00:00)
I think a great learning example from this is the Philippines Department of Tourism, actually. And it’s not a current learning. It’s actually what they what they did in response to the 2013 typhoon hyena hits, what they actually did was they use a campaign called It’s More Fun in the Philippines, where they asked Filipinos to share their version of the country, in Instagram photos and another content. So by eliciting this avalanche of free content of when that typhoon actually hit, they leverage that to help curb the potential impact on the tourism industry. And I think the interesting thing to note here is that consumers are actually ahead of advertisers right now. Consumers are looking forward and most messaging is looking back.
How Agencies Thrive Introduction (00:00:55)
Curious to know what industry leading marketers are looking to achieve and the ever evolving digital landscape to how agencies Thrive podcast by StackAdapt is dedicated to helping the new breed of forward thinking savvy, lean and mean marketers win in the rapidly evolving digital landscape. Time to thrive.
Vitaly (00:01:23)
Hello, and welcome to our first official episode of How Agencies Thrive podcast. My name is Vitaly, the host of this podcast. And today I have a few people from StackAdapt joining me for a roundtable discussion on the topic of digital advertising today. Hello, everybody.
Eli (00:01:37)
Hey, how’s it going?
Pam (00:01:38)
Hey, Vitaly.
Vitaly (00:01:42)
So as you probably heard, there’s five of us. So five people in the podcast is that too much?
Christian (00:01:47)
We’ll find out shortly, I guess.
Vitaly (00:01:51)
Well, we have to make it work. Because as you probably figured out, were recording this episode entirely virtual.
Christian (00:01:58)
So this is the best we can do.
Vitaly (00:02:01)
Again, thank you all for joining. I think it’s going to be a really great chat for us to kick off the season of this of this podcast, we’re going to have 12 episodes within the season. So this is episode one. I think maybe before we actually dive into discussion, why don’t we do a quick round of introductions so that listeners know who we have here today. So Pam, why don’t we start with you?
Pam (00:02:23)
Thanks for tally. I’m excited to be part of this podcast in this roundtable. My name is Pam McBride and I am part of the marketing team here at StackAdapt.
Eli (00:02:32)
Awesome, and I’m Eli Barkoff. I’m a Sales Director at StackAdapt. Working with clients from you know, a wide array of verticals, from political to CPG, to healthcare to you know, you name it.
Meredith (00:02:43)
I’m Meredith Henschel. And I work with Kristian on the solutions team here at StackAdapt. So really, our team sits between, you know, all things product and partnerships and all things sales. And you know, we’re here to create solutions for for our clients are StackAdapt.
Christian (00:03:01)
Cool. And yeah, so my name is Christian St. Louis, and I am on the solutions team as well, which Meredith mentioned, and I have more of a focus on the data side of things and the data partnerships that we work with. And as you’ll see, in a later episode, I have a chat with with John Shaughnessy from live ramp, which we’ll talk about a little bit later.
Vitaly (00:03:23)
Cool. Yeah, thanks a lot for this introduction. So as you as you have gathered, we have a well, a very good representation of people from all sides of the business. So from data and inventory, solutions to revenue and marketing. So hopefully, we’ll be able to give a pretty good macro view of the industry and what we’re observing when we’ll work with our clients. And hopefully, that will be a good basis for people to think like what what kind of learnings we can, what kind of learnings they can take away from us and potentially apply to their business. So Pam, and I actually started conceptualizing this podcast, probably when maybe six months ago or a year, probably around 2019.
Pam (00:04:02)
I think we started talking about it, and now just seem to be the ideal time to get it off the ground.
Vitaly (00:04:11)
Yeah, so we’re, as we’re about to kick it off. We went to work remotely. So we thought, well, we don’t know when we’re going to come back to the office. So we may as well keep going with it and launch it. So I think from we have at this point six episodes recorded and I thought they were all incredible. So I’m very excited to actually get this out to market. And if anything, the timing is even probably better now because there’s been so many changes in the business for businesses since mid March. And and we really want to be to have that platform to share knowledge and help our customers and other companies navigate through these changes. So I think the basis for today’s conversation would probably be the work that our team has been putting into researching changes into the in the market. We’ve called this research project managing through uncertainty. And we’ve packaged our research around certain verticals that we would do a lot of business in. And today’s discussion will be largely focused around changes that we’ve observed in the industry, and some of the insights that we really would would love our listeners to take away from it. So we’ll probably start with question. And I, to be honest, I have a huge list of questions for the team. Why don’t we start with you, Christian? Obviously, your experience is very heavily weighted on the data side and data solutions. And you worked closely with the team to engineer solutions for our customers. And when you worked on managing through uncertainty reports, you you did a lot of work in the b2b vertical. So maybe you can tell us a little bit more about some of the key learnings that you took away from from this work? And are there anything? Are there any specific things that you would want listeners to take away from, from our today’s conversation?
