It was around early February when the world began hearing more murmurings of the Coronavirus taking off in Wuhan, China. What could largely be dismissed by many as just another virus that would never grab a hold of Western society, the opposite began to occur. What started out as a promising year for traditional advertising businesses, turned for the worst and put companies to the test as far as understanding the fallout from an imminent global lockdown.
In this piece we will speak in accessible terms by telling a story of how everything took place starting with the Mobile World Congress event and the subsequent unknown. We will then move into the second part of this piece regarding the New Era of Solutions and go into detail regarding financial strategies relative to advertising and marketing.
From todoMobile’s standpoint, we feel that this pandemic has been the ultimate test in survival skills and perseverance across all elements of business. By providing as much value up front to both existing clients and prospective new business, while maximizing efficiencies, companies on the bubble will stand a better chance of getting through this period of uncertainty with immense strength that will continue to foster positive business outcomes.
As it happened, MWC seemed like it was still going to take place up until just under two weeks before the scheduled show. This seems laughable now, but that was the case. todoMobile had its exhibition space secured within our usual Canada Pavilion location in Hall 8 and it was uncertain whether the event would move forward. This show took months of planning ahead in order to meet face-to-face with major stakeholders within the mobile advertising space. When major exhibitors decided to pull the plug on travelling to the show, the dominoes started falling and the show was cancelled with many stakeholders having no recourse on obtaining travel refunds.
Arriving in Barcelona was a big wake up call. Local advertisers had gotten wind of the imminent wave that had started in Northern Italy and reacted accordingly by pulling the plug on any new activity. Sports tech could prove to be a useful area to pursue but what if all major sports were to be cancelled next? Surely, esports and gaming could allow for advertisers to leverage the upsurge in traffic taking place within the sector.
Upon returning from Barcelona, Advertising Week was taking place in Mexico City. The main conversations that were taking place were positive in that brands were not looking to reduce budgets in any way. If anything, they were going to increase spending and move aggressively into their spring seasonal campaigns. For instance, a major airline that was pushing forward to promote new routes had allocated significant budgets to an awareness campaign and the geo-targeting that was involved was so granular and so precise that we were able to utilize a combination of methods ranging from traditional GPS to spatial analysis in order to get the best behavioural data possible of potential travelers. Needless to say, the airlines took the biggest hit when COVID hit and other brands were to follow in taking a conservative step back to maintain the current “safe” activity within the walled gardens where campaigns endure the outcomes of algorithms and dynamic CPM’s. Finally, it became apparent that if anyone was going to go outside of the norm within new Paid Marketing channels, there would have to be extraordinary circumstances to consider running any new test.
With only the main major hubs being available for essential travel, anyone that was abroad had to make decisions quick. When Prime Minister Trudeau said that it was time to come home, I decided to remain in Mexico City. After all, our office in CDMX was going through a transitional period and business, along with health, came first. Stepping on a plane to go back to Canada was not going to be an option. The reality was that direct flights would indeed discontinue for the foreseeable future and walking through airports is where this virus is spread in its most ferocious manner. Furthermore, the idea that everyone would now have to work from their home office was a moot subject as todoMobile had been operating in a hybrid home/office fashion for years with zero constraints.
Business contractions were inevitably going to take place next. Underperforming, non-essential, or redundant areas of a business were singled out (albeit not always fairly or at the fault of the employee). It’s the unfortunate reality of 2020 that when marketing budgets must be cut, certain departments will have to be contracted. This led to a path of inevitable layoffs that took place.
A plethora of layoffs started to take place at the end of March and into April. For many that are still on the hunt for their next opportunity, it is undeniable that it’s an immensely unfortunate, daunting, and stressful occurrence to unexpectedly lose a job. One can pinpoint business contraction decisions that lead to the dismissal of arbitrary individuals as this is often how it is presented. The reality is that it’s a business decision at the end of the day and probably for the best of all parties if it is done sooner rather than later, with a few months of severance support to help keep former employees afloat as they look for their next opportunity.
A quote from the famous film Wall Street.
