Charting the path back to performance as marketers emerge from COVID-19
CMOs planning campaigns for 2021 know they need to get back in the brand game. After a period of retrenchment—U.S. ad spending fell 13% this year, as marketers hit the brakes during the pandemic—advertising opportunity is back. Retail sales have shifted online, forecast by eMarketer to increase a whopping $108 billion in 2020 over last year’s $601 billion in e-commerce. U.S. consumers are making the most radical shift in shopping behavior in history, now spending one out of every $7 online.
If marketers don’t hit the gas soon, they may be left behind. Which leads to the big question—how much in this environment should marketers invest in brand advertising? And can they do so carefully, with better use of data?
This puzzle has a long legacy. For decades, brand advertising versus direct response (or “DR”) has been an almost religious war among marketers, with gurus picking sides. Some, like Byron Sharp in his brilliant “How Brands Grow,” argue the only way for a company to capture market share is to invest in long-term brand messaging that helps penetrate the millions of consumers now spending elsewhere. Others, like Don Peppers and Martha Rogers, Ph.D. in “The One to One Future,” suggest using data at the individual level is the winning formula.
Fortunately, thanks to recent advances in advertising data, both schools of thought are right—marketers can do branding and direct response concurrently. This new approach is called precision branding.