Christian (00:06:01)
Yeah, absolutely. I think there’s a bunch of key takeaways, specific to the b2b industry, within advertising. And I think one of the things that stands out the most and is highlighted in our managing through uncertainty series is with the disappearance of, or the lack thereof, for human human interactions and things like conferences, live events. And you know, just any in person interaction that might lead to a sale or, you know, qualified lead to put it in b2b terms, that’s kind of been shut out over the last month and a half. And E marketer released a stat that said 53% of us b2b marketers consider in person events and trade shows a very effective channel for conversion. And so reaching decision makers in a digital manner has been kind of a big strategy and tactic shifts to help replace some of those leads that were human and in person driven. And one of the key things that we focus on and what we’ve noticed, with partners like LiveRamp, and other data providers, decision makers are obviously still working. And they’re just working at home. And there’s no reason why a lot of those in person leads can’t be converted to digital leads, you know, with different innovative strategies. And so that’s one of the main focuses of the b2b industry is understanding how can you reach that same audience that’s now working at home, but still has to make those those b2b decisions on, you know, potentially buying a subscription to a company like Dropbox or like a, you know, large software provider, they’re still those decisions are still being made at companies all around the world.
Vitaly (00:07:45)
And I think maybe, to your point, you know, with b2b or software companies, it’s different than a consumer company. Like if you take an example an airline, once airlines open up again, you know, if you want to go to Europe, you get on the plane, and you get there, there’s really not that many alternatives. When it comes to b2b sales. On the other hand, the buying behavior may change forever. And if if companies have been delaying changing their strategy towards more digital focus, lead generation away from maybe in person, like conferences or in person visits, they might be at a huge disadvantage potentially for years to come. Would that be fair to say?
Christian (00:08:28)
Yeah, absolutely. I think that. And once, you know, this is kind of a catalyst for change in the b2b realm, and the marketer released another stat that was kind of lends itself to that. And that 25% of b2b marketers said that they’ll reinvest, reinvest the impacted, tradeshow budgets and conference budgets into digital advertising. So I think a lot, this is really being a catalyst for change, for b2b driving towards more of a digital approach. And I think there’s, that’s also proven. With our chat with LiveRamp. We talked about kind of like, what the percentage of different data requests look like, and they were seeing the highest percentage of requests coming from b2b lately. So I think there’s it’s really a catalyst for change, and that will spur change going going forward into the future. And there’s actually a study that I had a stat here about a study that, let me see where it is. Yeah, so there’s a study that was done by the European Journal of Social Psychology back in 2009. That said, it takes 66 days to form a new habit. And, you know, we’re around day 50, I think now in Toronto of sheltering in place. And the fact that, you know, the people staying at home will take more than 66 days likely, in certain areas of the world, new habits will form and it’s likely that you know, for b2b and consumer like a lot of these habits will be taken into will be kind of become the new norm for years to come.
Christian (00:09:55)
Yeah, Christian to your point on that. I think right now for b2b marketers, you know, like all marketers, right now, there’s an opportunity to help people transition to the new normal, as you mentioned, you know, we’re in around a day 50, or something like that sheltering in place. So I think for b2b marketers, especially, you know, if they have a tool that can help the millions of people who are now working from home or learning from home, you know, now’s the time that they can really break in and help people with this transition, and potentially, you know, after things start to ease up, you know, the, it could have a lasting impact on the way that businesses structure or like, you know, which products are now considered essential for a new business to use on their daily basis. So I think, you know, some of the recommendations we’ve been seeing are giving is, you know, allow, give your clients like some sort of Free Trial or reduced pricing or something like that, to let them test your product to see if it’s a tool that can help them out during this time, because that’s really what it’s all about.
Christian (00:11:02)
Yeah, for sure. And I think one indicator of that alone is just if you look up zooms, stock price, that’s all you really need to know, is it like, you know, the change is huge when it comes to, you know, the digital workforce and digital education, and zoom, really, the stock price really highlights that trend.
Vitaly (00:11:21)
And there’s I there’s probably a lot of businesses right now that think that they will not be affected, obviously, for example, education, yes, their summer semester, but I think the big bet for them is that everything will go back to normal in September. What if it doesn’t, and people still have to take majority of their classes online, so that will probably spark a huge new buying cycle for these institutions that have been just waiting it out a little bit longer.
Eli (00:11:52)
I think on the on the flip side of that, you’ll also see companies that have realized they’re, they’re able to do business remotely as well, which I think, you know, companies like zoom and other, you know, b2b companies are technology companies that cater towards that and facilitate and make that easy, easier, at least, you know, we’ll likely see some sort of surge and, you know, potentially adapt their messaging to, you know, cater potentially this entirely new, you know, remote workforce, as potentially companies kind of start to, you know, not necessarily adapt to, you know, the current situation, but potentially make plans going forward as well.
