Consumers are spending more time than ever online – but are they seeing your ads?

Right now we’re seeing record levels of online activity… and yet some brands are still cutting digital ad budgets. Find out why you need to stay front of mind with consumers.

It’s no surprise that, with many people confined to their homes and a fast-changing global news story that affects us all, Covid-19 has seen a sharp increase in smartphone use. According to Neilsen, our average daily use has shot up from 2.5 hours to almost 4 hours in mobile web and app.

Predictably, news sites are seeing 60% more traffic, as are online media sites. We’re increasing the amount of video content we consume, too. And, equally unsurprisingly e-commerce has also seen a significant spike, growing by 25% from March 13-15, compared to a baseline period of March 1-11.

Research shows that consumers are still searching for potential purchases online. Around 1 in 5 millennials, for example, are currently searching for vacations, possibly preparing plans for after the outbreak. And 30% of them said they are shopping more frequently online.

And yet, despite this extra traffic reports show that many advertisers are cutting their digital spend. Find out why history shows this could be an expensive mistake – and why it’s an opportunity for more forward-thinking brands.

Are you a Pizza Hut? Or a McDonald’s?

When it comes to surviving tough economic times, there are plenty of lessons we can draw on to identify the best strategy. And one particularly stark lesson is that of the very different economic fates of Pizza Hut and McDonald’s in the recession of 1989-91.

As we explain here, it’s well documented that the brands who maintain a marketing presence in tough economic times reap the rewards. And not just during them, but after too.

Proving this point, in the recession of 1989-91 Pizza Hut increased their advertising spend, whereas McDonald’s cut back. As a result, Pizza Hut saw their sales increase by 61%, while McDonald’s sales dropped by 28%. It was an expensive lesson for McDonald’s, and one well worth heeding today.

And yet, right now, as we enter new tough economic times, we’re still seeing advertisers follow in McDonald’s costly footsteps. A quarter of ad brands have already paused all their ad spend in Q1 and Q2. And those who are planning to spend in Q2 are investing 33% less in digital media.

This approach does, however, leave an opportunity for their competitors who follow Pizza Hut’s lead.

If you maintain your digital ad spend now, not only will your ads be competing with less noise, giving you an easier route to increased brand memory and market share, but history also teaches us that consumers look kindly on brands who are a reassuring presence in tough times.

In research, 86% of buyers said they “feel better about their commitment to products and services” and these companies are top of mind when the time comes to make purchasing decisions.

Why brands need to ‘be more Amazon’ right now

Pizza Hut isn’t the only brand to thrive in a recession. Amazon launched an online book store in 1994. By the start of 2019, it had a market capitalisation of $755.7 billion, and a diverse business portfolio.

It’s all not been plan sailing, though. Amazon has weathered some tough economic times in those 25 years. From December 2007 to June 2009, the official period of the Great Recession, its stock declined just 8%. But it still outperformed the market, which dropped 36% in the S&P 500, and eclipsed the performance of both Google and Microsoft. (Amazon’s sales actually grew by 28% in 2009.)

The secret to Amazon’s enduring success lies in its ability to evolve. While other companies bunkered down and put the brakes on development and spend, Amazon continued to invest, particularly in technology (historically, downturns reward the adoption of new technologies). It’s Christmas marketing of the Kindle launch, in particular, gave the company a valuable sales boost.

More customers than ever are online right now

Right now we’re living in uncertain times, but there is one certainty we can cling to: more customers than ever are online now, and many are buying. They’re also happy and reassured to see familiar brand names in a changing world, as long as your messaging is appropriate.

So whatever your situation, you need to ensure your ads are being seen. If sales are healthy, your ads will give them a further boost.

And if sales are sluggish or non-existent, your ads will help give you a larger share of market, and bring people into your lifecycle, ready to buy when the time is right. Either way you’ll gain invaluable brand awareness.

Need help devising an innovative, appropriate display advertising strategy for Covid-19? Get in touch and we’ll be happy to help.