News as it is -

Best Media Info

Partner Content

Brands are moving fast to e-commerce but creativity and branding will remain key, says David Tiltman of WARC at Lions Live

Talking about effectiveness in the age of e-commerce, the VP, Content, said it is essential to make a balance between spends and e-commerce effectiveness models

On Day Two of Lions Live, David Tiltman, VP, Content at WARC, discussed about effectiveness in the age of e-commerce.

Call for entries open for BuzzInContent Awards 2020 ENTER NOW

As Covid-19 forces brands across categories to switch faster to e-commerce, Tiltman started the session by explaining what the shift means for marketers and gave some actionable ideas on how to respond.

Leading marketers from P&G, Hershey’s, GSK, etc. also pitch in on the topic.

Do marketers need to change the game if they want to be effective?

Jill Baskin, CMO of The Hershey's Company, said they saw a shift in consumer behaviour immediately after the Covid-19 spread. Large format products, as in packs of 12, were more in demand than single packs and it was majorly coming from e-commerce platforms (Amazon, Walmart), said Baskin.

She said generally large format goods get purchased around Halloween and other occasions. But the company sold a lot more on e-commerce in the pandemic.

From the packaged foods point of view, the change has been swift and profound in the last few months. In the previous 10 years, US e-commerce penetration rose by 10 percentage points and over the previous three months, it increased by 11%, Tiltman said.

The rapid growth of e-commerce

Tiltman said the rapid growth of e-commerce is both an opportunity and a threat. "It's time when consumers have to adapt to some consumer habits; many are also trying something new. It's a time when new brand habits will be formed."

According to Kantar, 56% of e-commerce is driven by kids. They have tried new products in the lockdown and will continue to do so.

The shift is increasing power of big platforms

In the west Amazon can combine with retailers’ offline and online. In China players like Alibaba, Wechat has more social platforms in the west with payment facilities and marketers will have growing range of platforms to sell through.

Big brands are looking to build direct relationships with consumers.

Last year, Nike pulled its sales through Amazon as it wanted to take direct control. Now the critical game is data; whoever holds the information holds the relationship.

As these trends accelerate how brands should change their strategies? How to make sure the disruption becomes an opportunity and not a trap?

"WARC picked out three key implications for brands".

The rise of e-commerce is the real back to basics moment.

When consumers buy online, they tend to buy slightly differently. One consumer tends to buy bigger pack sizes. For brands like Hershey's, that means a shift towards less profitable product formats. The challenge for them was to think of packs and sizes to drive profits as well as revenue.

The back to basics approach is even more apparent in D2C brands.

Cheryl Calverley, CEO, Eve Sleep, said, "Being in the D2C business, brands are asking the consumer to gamble on minimal stimulus when they change to buy online."

Calverley said brands have to build value on your customer experience to counteract the face-to-face interaction ability to touch product packaging that customers can't access.

The effectiveness of our consumer experience and the impact of it on brands is significant. If marketers invest in the brand and not on customer experience, the investment would be ineffective, said Calverley.

So, effective marketers in e-commerce need to think carefully about the total experience of their brand. Apart from product and the promotions, the focus should be on buying, shipping and unboxing process.

In FMCG, this brings marketing closer to the supply chain.

WARC's sister brand Flywheel has been working closely with leading brands. 

The supply chain is a top-line growth driver for e-commerce and not a cost-cutting exercise, said Patrick Miller, Co-Founder of Flywheel.

"It drives the second murmur of truth. We see vulnerabilities of brands that are impacted by damages; those damages are the second murmur of truth. The supply chain is an opportunity to make the second murmur of truth outstanding and take advantage of the uniqueness of these platforms," said Miller.

One of the most important things that marketers can do is drive demand. But if the product is not present at the right spot at the right time to ship to the consumer, then we are a failure, said Tiffany Lilze, Senior E-commerce Supply Director, P&G North America.

"When a company is trying to drive more demand they need to make sure that they know their supply chain, from where the demand is driven to and how they deliver to the consumer," Lilze said.

Lilze said for the last three to five years, P&G had been ensuring that the marketing and supply chains are hands in hand and they follow the same process.

Miller said as brands create awareness for products, they need to go a step further and not just drive the eyeballs but understand what the rest of experience is going to be for that customer.

Identifying target audiences and how marketers get payback from spends is important, the panellists said. "The ability for product businesses to know which consumer is building its products and that consumer will buy again means the brand has built an investment model in a very different lens. They can over-invest on customer acquisition in certain areas by having full knowledge of two to three horizons. It will pay back to marketer not because the consumers repeat the order or because of an organic suite sales channels but because the investment got right,” Calverley said.

