Category: Contributor Blogs

Amid the massive disruption that the COVID-19 pandemic has caused, a new global media landscape is emerging—and it’s digital. The pandemic is far from over, and we will feel its effects for years to come, but the resilient media industry is bouncing back, with certain constituents pulling out ahead of others. 

Marketing and ad spend are good barometers for measuring the overall health of the industry, and Nielsen Ad Intel data shows just what a turn-around the industry has made over the past 12 months. We know that long-term revenue can take a 2% hit for every quarter a brand stops advertising, but marketers worldwide dramatically pulled back on their spending as the pandemic set in last year. That pullback, however, was short-lived, as fourth-quarter 2020 and first-quarter 2021 spending levels were above their seasonal, pre-pandemic levels.

Given the effects of the pandemic on various market sectors, the return of ad spending has not been universal. Several industries that pulled back significantly last year, however, have returned to advertising with double-digit increases, including fast-moving consumer goods, durables, financial services and distribution companies.

As brands, advertisers and agencies think about the future, which should include ample brand building efforts for revitalized consumers, the rebounding landscape provides clear guidance on channels that are attracting the most engagement from consumers. With connectivity and online engagement well above norms during much of 2020, we expect that many newer behaviors will stay in place even as people begin to resume some (or all) of their pre-pandemic activities.

It comes without surprise that amid the high levels of online engagement throughout the pandemic, digital ad spend remained positive throughout 2020—even during the massive pullback in the second quarter. That level of digital advertising had a notable impact with consumers, as digital impressions across 27 countries outside the U.S. grew significantly, according to data from Nielsen Digital Ad Ratings. Across the largest digital players, Facebook, Google, YouTube and Amazon, digital impressions increased by 36% over a two-year period. Comparatively, digital impressions across the rest of the internet grew by 26% over the same period.

As has been the case in other markets, streaming has been a significant winner throughout the pandemic, as consumers gravitated to the growing wealth of content options that are available online. And even as parts of the world resume pre-pandemic activities away from home, engagement with streaming content remains elevated, and now accounts for 37% of digital impressions across 27 different markets in Latin America, EMEA (Europe, Middle East and Africa) and Asia Pacific. Comparatively, digital impressions across streaming content (including YouTube and podcasts) in the U.S. account for a much larger portion of digital platforms than they do in other markets.

Importantly, as big of an impact as streaming is having on the media landscape, advertisers and agencies should be focused on an array of channels across the digital ecosphere. Streaming has gained share of impressions in Latin America, EEMA and Asia Pacific, but not to the degree that it has in the U.S.

For additional insights, watch the on-demand recording of our recent State of Global Media event.

E-commerce and omnichannel shopping were not born out of the pandemic, but the arrival of COVID-19 accelerated these trends in ways that would have likely taken decades otherwise. The pandemic also didn’t conceive convenience, or inspire customers to demand it, but it did shine a light on how important it is in everyday life—particularly in a global health crisis. Now, as consumers resume many of their pre-pandemic activities, retailers need to remain focused on convenience—even as consumers leave the comfort of their homes.

Consumers’ everyday lives were busy well before the arrival of COVID-19. Brands and retailers were actively thinking about digital channels, e-commerce and true omnichannel shopping experiences. Now, after more than 16 months of consumer dependence on connectivity and omnichannel experiences, the baseline for convenience is higher than ever—and consumer expectations from retailers will be, too.  

That does not mean that all commerce will remain online. It means that retailers need to meet consumers where they are—and offer experiences that provide unilateral convenience. That will require a true blending of on- and offline tactics rather than a reliance on one over the other.

Click-and-collect services, for example, have become mainstream across the retail landscape. While these services were a lifeline for retailers when in-store shopping wasn’t an option, their widespread availability represents a huge step forward in terms of convenience, as they blend the online shopping experience with speed and easy pick-ups for local consumers. And that will continue, even as in-store shopping returns. Staying nimble, flexible and focused on consumers will be critical for retailers now that new standards of convenience exist.

Clearly, click-and-collect isn’t a replacement. It’s a complement. And when we look at in-store shopping trends, Nielsen Scarborough data shows that aggregate in-store shopping behavior (albeit at fewer stores, as many have closed) among U.S. households changed very little between the second half of 2019 and the second half of 2020. Aggregate in-store grocery shopping trends changed even less—even as online grocery shopping activity ticked upward. And now, with COVID restrictions lifting, consumers are increasingly engaging with traditional retail establishments.

The importance of convenience across channels will only increase going forward, particularly as consumers grow increasingly comfortable with resuming pre-pandemic activities. According to an ongoing consumer lifestyle survey about the pandemic conducted by Nielsen Audio, sentiment among U.S. consumers that life is starting to become more normal was at its highest level in June 2021, with 90% of respondents saying they felt ready to resume pre-pandemic activities, including in-store shopping, spending time with others and eating out.

For many retailers, now is the time to re-engage with consumers. While essential retailers that have had frequent, ongoing engagements with consumers over the past year are likely top-of-mind among shoppers, many retailers may need to re-introduce themselves to the broader public—especially if they pulled back on their marketing and ad spend  last year.

So as consumer optimism and spending returns, retailers should be focused on marketing efforts that build their brands and grow awareness. This is particularly important for retailers thinking about their holiday planning, including click and collect options. That’s because brand awareness efforts can’t wait until September or October. They should be part of a holistic approach to marketing. 

Importantly, it’s time for retailers to pivot. To survive store closures last year, many retailers shifted to conversion-oriented strategies to keep their bottom lines afloat. Today, as vaccine availability rises and consumers reclaim aspects of their pre-pandemic lives, retailers need upper-funnel brand awareness campaigns to bring their brands  back into focus for consumers. We know that long-term growth requires a balance of short- and long-term marketing strategies, but retailers that pulled back on marketing last year likely have some ground to regain as they seek to re-engage with consumers.

3 Things Retailers can do ahead of key holiday events:

• Know who your target shoppers are post pandemic and ensure your ads are actually reaching them
• Personalize and test messaging to key shopper groups
• Set up measurement on how the campaigns resonated