Month: August 2020

And, as companies continue to deal with the effects of the coronavirus crisis, the employees are growing concerned that diversity and inclusion is fading from focus within their companies.

“I don’t want to say that leadership has been quiet. [Diversity and inclusion have] been brought up and discussed, but it’s not been brought up recently over the last couple weeks,” said one employee at a large media company.

Media companies have said they plan to hire more Black people and people of color, but employees say hiring freezes have put those plans on hold in some companies. Media companies have said they plan to add more Black people and people of color to their executive ranks, but employees in some companies say promotions have been scarce so far. 

“We still have no Black vps. We still have no Black [ad] sellers. It’s only been two months, but it kind of sucks because right now we’re in a recession. No one’s hiring, so they can point to not hiring at the moment so they can’t funnel in new people. But, it’s like what are you doing to elevate [existing employees]?” said a second employee at a large media company.

The employees feel their companies’ leadership teams have not been sufficiently transparent and communicative in answering that question. Many companies have held multiple virtual all-hands meetings since the beginning of June for employees to raise their issues and concerns with companies’ leadership teams. And as employees at companies such as Bleacher Report have demonstrated, the employees are being vocal and calling for changes to be made. But the companies’ leadership teams have not been specific enough in their responses nor have they been constant enough in their communication, according to the employees.

“I would like to hear that this is something they’re actively working on every day, if possible, or every week and that they’re taking very seriously. And that they’re putting together tight deadlines on things,” said the first employee whose company has yet to share with all employees a timeline or action plan regarding its diversity and inclusion efforts.

Media companies are taking some steps to address the lack of diversity and inclusion in their organizations. They have formed diversity committees. They have issued diversity reports. They have hired outside consultancies like Women of Color Unite to audit the level of diversity and inclusion in their workforces as well as their content and to advise them on the work they need to do.

And they have appointed task forces with advisers dedicated to specific departments and charged them with overseeing hiring practices. But that’s effectively the least that companies can be doing. “It’s baby steps,” said the first employee.

“There have been no tangible results or anything to measure against yet,” said the second employee.

The employees’ frustrations are not only aimed at the leaders atop their companies but also those overseeing individual departments. Departments, such as sales, that had been vocal in June about improving diversity and inclusion in their staffs have since quieted down, said a third employee at a large media company. From this company’s sales chief to its individual team leads, there has been a lack of “meaningful, real, concrete strategy” communicated to members of the sales department, said this employee.

It’s possible, the third employee speculated, that the lack of a strategy being communicated could be the result of their company’s top leaders formulating an overall strategy that has yet to trickle down. But that then puts the onus on employees to trust that companies — that have, for years, allowed themselves to fall short on diversity and inclusion — are now, or will soon be, devising concrete action plans.

“People of color that are actively working in the organization need something more immediate. It feels very much like lip service otherwise,” said the first employee.

In lieu of company leadership teams being more proactive and transparent about their diversity and inclusion efforts, employees are taking it upon themselves to keep the topic front and center inside their companies. 

They are regularly discussing issues related to diversity and inclusion on Slack and in internal newsletters. They are compiling lists of Black writers, designers and programmers that companies can hire, uploading the lists to their companies’ Google Drive folders and then pinning links to the lists on Slack. They are even directing their efforts outside of their own companies.

The employee resource groups inside one media company have organized social hours for employees to call state and local representatives and urge them to arrest and charge the police officers who killed Breonna Taylor in Louisville, Ky., in March.

“Folks in the company are making sure we’re being proactive and keeping our foot down. Whether leadership is echoing that and keeping that energy going is another thing,” said a fourth employee at a large media company.

It’s not just back to school: The influx National Football League season has marketers less likely to commit to Super Bowl spending, according to agency execs who say they would normally be briefed on potential campaigns by now. The ad inventory would also likely be sold out, or close to, by now. “Fox was probably 85% sold in the Super Bowl at this time last year,” said a media agency executive. “[This year] it’s a tough sell because there’s so much ambiguity around it…. I think it’s going to be a year where the Super Bowl is not filled until January.”

Traditional holiday advertising briefs also haven’t come with the normal frequency, per agency execs, who say that they would start working on those briefs in the coming weeks. 

Overall, there’s a sense of “wait and see” rather than long term planning among marketers at the moment. Of course, this isn’t surprising. An unusually disruptive year, 2020 has seen every facet of the way we live, and think for that matter, upended. And without a return to normalcy of some kind marketers can’t use the typical tactics to urge people to buy their products.

While the challenges facing the industry have been, and will continue to be, difficult and painful for some agencies, this moment of bucking the traditional advertising cycles could be a necessary shake up for the industry. 