The unknown is a scary thing to have to think about. The unknown is just that though; unanswered questions that can only be answered with action and time. To sit around and to wonder what should come next is simply a waste of time. The unknown allows many people to find their character, explore new things, find their passion, and to do something that perhaps they should’ve been doing before. This could be an ongoing exercise, for example developing healthier habits and focusing on a personal project that was abandoned long ago. The unknown is therefore not necessarily a negative thing if you reframe your thinking and instead regard it as an opportunity for change and improvement. It can be one of the best things in the world.
This section will likely resonate with many whom have had difficult moments in this first half of 2020. From a personal point it provides context to what a company may feel and that an individual may have felt. The real solutions moving forward allow companies to hone their business strategies to be more effective, generating greater returns, and the only way to do this is to be fiscally responsible and to focus on solutions that yield the best results. We will now dive into further details regarding how to go about this moving forward.
A new era of solutions quickly became very important. Many stakeholders in the advertising business began to adjust their strategies with existing and new programs to generate opportunities that would not otherwise be available during this pandemic. Needless to say, 2020 has been a year of adapting to changes as employers and employees alike navigated the new normal and new practices became commonplace.
The idea that companies such as Zoom and Microsoft could benefit tremendously from a pandemic is of no surprise considering their abilities to create strong products for remote communication. If anyone paid attention to how Zoom’s stock in particular skyrocketed over the course of the first 3 months of the pandemic they would quickly see that there were going to be some big winners as a consequence of the lockdown.
The final solution of the lockdown was perhaps over the top in that everyone was not only encouraged to stay home but, in some places, it was the law. It was inevitable that diminishing your activity outside of the home would allow for certain businesses to thrive. For example, with restrictions to how much time could be spent outside and in the company of others, home exercise was able to make a big comeback.
Many obvious questions start to pop up for management as they tackle new problems within the workforce. The main one being, why didn’t we allow remote working prior?
The idea here is that management and finance committees should more regularly start to have a dialogue that would be beneficial to the bottom line and to the well-being of all. There is sometimes fragmentation that takes place between finance and management that can make it difficult to bring the two together in a way that is constructive. With remote working taking place and the physical office reduced in size, P&L can be improved in such a way that cost cutting has an immediate effect.
There have been many times when AR calls with Finance could turn ugly. Things like providing generous credit terms along with a lackadaisical attitude on collecting can send any company into the red quick. Making non-essential cuts to any business can be a tough decision but it is made a lot easier if other areas such as collections are done in a consistent manner.
Next we will dive into marketing and ROI driven campaigns, which can be the cornerstone of getting ahead during these turbulent times. For all intents and purposes this paper is going to take a massive turn into the digital marketing realm so bear with us on the marketing terms if they are new to you.
ROI driven campaigns are essentially performance related in that they are always tied to a variety of KPIs (Key Performance Indicators). Campaigns that are launched but not tracked and solely focused on branding, awareness, and recall perhaps shouldn’t be the main priority moving forward with brands. Perhaps they should instead consider and focus on the hard facts of measuring post actions or sales.
Performance driven campaigns can be applied to almost any type of product or brand. It’s what is utilized for measurement that counts towards a conversion, a sale, or any other type of action that is counted towards performance. With many marketing tech solutions out there, it is a wonder that many brands are not as well versed as they should be, at least on mobile where most of the best traffic is heading. With all the data available in the marketplace, one may again ask why weren’t we investing wisely on ROI driven campaigns prior to the drastic changes that have resulted from Covid-19?
It’s no surprise that Zoom has been a massive benefactor of the pandemic. Other video conferencing solutions such as MS Teams owned by Microsoft was a solution that was embraced by the todoTeam and has been instrumental in maximizing efficiencies with external communications. Outside of video conferencing were the ecommerce type solutions or online shopping that have seen a significant surge. Amazon is one of the most obvious e-commerce contenders with an increased number of households globally now relying on Amazon for the majority of their online purchases. Many consumers may now be asking themselves, “Why didn’t we shop on Amazon more often before?”, due in large part to the convenience, wide variety of available products, and efficiency that the website provides to consumers. Another heavy-hitting shopping site that is auction-based, eBay, also experienced a significant increase in stock value during a time when an increased number of consumers were likely selling off personal items to create residual income during tough times.