Vitaly (00:12:29)
For software companies right now is just would it be fair to say that it’s a land grab it because it’s so scalable?
Pam (00:12:37)
I think that’s fair to say. And I also think that typically, b2b sales cycles tend to be longer than b2c sales cycles. And I think what most b2b companies are going to realize is the value of promoting themselves online and promoting themselves digitally, as opposed to the other means of out of home or event based marketing that they used to do. So. I think it’s also going to place a greater emphasis and greater value on actually finding people online, and, you know, promoting their products and services to them, which is typically been a very strong b2c play.
Vitaly (00:13:17)
Speaking of b2c Pam, obviously, you were very closely involved in making our managing through uncertainty reports happen. And when people think about verticals that have been the most impacted by by COVID, and pandemic is, it’s traveling tourism. So seeing that, knowing that you’ve done a lot of research in in that specific vertical, how are our advertisers, they’re adjusting to what’s, what’s happening now and what sort of Outlook they have for the rest of 2020.
Pam (00:13:51)
So that’s interesting, because many industries or sectors have actually been impacted by the current climate but perhaps known so much, not so drastically as travel and tourism, because it also spans several areas that includes transportation because like you said, I need to fly somewhere I need to take a train. I need to go on a cruise and in in, you know what involves accommodation, even events and attractions, think of Coachella or Disneyland. And even though today’s particular impact is on a total global level, to be honest brands in the tourism sector have not been immune to experiencing disruption in the past it for most tropical locations, it’s called Mother Nature. So there have been several ways that they can learn from the past and most of them look to building brand equity today that they can use for tomorrow. So if it today the most we can say is if you start investing in communications, then you will be well placed when a disaster strikes. You will not be immune to hurricanes typhoons, cyclones etc. Unfortunate Li, but you know, investing in some form of communications can help cushion you from potential impact. So I think a great learning example from this is the Philippines Department of Tourism, actually. And it’s not a current learning, it’s actually what they what they did in response to the 2013 typhoon hyena hits, what they actually did was, they used a campaign called It’s More Fun in the Philippines, where they asked Filipinos to share their version of the country, in Instagram photos and another content. So by eliciting this avalanche of free content of when that typhoon actually hit, they leverage that to help curb the potential impact on the tourism industry. And I think the interesting thing to note here is that consumers are actually ahead of advertisers right now. Consumers are looking forward, and most messaging is looking back. So as Christian mentioned, employees are now working from home. And that means they’re actually banking their vacation hours and saving them for better days. Some are even in the planning stages, or maybe just browsing. But it’s really important for travel and tourism to keep their offering or their destination, or their service top of mind right now, because it’s going to be key when travelers are ready to get going again, and I’m sure there will be a number of them. E marketer did a survey, and they actually asked how people plan to spend the money they save from their canceled trips. And 33% of them said they plan to rebook their vacation on another date. And even though this has been a critical impact for cruise for the cruise industry, and on the cruise market in general, cruise complete.com did a survey and they’ve actually had more people interested in booking cruises and have actually seen a 40% increase in bookings for 2021 Compared to 2019. So it’s really interesting because people are, as we think that people are not looking towards the future, they actually are and advertisers are messaging backwards. So if there’s anything we can give to the travel and tourism industry, it’s you know what message for the future people will be back traveling. Most of us that are sheltering at home are actually anxious, and probably a little stir crazy to get back on a vacation. And maybe the one thing you want to look at is domestic travel, because that might be the thing that’s most popular with travelers right now. 60% of travelers said they would travel within their own country, while only 19% said they would travel potentially outside the US for example. Maybe this is a trend that’s gonna you know, that is reflective of several factors including maybe economic uncertainty, the continuation of global travel restrictions, and a desire to support their local economy. So as much as I’m dreading or or sad about my canceled trip to Spain in May maybe check in my own backyard come September you know to the Maritimes might not be a bad thing to help Canada and you know to help your respective country get back on its feet.
Eli (00:18:32)
Maritimes are practically the same thing as Spain anyways, right?
Pam (00:18:37)
Yeah. Very, very close. There was water. Yeah, there was a body of water. So yeah.
Christian (00:18:42)
I don’t necessarily think that’s a bad thing. And I think if anything that kind of present, prevent, sorry, presents travel brands with a new opportunity to you know, pivot and be able to, like, show consumers that they can rediscover their backyard like you’re saying, Pam, I think that can be kind of fun. So I think and like you’re saying, I think we can all relate to the feelings of anxiety of you know, getting out there and then exploring a little bit but doing it in our backyard could be a good opportunity as well.
