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Twitter's announcement last night serves as an early warning that digital marketing is not immune to the impact of the coronavirus crisis. 

Despite a clear uptick in social media growth (Twitter reported a 23% growth in year-on-year "monetisable daily users"), the platform is being hit by reduced adspend as brands pause or pull marketing activity generally.

Nevertheless, performance marketing could also come to the fore now as people live more of their lives online and consume digital channels for which marketing activity can be measured and optimised. 

The problem is that so much of performance activity involves driving online users to offline behaviour, such as visiting shops or attending events, which is now impossible for an increasing number of sectors of the economy. It's a rapidly evolving situation, too, as government advice changes by the day: last night Boris Johnson announced strict stay-at-home guidelines in the UK and that non-essential shops should close. 

With the crisis worsening dramatically in the UK over the past two weeks, performance marketers have reported a high volume of volatility, which is expected to continue. While it’s too early to attach many meaningful numbers to the trends that performance specialists are seeing, some patterns are emerging.

Volatility is the new normal

Paul Bland, managing partner, planning at iProspect, reports that digital spend is "both up and down" depending on the category. "There’s no single rule, and the great thing about digital performance is the ability for brands to react at speed," Bland said. "We are set to see unprecedented volatility in [consumer] behaviour over the coming weeks as consumers react, adapt and create the new normal."

While digital performance allows brand marketers the opportunity to work at speed and adapt to quickly moving situations, Bland warned that it is also critical for advertisers to work closely with their search teams and focus on supporting customers at a difficult and unprecedented time. 

Some of the online trends that agencies are seeing could have been predicted. Performance agency Incubeta is seeing home office suppliers' online campaigns "perform amazingly" as office-based workers have switched to working from home, while fitness equipment is also doing well now that people can no longer go to the gym. 

Incubeta’s chief executive Luke Judge says: "We are seeing a mixed bag from brands and how they are adjusting their digital campaigns at this time of crisis. It really depends on which sector they trade in –  some verticals are seeing the best results they’ve ever had, while other brands are completely pulling back."

He adds: "We’ve also seen a spike in crafting, home improvement and alcohol as consumers look to keep themselves amused amid a lockdown.  

"Unsurprisingly, travel brands are reducing digital spend as more travel restrictions across the globe are implemented. And as theatres and cinemas are forced to close, they too are pulling back on spend."

Bland agrees that changes in performance spend are varying significantly across categories. "We see that consumer technology remains in strong demand online, while other categories, such as automotive, are seeing a decline in search intent. But there is nuance in this behaviour within each category," he said.

M&C Saatchi Performance, meanwhile, reports a significant drop in activity for the gambling sector, which was previously "massive" but has effectively lost its product now that sporting events have been suspended. 

Inventory is competitive but consumers are responsive

The agency’s head of media, Andrew Platt, reports a significant drop in cost per clicks and cost per mille on online platforms this month and expects this downward trend on online inventory to continue. 

"In the past three weeks, Italy and Spain have seen a drop in CPM of around 20%. We expect this to continue, although we’re not sure to what extent as you would also expect the self-attributed networks [Google and Facebook] to have some protection in place," Platt says.

At the same time, consumers appear to be more responsive to digital marketing as more of their lives are lived online. Location data tech company Blis reports that click-through rates almost doubled in the US as of the end of last week (over a period of 10 days), while in the UK there was a 60% increase in CTR in a six-day period.   

Platt also warns that brands have to be considerate if deciding to increase their performance-based activity. "While it is a short-term thing in terms of the market [prices] coming down, you shouldn’t be seen to take advantage of an awful situation. That would dictate of a lot of brands’ approach to push notifications and reengagement campaigns, which would be seen as being in poor taste by consumers if done badly."

Meanwhile, Judge advises that advertisers should focus on developing their feeds to "include margin and stock price benchmarking". This is, he says, to: "Make sure spend is as efficient as possible in these times; re-focus people who have spare time on areas that need attention, whether it be creating content for SEO, building creative assets for the bounce-back campaigns or manning the social channels to ensure maximum customer interaction and long-term loyalty."

Brand is still important

But not everyone agrees that brands should be withdrawing from brand-building marketing. Orlando Wood, System 1’s chief innovation officer, is a proponent of defining marketing strategy in terms of left- and right-brain thinking. He warns that many brands are opting for logical, measurable solutions at just the wrong time. 

Wood explains: "My feeling, in this period of isolation, is that we’re going to need to show work that shows people connecting and having a sense of place. The right brain will become more important; the right brain is all about vigilance and broad attention. 

"Advertising that shows people having connections and relationships – this right-brain work is going to be the sort of work that becomes more effective and connects better with people. I fear companies will do the exactly the opposite and think in logical terms, and withdraw work that shows people in groups and talking to each other."

That is why, Wood reports anecdotally, we are seeing tech and finance brands in particular deliver messaging around "protection" right now, as they anticipate consumers’ fears rather than attempt to appeal to a yearning for optimism. 

Nevertheless, Judge notes that reassurance has become an important messaging strategy, particularly for brands that have used performance to drive people to physical stores, such as a supermarket or homeware retailer. 

"Rather than driving traffic to a physical store, the communication is now on how fast delivery will be, or how well delivery is going," Judge adds.

Moreover, Judge has seen a lot of brands "turn off branding altogether" because they want to focus on profit-building activity. "They are then using free channels, such as organic social and email, to focus on brand and customer loyalty with updates on what’s happening," he says. "So they are still using the tools and people available to them but just in a slightly different way to keep customers up to date."

The luxury market is one to watch over the coming days, too, Judge says. "At first it was performing well, but now that has changed. However, luxury travel brands have a longer lead time and are still focusing on attracting new customers to book in 2021, while reassuring those with upcoming bookings that they are doing everything they can. After all, we could all do with a little more escapism right now. "