She said a lot of new D2C businesses do 'refer schemes', and inherently that is driving higher lifetime value for new customer acquisition. It's almost like a pyramid selling scheme for the brand. "I am not sure if the product businesses are appreciated in the same way service business could," said Calverley.

There is a significant change in how these products brands are thinking about e-commerce effectiveness.

The shift to e-commerce is changing media messaging. There's a particular shift in performance marketing, Tiltman said.

New forms of performance marketing

He said there is already a rise towards shoppable formats and the messaging will be expected to sell. 

The other change in performance marketing is that the big e-commerce platforms are setting themselves up as media owners. "The shift to e-commerce media is the biggest trend in advertising investment right now. It's already changing the way major brands think," Tiltman said.

Tiltman said Amazon's ad sales are growing 40% year on year, and the company is opening its search marketing products.

On the other hand, brands like Hershey's are changing their marketing budget to get rid of the old distinctions between marketing spends to shopper and trade spends.

Before Covid-19, Baskin said, they had an e-commerce marketing team that was separate from the rest of the marketing department. As e-commerce just hyper-expanded, they realised that they needed to bring both sides together, Baskin said.

The brand put the entire budget together and strategised on the placement for the best results. "It's been an interesting journey to bring the entire budget together and plan them," Baskin said.

But where might e-commerce media go next? China is several years ahead of the western markets in terms of development of e-commerce.

The rise of sizeable live streaming within e-commerce sites in China encourages the consumer to stay in the platform and purchase direct.

The e-commerce streaming has a combination of influencer marketing, e-commerce and video content.

Live streaming in China is more interactive, said Elijah Whaley, CMO, at Parklu, an influencer marketing company in China.

Apart from comments or questions, the session had much more formal entertainment with live celebrities, interview, game shows, etc. 

"We came up with an idea of commerce and entertainment getting intertwined in a show, and that's what live streaming is in China today," said Whaley.

But it comes up with a cost; customer acquisition cost has been rising online in China. "Brands need to combine their selling approach with communities. They need to nurture these customers on China's social channels to drive repeat sales and lifetime values," said Tiltman.

Live streaming is a hot topic right now, but brands need to be aware of its downsides. It works because brands offer deep discounts via influencers, and the same brands use this to shift their unwanted stock. It comes with a risk to reputation and surprising power. And all this focus on performance marketing to get results can be a threat to brand image.

A recent survey from Ebiquity says that brands were pouring their budgets on e-commerce and reducing budgets on advertising. Many brands are only pushing e-commerce. There is a need to balance spends and how brands model e-commerce effectiveness. 

Jerry Daykin, EMEA Media Director at GSK, said, "One of the most powerful things about digital and e-commerce medium is that it does bring us real-time live statistics that help us guide to optimise our media. One of the most watch-out is those numbers we can track, which tells us the overall effectiveness of our media. Still, it might tell us the short-term conversion and doesn't necessarily tell us the bigger, better and longer-term job and doesn't necessarily help us understand the role of different channels; those channels that don't have clicks and metrics."

"So, well, it is important to look at those metrics and see your campaigns performing and assuming the right ones are those. I always encourage marketers to take back a step and look at what sometimes seen as traditional forms of measurement; brand-led studies, econometrics, and slightly slow-moving pieces. It will ultimately help in understanding all mix of your media," he said.

Daykin said that brands are catching up to be on digital, but they have to be cautious about not going too far and make the right balance.

To summarise

Look at total brand experience.

It is not just about shifting ad money; it's about fundamentally reassessing the experience a brand can offer and how that experiences influences sales.

For marketers, it might mean getting closer to supply chain, particularly in FMCG, it could become a vital partnership, and if he can prioritise his first-party data, this will allow product to increase lifetime value.

Collecting this data becomes a marketing objective in itself for marketers.

Rethink performance media to get closer to the sales

Rethink a transformation of performance marketing on the platforms, eliminating friction between advertising and purchase. In the basic level, that means shoppable ads and ad purchase entering into e-commerce sites.

  • Merge e-commerce and shopper spend with paid media.

Marketers might want to merge e-commerce and shopper investment with paid media budgets so they can view where their money is going and what is driving.

  • Watch the live streaming trend.

Live streaming is a great pointer to see where the western regions are heading. 

Resist the shift to short-termism

Don't rely on attributions that are allowing direct marketing investment. Strong brands remain to run success online, but marketers would still need to focus on time, energy and budgets to create a brand building.

"We may be moving very quickly to the age of e-commerce but for the most effective marketers, creativity and branding will remain a key," Tilt said.

Post a Comment