Pam (00:19:11)
Definitely. And I think that perhaps those travel restrictions being being lifted might coincide with the same time sports, sporting events or attractions are going to relaunch so you can think of what that costly battle for audiences limited in tension will be at that time if you aren’t currently. I’m going to say marketing opportunities to them today. That’s awesome.
Vitaly (00:19:40)
Meredith, your work within managing through uncertainty reports was a lot largely focused on media consumptions and changes in media consumptions for the consumers. And I think that’s almost like the foundation to what to what brands should use to plan a as their advertising strategy for the rest of the year, what sort of trends have you observed? And what? What are some key takeaways?
Christian (00:20:07)
Yeah, I mean, we could spend a lot of time talking about media consumption trends on this podcast, because people are spending a lot of time online specifically as they’re sheltering in place. And I think all of us can kind of relate to that, you know, seeing our screen time, creep up every day, and potentially watching shows that we never normally watch. I know, Eli’s a pretty big fan of reality TV, and he’s been watching quite quite a lot of that. And I don’t think he’s alone in that. So, you know, in general, consumption is up. But what we’re seeing across, you know, our platform and in our inventory partners platforms, is especially a spike in streaming content. And I think that intuitively as a consumer makes sense, right? Like, you’re born at home, and you’re streaming shows and videos, and potentially like how to videos and cooking channels, and whatnot, and fitness apps. So it’s really, you know, those types of trends, we’re seeing that it’s fairly intuitive. But I think when you throw some stats behind it, it becomes even more staggering for marketers. So for example, you know, from Nielsen, when consumers stay at home, their media consumption rises nearly 61%. So that just speaks to how much more time we’re all spending online. And on our own platform, you know, we saw a spike in CTV avails up to 40%. So that begs the question, you know, what are people actually doing when they’re increasing? All this time and hours spent online or streaming content? So, you know, we’re seeing a lot of interest on news and government sites, obviously. But something interesting that we’ve noticed is, you know, as the situation kind of unfolded, in the middle of March, news sites, traffic on new sites was spike, were spiking, and government health sites, whatnot, were spiking, but now it’s kind of leveled off. And I think people are getting a little bit tired of the Daily News, there’s a bit of fatigue that I mean, it’s still up considerably from, say, this time last year, that we’re seeing, like record numbers of people on new sites. But I think now we’re kind of past that initial phase. And we’re starting to see people seeking out new content and new ways to stay engaged and, you know, try to make this make the most of their time at home. So we’ve seen, you know, for example, fitness apps have the installs for fitness apps have increased by over 45%. Worldwide, from January to March. And and that’s just one of the types of things we’re seeing. There’s also been a lot of streaming and children’s content. And I think the parents who are listening to this can relate to that. We’ve seen up to 60%, more streaming of children’s content, because kids are at home as well. And they’re seeking to stay entertained. So I mean, from a media consumption point, that’s kind of what we’re seeing. But I think the more interesting thing is to think about which of these trends will kind of persist over the few months, this coming months, and potentially, you know, as people are, I don’t want to say the word release by once we’re, you know, allowed to kind of go back out there, you know, which of these trends will really stay, you know.
Christian (00:23:29)
Something that’s really interesting to think about. And I feel like I’m going on a bit of a monologue, but again, I have a lot to talk about. And so I’m not sure if anyone has anything to add to that that piece so far.
Eli (00:23:43)
You know, Christian said it takes 66 days to form a habit, but it only took me two or three days of reality TV to become totally obsessed.
Christian (00:23:52)
It’s different for everyone.
Pam (00:23:55)
We’re baking bread, I think during those 53 days, where you…
Christian (00:23:59)
Yeah, exactly. I mean, like, it’s interesting, that the last point that Meredith brought up, I think is one of the more interesting ones is, you know, obviously, things are changing right now. But when things do go back to normal, and, you know, seemed to have a semblance of what they were, you know, back in 2019, or at the beginning of the year, like which one of these habits are here to stay. And I think it’s interesting to think about that. It’s hard to predict. But I think that one of the effects that may last and you know, it’s still, it’s all, it’s all it’s all tough to predict, but I think that one of the things that may last which is what you were talking about is that CTV, OTT subscription and the absence of the live sports hiatus. The fact that people can’t watch live sports on on cable TV on linear TV anymore has maybe, you know, caused them to stop paying for those services and move over to a Netflix or prime or a sling or what have you. And you know, when things go back to normal and live sports start to resume again. How many of those people will move back to live sports, you know, likely a lot, but there might be some that linger and stay with their subscription services, which could put a lot of pressure on the big broadcasters to invest more dollars in CTV and OTT formats and potentially present a lot more live sports and that way. Again, it’s hard to predict but that, you know, that would that’s definitely something that’s been hugely impacted.