All in all, it’s worth highlighting that outside of these obvious sectors of video conferencing and online shopping, the app world has two other sectors that have also gained a tremendous amount of organic uplift.
So, your videos are costing you a fortune in hosting costs because the deployment of your campaigns rely on one of the two big cloud solutions. In today’s digital environment, it makes sense to put a magnifying glass on everything and, yes, that includes your server costs. Some may think that advertising in general is a creative industry that doesn’t get too techy but the back-end of all digital campaigns that is responsible for how they are served is fundamentally overseen as a fixed cost when it should actually be seen as a capital expenditure.
If production can’t run as normal because of physical distancing restrictions, animation is a great way to get your message across. The reality is that content now is being consumed at a rate that’s never been seen before and it can be tough for brands to keep up and cut through the noise. The vast majority of people that have been able to work from home are now consuming content on multiple devices and for greater periods of time throughout the day. In order to keep up with consumer demand and keep your brand relevant, distributing more animated content is a simple solution for creating value and effective storytelling in a unique and engaging way that can elevate your brand.
Take, for example, a Televisa spot that was aired on the Sky Network. The spot was produced in full 3D animation depicting a virtual city similar to that of M in Metropolis with recognizable landmarks and corporate buildings.
The commercial highlights various brands within the native city landscape, presumably already part of their advertising network in order to pay homage to each client and their respective adaptation to the new world situation that we live in. Delivery people can be seen wearing masks, trucks continue to unload, and businesses stand tall throughout. Although the renders seem relatively basic in their composition, the concept of providing a spotlight on each advertiser and the importance of their respective roles in society creates the vibe of a community that is held together by the media conglomerate.
Strategic KPI’s seem to be an area of discussion among managers, marketers and executives alike. How can we really define strategic KPI’s in order to grasp their importance and to structure the numbers (or the indicators) in a way that creates a target that is attainable for all relevant parties? The answer is most likely that goals versus strategy should be sought and discussed in tandem so that strategic KPI’s are essentially selected organically. Strategic KPI’s can therefore be defined by keeping tabs on progress towards the common goal of a team. It’s that simple and can be relatively fluid. More than ever, now is the time to have those strategic KPI’s in place. It’s more effective to have the top-down effect of these indicators trickling down to operations to have a closer look at real time measurements. For the purposes of strategic KPI’s its more about walking the talk and setting up or designing a list of actions that will get a team from A to B. The specifics of the KPI’s here can vary according to the destination and likewise they can be monitored over time in order to get a good understanding of progress.
When we are able to discuss performance KPI’s from an employee standpoint you may get a few facepalms as far as everyone taking credit for the same thing, or minuscule type measurements that basically turn people into AI creatures. The fact of the matter is that management should come to certain agreements with employees as far as what is realistic and attainable in terms of revenue, profit, task completion rates, etc. It’s a tricky science when done from an HR perspective and it should be encouraged to find a balance between the human dynamic of relationships and individual attributes, versus ratios.
For the purposes of this paper, we will provide further detail with regards to performance KPI’s and how they are relevant to advertising campaigns. As we’ve seen in previous growth-related blogs, the idea that campaigns need to have some basis or number that needs to be measured against is indisputable. Running a campaign blind and hoping for the best, otherwise referred to as the spray and pray mentality, will fail even if it’s a branding campaign. It’s imperative that your campaign is strategic and tracking towards specific goals and objectives that have been set in place and agreed upon by all relevant stakeholders. Otherwise, it’s the same as going to a poker table as an amateur against a bunch of major pros and hoping for the best. If the top-down approach of any campaign can be tied to an effective cost per action then that will probably be the number that is measured at the end of the quarter, month or day. How close dynamic campaigns are towards reaching their goals can depend on a number of factors, but the reality is that organic growth is measured in parallel with paid campaigns and this can create a certain shade of grey on who or what partner can take credit. Granular reporting can either become very transparent or can be black-boxed or censored so that little to no optimization can be implemented. When clients buy on a cost per install basis, it can be susceptible to non-transparent partners that re-broker.
Third party tracking providers certainly play an integral part in providing the right set of tools for measurement of performance to take place, but the main numbers everyone should be paying attention to is essentially conversion rates.
