Month: June 2020

Booking.com never paused spending entirely, its CMO Arjan Dijk told me during an interview at The Next Web’s Re:Brand “couch conference” last week.

Dijk said the main role during the early throes of the crisis was “not add to the noise” at a time when people couldn’t place a booking or weren’t in the mood to and decreased marketing spend significantly. But while email marketing was switched off for a time and speed on offline media was canceled or postponed — Booking.com didn’t go fully dark. The company has instead focused efforts on driving people to downloading its mobile app for when travel does begin returning, having noticed users were making wishlists of properties they’d like to visit in the future. (Orlando, Florida was the destination most wish-listed by Booking.com’s U.S. app users between March and April this year, in case you were curious.)

“You can almost see our marketing budget as a big experimentation budget — we go where the water goes,” Dijk said.

Booking.com’s parent company, which also owns brands including Kayak, Priceline and OpenTable —  spent 29.3% of its revenue — $4.4 billion — on performance marketing last year, which primarily includes search ads. The company reduced its total marketing expenses by 28.6% to $851 million in the first quarter of this year and marketing outlay “will remain significantly below 2019 levels for the remainder of 2020,” the company said in its latest earnings report.

“There is still a willingness for us to experiment, as long as, for example, my finance colleagues sign off on it … I need to be best friends with my finance colleagues to be able to do that,” said Dijk.

During this crisis period, perhaps more than any other, you’d imagine most CFOs would be averse to experimentation. But when it comes to media and marketing, Ron Amram, global media lead at Heineken, takes the view that during this time of upheaval, now is an opportune juncture for some risk taking — though only for those companies that are in the fortunate position to be able to maintain some level of spend.

“Don’t just rethink. Start at the beginning,” said Amram. “You have full permission to hit the reset button.”

His thinking is that the pandemic has already completely ripped the annual marketing plan to shreds — which applies whether your revenue has taken a dive, or if sales are booming during this unprecedented period. Both consumer behavior and supply chain management have radically altered — and some of those trends might linger. Being smarter during this period isn’t just about marketers being more frugal, according to Amran, but about positioning marketing to have a disproportionate impact on the company’s success. In his view, the time is ripe for radical thinking and experimentation — going all in on broad endorsement, integrating new video channels on YouTube or using a new form of measurement — because the usual safety net has already fallen away this year. Plus, media owners are being more flexible right now than in normal periods and campaigns can be torn down quickly if things aren’t working, rather than having to ride it out for six months.

“The plan is now compromised. Take a risk. The truth is you’ve already lost the wind in your sails or already had to take down the sails. Maybe you should switch your course completely,” Amran said. “It’s the right time to think about these things in a way you never probably had to do in the past because you were on course — or if you were off a bit, you could fight your way back. Now you can’t fight your way back.” 

For all the fighting talk, however, Amram was keen to emphasize that clear guard rails still need to be put in place. Marketers need to be more keenly focused on short-term measurement than before. Now probably isn’t the time to roll out an expensive new marketing mix modeling study, he said.

To be sure, for many marketers, change and experimentation has been forced, rather than driven by choice through this crisis — the accelerated shift to ecommerce the most obvious example. Meanwhile, many in-house and agency teams have been depleted. Marketers looking to use this period for experimentation will need to be mindful they could be putting weary staff, who are already doing a lot more with a lot less, under further pressure.

“Any time of disruption can be a great catalyst to test new things,” said Jerry Daykin, EMEA media director at GSK. “For those still advertising there are some big opportunities, but also some challenges about how you fairly measure the results, and a big watch out about creating new work for your already stretched teams.”

Pride Month “is something that we normally invest in,” said one media strategist, who asked to remain anonymous. This year, however, her client is “not focusing on it at all” with the leading factor being budget cuts. Overall, the media strategist said she is estimating a 15% decrease year over year in her client’s full year marketing budget. 

“Spend is down but what we are spending on is prioritized towards coronavirus,” she said. Her client has chosen to only do timely virtual events and other advertising related to one of its products catered towards healthcare workers. 

Entertainment Weekly initially saw interest from potential sponsors when it was planning live events for Pride, but then the pandemic hit and advertisers shut their wallets before signing any deals.

Since then, the publisher has only signed Procter & Gamble for a significant partnership within EW’s Pride-related content. The campaign now includes a June Pride magazine Issue, digital covers and a podcast called “Untold Stories.” Editor-in-chief JD Heyman would not disclose the size of the deals but said that “June was a great business success story for EW.”

In 2019, Conde Nast’s LGBT-focused brand, Them, had six sponsors for its Pride-related offerings, including HBO and Aeropostale, according to Paul Robertson, the head of brand marketing at the Conde Nast Culture Division. Those offerings were largely in-person events, including panels throughout the month, culminating in a party at the end of New York City Pride Week. 

This year, Them is doing Pride-themed content throughout the month, including its annual Now List feature, and is hosting a one-hour concert/performance livestream on YouTube, featuring a variety of musical artists and activists on June 22. So far, it has one sponsor, skincare brand Bliss doing a social media campaign.

The biggest difference in selling Pride year to year, Robertson said, is that brand partners are looking to buy evergreen campaign opportunities, versus seasonal Pride ones. Three sponsors are launching campaigns that are not tied to Pride at all in June. Two years ago, nearly half of Them’s business took place in June and last year, June had represented a third of its overall business. So far in 2020, March was one of the site’s strongest months ever.

The other reason that the first media strategist said her client decided against spending on Pride Month this year was because the appeal for Pride campaigns is that they take place in-person. “The excitement and enthusiasm [of Pride Month] comes from the camaraderie of being in one space,” she said. Virtually, “that is less tangible for brands to unite behind.” 

With virtual events, the most that a brand can essentially do on platforms like Zoom or Twitch is having their logos at the bottom of the screen or having a product placement, said Montiel.

“You can make a hashtag or do a viral campaign, but that doesn’t have the same impact of walking down a parade route,” Montiel said. 

The audiences at Pride events tend to be more diverse, said Michael Montiel, an associate of connections planning at Havas Media Group. They not only include people in the LGBT community, but allies of the community as well, which he said enabled brands to “justify balling out on a Pride parade or a Pride week event.” 

But during the pandemic, “budgets are shifting left and right and the money that might have been set aside for a Pride execution has already been pulled away and it was pulled away in March.” 

Benjamin Cohen, CEO of PinkNews in the UK, said that his company has still received some interest in the launch of its virtual Pride event. (The company moved up its virtual Pride launch from 2021 to June this year.) 

He expects ad revenue earned from Pride will be slightly up this year — close to 10% higher than last year — because despite the number of brand partners being “massively down,” margins on the virtual Pride event are significantly higher than past in-person events. Pride campaigns have been selling in the range of $25,000 to $125,000 this year, he said. 

The types of brands advertising with PinkNews is different from last year, many of which are DTC or consumer businesses that are using the Pride-related campaigns to drive transactions.

This is because the majority of advertisers who previously spent on Pride campaigns have needed to indefinitely put their spending on hold, according to Matt Skallerud, president of LGBT advertising agency Pink Media. This is leaving some room for brands that are new to Pride to advertise to an LGBTQ audience in a less-cluttered space.

“I think if anything, [brands] will be aligning with a gay influencer. That will be the way they can align with Pride without fully doing the parade and get that pat on the back,” Montiel said.