Christian (00:25:24)
Yeah, actually, I was tuned into a webinar that Sandra put on, I think it was yesterday, the days are starting to blur together a little bit. But they talked about how, you know, we talked about sports being canceled. So where are these sports fans? What are they doing right now of sports on on? What are they watching. And they actually mentioned that the average consumption time for sports fans has gone up, compared to like what they would normally watching. And it’s a higher than most people because they don’t have that kind of set TV time, like that date with a specific, specific game. So they’re streaming more, and they’re actually streaming more reality TV, compared to other types of content. So maybe it has a similar type of pull that sports does.
Christian (00:26:10)
But I think, you know, when we talk about sports, pay TV subscriptions is usually the last thing I’m sorry, linear live sports is the last thing tying people to their pay TV subscriptions. And a lot of people up to 30% of users said that they would cut the cord if they knew they could stream that content elsewhere. So I mean, I think we’ll see a shift there. And I think as users are become accustomed to being able to stream what they want, when they want to watch it, you know, sports providers will have to kind of shift and follow that as well. There’s also been like a huge uptick in eSports. And I personally am not a gamer. But I know some people on this podcast are so they can maybe speak a little bit to the gaming aspect of things. But something I find really interesting is that NASCAR actually put on an Esports broadcast with iRacing, and Fox, and they got pro NASCAR drivers to do like an eSports. Race on and then they streamed it. And in March, I drew over 1.3 million viewers, which is like pretty staggering for people watching video games. And I think, you know, we’re seeing this trend with eSports kind of exploded, this was happening before the current situation. And now I think it’s just going to be exacerbated by you know, the cancellation of live sports. So I think that’s really interesting.
Christian (00:27:37)
I mean, I think you’re referring to me as the gamer on here. But I, I actually, funnily enough, have not been really tuning into any eSports. And what I’ve been replacing, I think my sports consumption with, if I look at myself, as a consumer is definitely more streaming. A little bit of reality TV for sure. You know, there’s some interesting stuff on Netflix. But I’ve been, it’s been 48 days since the English Premier League was canceled, so I’m counting the days. It’s not it’s not canceled yet. It’s it’s still only suspended. So there’s hope there, but not 10 days. So that’s a habit. It’s close. And you know, I might never go back. It’s hard to say. But I think one of the one of the major forms of content that I’ve been consuming, and this might just be me is like a lot of like memes and you know, following like the former sports stars that you had been watching and like seeing what they’re up to, and like that kind of different types of short form content, which is often on social media, but even like new platforms like quibi, I believe it’s pronounced I don’t I, I might have mispronounced that. But I think that like that’s kind of an interesting thing that’s been rising up lately. And who knows if that will continue on normal production comes back.
Pam (00:28:47)
I think the interesting thing here to note, though, is that there was so much emphasis put on a live event, which, you know, is understandable. But I think the sports brands and they are brands, right? Teams are brands, the NHL is a brand the NFL is a brand. I think the interesting thing here is that they’re discovering that their content and their library of content has a role to play online. I find myself consuming all the NHL classic games that are being shown I even go back into my NHL game center online and watch the old games. And I think it’s this just has proven to potentially the sporting industry that their brands don’t need to be live all the time. And I think that people are also getting really creative to your NASCAR eSports example Meritus f1 just did the same thing. Not to mention the f1 drive to survive episodes on Netflix, which was a remarkable branding strategy that they did even before the pandemic hits. So I think it’s an interesting thing landscape for them now. And I think there’s a lot of creativity and learning that, you know, has come out of it as a result.
Eli (00:30:08)
I just gonna say so some more emphasis on like creating a content library, because you know, you mentioned drive to survive like that, that turned me into an f1 fan. Yeah. So if other leagues and other brands had created things like that, there’s content that, you know, is year round, right. It’s not just during the season, it’s not, you know, just the trade deadline or, or the draft. It’s really a branding play that, you know, steps aside steps away, I suppose, from, you know, the traditional game.
Pam (00:30:39)
Exactly. And speaking of draft, that NFL draft 2020 was the most viewed draft ever in the history of the NFL.
Eli (00:30:47)
Well, people people are starved for content. That goes, that goes.