When we move towards brand recall, the term can be easily confused with brand recognition and this should be deciphered immediately as the two couldn’t be more different. Brand recall is far more important in the grand scheme of things when we are speaking about digital advertising. If a consumer is able to remember your brand without any outside assistance, it is indeed a significant achievement in that brand power is reinforced in such a way that advertising dollars that go towards branding campaigns demand the budgets that they do. The idea that an advertiser can have a level of visibility whereby they can see how well a consumer is familiar with the respective brand can be supported by market research campaigns.
Brand recall can indeed employ online panels, in which various nuanced strategies are leveraged to help determine brand power and how consumers view a brand. Most importantly is through data base measurement that brand attributes can be ascertained with specific metrics that ultimately communicates how likely a customer will remain loyal to your brand versus the competition. As mobile panels become more and more sophisticated in measuring the online habits of users, brand recall is indeed being tracked by most of the major FMCG’s and that’s a big reason why their stocks continue to perform during these uncertain times.
Third-party services that essentially create ads and buy media placements for marketing teams can provide a high level of efficiencies that save money for the department. Marketing programs that are planned internally have a lifespan that is finite and can deter away from ongoing tasks. Whether an ad agency has a global presence or is a small outfit, strong corporate finance and accounting is essential. Just as any other business produces balance sheets, income statements, and equity statements, ad agencies have to do the same thing.
An agency’s cash flow will largely include income from campaign commissions and other media sales to advertisers. Many agencies have long term debt based on the fact that many advertisers have flexible payment terms that allow for upwards of net 60 days (to even sometimes net 120 when dealing with European clients). It’s easy to see on an income statement, for instance, a breakdown of the sources of revenue by categories, revealing which sectors, clients, and markets are generating further investment.
The importance of a monthly profit and loss statement allows business leaders to understand what measures need to be taken to ensure the company is on track for success. Moving forward, P&L is taking on a life of its own. Usually a business may have to wait a month or two before one is able to properly make calculations. However, with a current client set to keep their business with the agency for the foreseeable future, leaders need to do this on the fly.
Many business leaders who have had tremendous start up success have said that the cost of outsourcing accounting versus learning it on your own is invaluable to a company’s success. Basic bookkeeping can allow anyone to calculate P&L based on the variety of factors that a business needs to determine in order to get to gross profit. This can be done up to every 2 weeks to no more than 1 month in order to track and improve where needed so that additional profit can be identified and sought.
Just as the stock market is becoming more consolidated, so should a business’s strategy in terms of picking a small pool of strategic partners that they are able to grow with in parallel with testing smaller partnerships. This allocation or balance can be anywhere from 80-20 to 90-10 as far as maintaining an astute formula for success. This is because the consolidation allows for trust, learnings and success while the testing of smaller partners can allow for an edge that doesn’t turn into a double-edged sword. There have been a number of agencies in the last few years (and probably still to a lesser extent now) that were and are testing upwards of 200-300 partners on campaigns. Such testing could generate big problems such as lawsuits, fraudulent traffic and the mismanagement of budgets.
Now that everyone is refining their strategies, consolidating your trusted partners and growing with them at a healthy rate of 10-25% in revenue increases is a proper suggested model for maintaining success. In many agencies client relationship kickbacks will occur and this is something that benefits few individuals in the long run. It makes more sense for managers to do good work with their partners and for it to be recognized internally, rather than to ultimately kill the client’s wallet along with purchase power.
There are all kinds of way to measure the performance of client success managers. For the purposes of this paper, it’s all about the relationship. The advertising business is based on relationships. Most client success in general is based on relationships. How those relationships are fostered, reinforced, and organically grown is not a science at all. It is a human connection that everybody is capable of igniting through their own unique personalities. Now that the world has gone remote and most are conducting communications through email, video conferencing meetings, and other online chatting, it’s becoming more and more challenging for client success managers to get out of their shell and to work outside the box. However, this pandemic should not be an excuse for any online business to suffer or go under. Everyone should be able to come out of this with stronger business relationships that were able to grow even in a remote environment. By thinking and acting strategically in all facets of business, Covid-19 might even be regarded as a positive event that enables us to not only grow our business but also our human connections. It’s all just a matter of perspective.
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