How are marketing strategies evolving in response to COVID?

Organizational Structures

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 which 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 1.1 Source- https://theintactone.com/2019/05/05/cam-u3-topic-2-information-systems/

The Operational Management contains within it all the functional units like Marketing, Operations, HR, Sales, Accounts, to name a few. Each function of a company serves a different purpose that together makes up the company as a whole. The focus of the article is on Marketing and how it has evolved during the pandemic to better serve the customer and the company alike. Many organizations are now eliminating the concept of Functional Silos and embracing the concept of Business Processes that cuts through multiple Functional Departments towards an end result, for example, Salary Processing, Account Invoicing, Product Delivery.  

Fig 1.2 Source- https://foundersguide.com/functional-areas-of-a-business/

Current Trends

COVID-19 has drastically shifted the way consumers behave, and therefore it is fundamentally necessary that marketing efforts also align in that direction. Certain industries like Essentials, e-Commerce, Gaming, EdTech, Entertainment, to name a few, have flourished during the lockdowns and have seen increased activity/business while other industries like Travel and Tourism, Hospitality have seen better days. This section aims to cover the current trends in marketing during COVID-19 so as 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 search terms had risen alongside it. Companies like Zomato and Swiggy have upped their ad spending on digital marketing, and their YouTube advertisements all this time was focused on the "No Contact Delivery" of the customer's favourite food.

Fig 2.1 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 2.2 Source- https://www.datafeedwatch.com/blog/how-coronavirus-changes-ecommerce

Ecommerce 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). 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 2.3 Source- https://www.datafeedwatch.com/blog/how-coronavirus-changes-ecommerce#coronavirus-vs-ecommerce-data

Amazon.com is one of the few companies that have gained significantly since the lockdowns began, with the image showing steady growths YoY (year on year) from the previous year. As the lockdowns progressed, traffic increased, further contributing to sales on the website. Customers on Amazon spend a whopping US$ 11,000 per second, which is unbelievable!

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 has 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 spectrum has not resumed with full force yet, thus impeding research as well. People in isolation are turning towards entertainment to keep themselves occupied. Thus, this section will primarily aim to study the before and after consumption pattern of certain websites/apps/channels.

1.    Social Media Platforms

Fig 3.1 Source- Self-made

Use Case (Facebook)-

a.    Facebook monthly active users have increased from 2,498 Million to 2,603 Million (4.2% increase) from Q4, 2019 to Q1, 2020

b.    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

c.     On Mach, more than 3 Bn users, logged on to any of Facebook's applications

Fig 3.2 Source- Self-made

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

Source- www.statista.com

1.    OTT Platforms- Even before the pandemic, the OTT platforms were all the rage.

a.     Due to the lockdown, the OTT market jumped by 55% globally

b.    OTT is supposed to grow from $104.11 Bn in 2019 to $169.4 Bn in 2023 at a CAGR of 14%

c.     More than 75% Indians (of a target pool of 3000 surveyed) purchased an OTT subscription in the lockdown

       i.    73% started watching Hotstar and YouTube

    ii.    Amazon Prime had 67% growth while Netflix saw 65% growth in subscribers

       iii.    Facebook (80%), YouTube (84%), WhatsApp (92%) saw an increase in usage

Fig 3.3 Source- Self-made

Use Case (YouTube)-

a.     In India, YouTube has seen a surge of 20.5% in its subscriber base in the lockdown

b.    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

c.     70% viewership comes from the age group of 18-34 years of age

Fig 3.4 Source- Self-made

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.  

Fig 3.5 Source- Self-made

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. 

Source- www.statista.com

1.    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 3.6 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-

o  Carrom Pool

o  Ludo King

o  Uno

o  Call of Duty: WarZone

o  Pictionary 

Fig 3.7 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 enables it to understand the customer and collect 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 as below-

1)    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-

a)    Listen to customers and understand what drives customer decisions. Study 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

b)    Staying true and honest to the claims that the brand makes. Marketers need to protect the sanctity of customer relationships and also must stay true to what the organization can and can't deliver to the end consumer. Customer trust is an asset for the marketeer as well as the organization as a whole

2)    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-

a)    Developing creative, alternate marketing efforts since events that target large gathering of people within places like malls are not happening right now. Focus all attention towards Digital Marketing since it is on rise during the recent times

b)    Securing media is one key area of focus as everyone has the same opportunities and channels available to them, making everyone race to grab those opportunities at the same time

3)    Being ready for operational impacts

COVID-19 has perhaps impacted nothing more than supply chains all over the world. Factories & manufacturing facilities are closed all over, supply chains and logistics have been disrupted since months impacting the supply side of the equation. This led to wild price fluctuations of products

a)    It is essential to strip everything down to the bare necessities. Marketers must coordinate with other departments (especially Manufacturing and Production, Sales, Logistics, 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

b)    Digital Marketing is the most effective and efficient; hence 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 also incorporating payments into the website or application

c)    Leveraging technology for eliminating redundancies is crucial towards 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

4)    Few trends to consider heavily

Some trends are more useful than others and also effective. The following trends need to be followed in order to reap the maximum benefits-

a)    Market from home

Home is the current battleground, with almost all organizations making work from home an option for the employee to take. Keeping this in mind, marketers can quickly design and deploy campaigns from the comfort of their homes, thereby having an edge over others

b)    Engaging 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 into further marketing efforts by the company 

Conclusion

The article deep dived into the impact of COVID-19 and then into organizational structure and strategy, following which it delved into user insights and then into effective Marketing strategies which can are being followed in the wake of the global pandemic. Analyzing the changing marketing strategies give an insight into what works during times of stress and also how to adapt to these uncertainties so as to better guide the organization into the future.

References

·      https://www.mckinsey.com/

·      https://www.gartner.com/

·      https://www.statista.com/statistics/1106313/youtube-usage-increase-due-to-coronavirus-home-usa/

·      https://www.financialexpress.com/lifestyle/games-people-play-online-games-are-providing-much-more-than-just-entertainment-in-lockdown/1939582/

·      https://www.statista.com/statistics/346167/facebook-global-dau/

·      https://review42.com/how-much-time-do-people-spend-on-social-media/#:~:text=On%20average%2C%20users%20spend%2058,being%20viewed%20on%20Facebook%20daily

·      https://www2.deloitte.com/