Christian (00:30:54)
Well, it’s pretty clear that you know, people are looking for this content. So what does that mean for advertisers? Because, you know, the spring sports season alone? The the advertising budgets, there are over like, $2 billion, right. And then with the cancellation of the Olympics, as well, I think there’s a stat there that NBCU was standing to lose over I think, was $1.25 billion in advertising commitments. So these are massive budgets. Right. And so now, you know, obviously, there are people are being conservative and saving costs, but you can’t just save all of that money and not funnel anything into and to advertising. So where does that really leave advertisers who had made some of these commitments? And now there’s no content to advertise on? I think that’s something that maybe we should we should chat about a bit, because I think, you know, with budgets like that online, it’s going to create competition between advertisers as if everyone’s trying to reach the same types of users. And they’re only kind of focusing on reaching them on these NFL draft events, or, you know, these old games or whatever, you know, it’s gonna be quite competitive. So, as advertisers like, how can you decide what budget should go where and still stay competitive and not pay like a premium for these specific slots. So I think something worth mentioning here, I don’t know, there’s two points here that I’d like to talk about, I think, like we’re seeing from this conversation, sports friends are found everywhere. And you can kind of find them across different channels and use different audience strategies to do that, right. So you can find the Eli’s of the world who are now watching reality TV by, you know, targeting a sports fan audience across different channels. Or if you’re trying to tap into those, you know, high highly competitive events like the NFL Draft, or some of the old sports games, or whatever it may be using leveraging tactics like programmatic guaranteed to kind of secure that inventory, away from your competitors, and make sure that your brand is staying top of mind to these sports fans who are clearly hungry and ready to come back to you. Once this is all over.
Christian (00:33:02)
Yeah, that’s a really good point. And I think like one of the one of the underlining subjects of that is, you know, whether or not you should be advertising right now. And I think that when it comes down to it, I had a chat actually, with this reminds me I had a chat with John Shaughnessy, who was you’ll see in one of the episodes coming up. He’s the head of data strategy at live ramp. And his number one point was along those lines, it was don’t stop advertising. Perhaps that that’s wishful thinking. But the numbers that he gave me really back it up. And I’ll just talk about a few of them now, because it was one of the key things that I took away from the chat. And it’s very relevant to what we’re talking about right now. So dating back a century, studies found that those that keep spending on advertising actually come out ahead. So the Harvard Business Review, said that during the recession in the 1920s, companies that maintained advertising or increased advertising, saw their sales grow by 20%, coming out of the recession, while those that reduced or stopped their spend saw 7% decline. And then in the 1980s, when you had the recession, in the late 80s, McGraw Hill research found that b2b companies that maintained or increased advertising saw sales increase of 275% in sales for the next three years, you know, which is really significant. And it’s not really saying, you know, it’s not really a selling aspect, but it’s really just the insights that are being drawn throughout history, that pulling back on advertising seems to be a common default. You know, because it’s a cost. And, you know, when companies are in financial trouble or in a recession, they want to focus on on saving on costs. But as history has shown, advertising is like directly correlated with sales. And so, you know, pulling back, say, in a scenario where you pull back a million dollars in advertising, that’s also potentially pulling back 2 million in sales. And so although the intent is good, and the, you know, the reason for doing it is strong, it often actually has a negative impact. And there’s the last thing I’m gonna say is there was for me In reasons that John brought to me, and you’ll hear this on the podcast, but I, I just thought they were great points. The first is the noise level drops when competitors cut back spend. The second one is the cost of advertising drops, which yields better deals. The third is that advertisers are projecting stability and a difficult time, you know, if you’re not advertising, it kind of, they might raise eyes, unfortunately, about about, you know, how that how that brand is doing. And then the last one is that the share of voice really leads to share market. And, you know, it’s really what the data the data backs up. And I think that that was like the main thing I took away from that chat. And it’s a tough question that really changes brand new brand.
Christian (00:35:38)
I think though, to that point, Christian, you know, it does change brand, a brand, if you want to decide, you know, if this is the right time for your brand, but I do think that this will, you can’t you can’t be advertising today, like nothing has transpired. I think, you know, you have to update your messaging and your strategy to kind of follow not only the consumer trends, but just to stay, you know, on tone not to be turned off or anything like that. And I think this kind of lends itself to, it kind of presents an opportunity for brands to get a little bit creative. I know Pam and I were sharing yesterday. Yeah, there’s some advertisers, it seems like some of the ads right now all have the same tone of we’re in this together. And, and, you know, the sad piano music kind of playing and, you know, like, let’s do let’s manage through this. But I think, you know, there’s, there’s definitely a need for that type of advertising. But I also think there’s room for innovation here. And, again, bringing it back to more tangible things that brands can do to help consumers and putting those things for, like, you know, back to the travel example, hotels right now are putting up health care workers on the front lines and doing those acts. And, you know, creating some sort of messaging, but that actually saw a dove campaign yesterday, talking about hand washing, and they said, you know, we don’t care what type of soap you use. And this is a dove, right? That we don’t care what type of soap you use, we just care that you care, and it was promoting how to wash your hands and making sure you’re doing it for an appropriate length of time. So I feel like those types of ads, you know, really forcing brands get creative and providing like tangible information for consumers. That’s something that you can consider doing right now.
Vitaly (00:37:27)
Yeah, that’s awesome. Meredith Actually, your you know, to your point of competition, I absolutely agree. You know, you kind of have a twofold challenge here. Because if every brand has more or less the same message right now, and they all stuck advertising within one basically channel, which is digital. So how do you really stand out? And I think, you know, that’s where that’s where they have to over invest potentially, in, in creativity, that they put behind the ads that they actually promote, because otherwise, everything just becomes very bland, very much the same. And combined with the notion that Christian was saying that, if you’re not advertising, people start questioning, is this brand even relevant? Do they even exist anymore? So you kind of stuck with that balance where you want to continue advertising, but you have to really, really reinvent yourself? But Eli, I had a question to you specifically around how our advertisers have been adjusting their media spends in relation to the changes in media consumption, for example, connected TV, obviously, you know, we’ve seen a huge spike in in people using that channel, but have advertisers really jumped on that opportunity.
Eli (00:38:40)
Yeah, you know, I feel like it comes in in phases. So as you know, reading a study, actually, by pixelate that it was comparing the first week of March the last week of March, and it actually showed, you know, a 14% drop in, you know, OTT and CTV spend throughout the month, which I thought was interesting, because, you know, my personal experience has actually been, you know, it almost makes sense, people are home, their TVs are on more, you know, the kids are home, they might be watching educational content or children’s programming, it makes sense that there actually be a, you know, a rise in CTV spend. And I feel like that, you know, 14% drop was probably indicative of, you know, the uncertainty of the beginning of the pandemic. And, you know, I know, at least on StackAdapt, we’ve seen an increase, you know, since then, as things have started to, not necessarily normalized but the current situation has become a little more normal, in the sense that everyone has kind of realized that, you know, we have to be in market. CTV is a channel that makes sense from from a logic standpoint, you know, like I said, people are home screens are probably on more than ever. So definitely have seen that. That was probably the most frequent question I actually got at the start of, you know, say Shelter in Place was, what have you seen when it comes to CTV? And you know, The answer to that would be, we saw it we saw it drop initially, just as anyone would see. And then it started to steadily rise, you know, throughout their, from their sorry.
Vitaly (00:40:10)
You know, obviously, you know, we’re seeing changes in, in, in where agencies are deploying their the brands budget. But what sort of sentiment? Have you heard, just overall from from brands and from agencies? I would imagine that obviously everybody’s business is impacted. So are there any positive sentiment that that you’ve been hearing? Are there things that people really looking forward to? Coming out of this lockdown?
Eli (00:40:39)
Yeah, so can really only obviously speak to the digital component of things, but I think everyone, you know, times are tough for everyone. And that goes from technology partners, to agencies, to brands. And I think everyone’s, you know, cognizant of that, but, you know, some of the things that are interesting that, you know, at least I’ve seen some conversations, you know, circle around, and, you know, I think Pam, Christian, and Meredith actually all kind of touched on this was budgets, shifting towards digital. So, you know, when I speak to digital buyers, that’s obviously something that’s, you know, of interest to them, where, you know, all of a sudden, your billboard, you know, at the busiest intersection, downtown means a little less when, you know, the foot traffic isn’t there the same way, you know, conferences, and, you know, out of home budgets, in general shifting towards, but towards digital as being like, the primary channel to reach people is, you know, obviously, something that’s exciting for any digital buyer. So I think that is something that people have been, you know, fairly focused on. And that’s kind of, at least from the digital sphere, like some sort of bright light, I suppose. But then also incorporating, you know, cool and interesting strategies, you know, based off of the current situation. So like, we’ve been working with Nielsen and comScore to do you know, linear TV retargeting, which I think is a great extension of, you know, broadcast television, like broadcast isn’t going away anywhere, but anytime soon, at least. But being able to retarget people who saw, you know, a specific broadcast program, or a specific broadcast ad, whether that’s, you know, a competitor, or your own digitally is potentially a great use of, you know, some of this newfound budget from out of home.
Vitaly (00:42:20)
Very interesting. Pam, with respect to agencies, and I think this question would be really relevant to you, because you, you led the research project last year, around around producing the report called blueprint for growth. What sort of changes do you do you expect for agencies in the coming in the coming months? And what should be what do you think they should be really focusing on, on the short term?
Pam (00:42:46)
So it’s interesting, because actually is around this time last year, where we surveyed marketers and agencies about 200 them in Canada and the US, and we really focused in on mid market agencies to help uncover how they can thrive, you know, in the ever changing ecosystem, and provide actionable insights. Well talk about an ever changing ecosystem. It they’re in, they’re in, they’re in the throes of it right now. So when I look back and think back to that research, there were three key takeaways that really stood out then that still applied today, especially today and in the long term. So, marketers, you know, we uncovered that marketers believe my market agencies offer more access to lean years, you know, to senior leadership with more stable teams, personalized service, and agile responses to client needs. So there is that advantage of being perceived as a partner rather than a vendor. And I’ll stress partner right now. Marketers see mid market agencies as having a unique value proposition was the second key takeaway. They provide a feeling of once again, partnership that emerges through cultural alignment, transparency, trust and ever important today communication. It’s not only held by marketers this perception, mid market agencies were twice as likely to perceive themselves as partners to their clients. So key takeaway number two, still focusing on partners. And the one thing right now that is, I think critical is those mid market agencies tended to prioritize retention, over and renewal of existing accounts. So if they prioritize that retention yesterday, then they should be seeing it come out in spades today. fundamental to the success of that brand agency partnership once again, sorry, it’s it’s becoming a very well used word is that they have a feeling that both sides have skin in the game. So right now, there is a whole lot of skin in the game for a lot of brands and their respective agency. Just so, you know, basically, marketers highly value those agencies that are proactive, and that come to the table during their homework, right? And that they can take time to look forward and identify potential pitfalls will right now there’s huge pitfalls. So what is it that you’re going to bring to the table? And how are you going to demonstrate to me that you have skin in the game as my partner, so it’s a partnership factor in spades. It’s what we uncovered, then it’s what’s coming through today. And it’s what’s going to carry them in to the future. As much as agencies are looking for answers from their partners, like US brands are looking for answers from their agencies. And the bottom line is, if agencies can’t make their clients win, then they can’t win either, not just today, or in the short term, but I think for all time, so I think one thing is crystal clear. Don’t abandon your clients, keep that relationship close. Encourage your clients to keep or your brand those brands to keep customers close. There’s a sense of partnership and a sense of, as I mentioned skin in the game, knowing that nobody’s abandoned each other at this at this juncture. And I think that’s going to really drive things home for agency for the rest of 2020. And definitely going into 2021.
Vitaly (00:46:27)
You know, you’d like you had some interesting examples of what businesses currently do to stay relevant to reinvent their business model, maybe it would be interesting for you to share them.
Eli (00:46:37)
Yeah, definitely. I think that relates to you know, Pam’s point of you know, seeing yourself as a partner, like you said, things aren’t ideal. And, you know, we have to kind of figure out a way to overcome and, you know, stay relevant together. So I’ve seen things like, you know, catering companies that do weddings and conferences, you know, switch to, you know, food delivery at home, where they deliver, you know, raw meat and veg and produce and whatever it may be, for people to, you know, cook almost like becoming their own, you know, chef’s plate. You know, on the flip side, I’ve also seen spin studios, you know, advertising that, you know, bikes are now for rent, which to me is unbelievable way to, you know, pardon the pun, but adapt, because of things like that, and, you know, creative and innovative ideas, where you can say like, this is our business, it’s kind of on pause for now, because of the current situation. But overall, there’s still something here that we can, you know, not necessarily I don’t want to say capitalize on but we can stay active with, you know, make sure that we keep the lights on, at the very least.
Vitaly (00:47:37)
With agencies, perhaps, you know, understanding the dynamics of the media consumption, maybe they could potentially pivot into other offerings. So, for example, to our point that there’s a huge surge in digital, so if the agency has historically been very focused, maybe on traditional channels, this is an opportunity to accelerate that transformation into more of a digital focus type of agency. Maybe there’s opportunities to heavy up on creative services to help brands quicker, adapt to changes within the market. So there’s probably a lot of opportunities for agencies in the market to, to use this as a as a growth opportunity.
Eli (00:48:17)
You know, the transition from say, traditional media to digital media, I think is, is probably the most obvious or apparent, one of the bunch. But it extends exactly into that point. I was saying where it’s, you know, we have this brand who was transition, you know, how this brand does business for the time being as well, right. It’s not just the channels. It’s also just the essence of the business that points.
Vitaly (00:48:41)
Well, team, I feel like we could speak here until Friday, end of day, which is in two days. It was very enlightening for me to hear these perspectives. I really appreciate your time, today, and I hope whoever is listening has gotten value out of this. So thank you all so much for for joining and taking your time out of the busy schedule. And yeah, I look forward to seeing you in person at sometime in the future.
Awesome. Thank you very much. Thanks, Tyler. Thanks, everyone.
Episode Outro (00:49:16)
Thank you very much for tuning into this episode today. If you like what you heard, it would mean the world to us. If you do these three things. Subscribe to the show and leave us a review. If you’re listening to this and know someone who would find this episode valuable. Please share it with them. And finally, please share it on LinkedIn. If you have questions or feedback or would love to learn how agencies or brands work with StackAdapt, find at www.stackadapt.com. Thanks for listening, and I’ll see you next time.