“It’s a good thing in that folks learn to adapt and they also get a breather from the set schedule of ads,” said a copywriter of the shift away from the traditional fall marketing cadence. “Brands are struggling between Covid ads and non-Covid ads right now. We can’t predict what will happen with the Super Bowl. Between the BLM protests and Covid… we really don’t know what’s up.” 

That said, some say that some briefs are coming in as usual and that the norms of fall marketing aren’t entirely out the window. For example, Mars Wrigley announced last week that it would be advertising during the 2021 Super Bowl.

Whatever the case may be, the tremors the ad world is feeling could lead to necessary accelerations for this new reality. For example, while it takes time to produce great work, ads created six months ahead of when they air might not be relevant anymore. How could an ad created in March speak to, or be culturally in tune with, the current moment?

Why then, create something so far out? Why not create something now?

Aside from DTC brands, there has been a slower adaptation of e-commerce from retailers and shoppers alike. That is until the pandemic hit, forcing the vast majority of stores to close and leaving online shopping as one of the few retail options.

With that came a scramble from retailers trying to figure out how to keep customers spending with them when their e-commerce operations had been second fiddle for so long. Meanwhile, platform giants in the space, like Shopify, grew even more, seeing an opportunity to step in as the technological partners that in-person retailers never had to think much about.

In the latest episode of The New Normal, editor-in-chief Cale Weissman of Digiday’s site Modern Retail and Digiday Media president and editor-in-chief Brian Morrissey discuss the dramatic changes that have roiled the retail industry as a result of the pandemic and who the winners and losers are in the upheaval. 

‘The hottest company is Shopify’

As Shopify was on the rise, it clamped onto the DTC and digitally native brands that were also building their businesses and served as the e-commerce platform that many of them used, Weismann said. This is because Shopify acted as a cheap, turnkey solution that brands could add their own personalizations to and share in an open market, making it a great solution for marketers new to online sales. 

“Now we get to March and all of these other companies are realizing, ‘I need to have a marketplace on my website,’” said Weismann, who added Shopify has been garnering more business from retailers who either didn’t have an e-commerce operation or were not prioritizing that business line. 

Next for Shopify, Weismann said, is figuring out how to better serve brands that have grown to be multi-million dollar businesses on the platform. As they’ve grown, these brands are now looking for better, white label tools that give them more control over the sales process and help save money during each transaction. Shopify created its Shopify+ platform for this purpose, which Weismann said remains a work in progress.

Competing for the online marketshare

Coming as a surprise to no one, with in-person stores closed, online shopping has been booming and Amazon and Walmart are two online marketplaces that are reaping the rewards.

Weismann said that despite Amazon running into some supply chain issues early on, the company had a very healthy second quarter, growing sales by 40% year over year. But with that success, come opportunistic competitors — and Walmart pounced.

Walmart has spent a lot of time over the past few years building out infrastructure for different kinds of online shopping, pioneering the By Online, Pick-Up In Store (BOPIS) model. But during the pandemic, the company found particular success in its online grocery business.

“E-commerce is expensive,” said Weismann, “and if your bread and butter is cheap things, it’s really expensive to facilitate that.” That’s why online grocery businesses are going to be unprofitable for a really long time. Walmart, however, is leagues ahead of everybody else because they’ve put in the investment to make the margins on groceries better, he said. 

DTC is on the rise, at least for a little while

As the recession took hold and the advertising market pulled back spending, online inventory became cheap, making it really easy and inexpensive for a slew of new DTC brands to get in front of consumers at scale.

But this ad space bonanza is going to subside at some point, Weismann said, and when that happens, there will be a reckoning.

With little money out in the world for investments, DTC brands are “focused on their economics achieving profitability and there is no way that all of them will [continue to] exist” once traditional advertisers return and the ad prices start creeping back up again, he said.

An identity crisis in retail

Weismann also said he expects that retail will return and people will shop in-store again, but for brands that have a “boring store experience,” they will need to rethink that decision.

Brand and destination identity are no longer going to get people through the door as people worry about health and safety. Therefore, customers are not going to think about that brand in the same way anymore.

For the DTC brands who built stores, however, their retail locations often serve more in a marketing capacity where customers could interact with the brand in-person, he said, adding he expects this is the direction that retail will have to go in in general, versus a warehouse with racks after racks of items.

“A lot of the thinking right now is about, ‘How do we redesign [stores] so it’s a place to show off our brand versus a place to sell things and make that profit,” Weismann said. “A lot of places with hundreds or thousands of locations will have to cut down.”

Acceleration of invisible tech

“There are all of these hyped things like AR and VR that were supposed to be big,” but the reality is that “there are a lot of invisible technologies that are seeing a huge acceleration,” said Weismann.

Robotics in fulfillment centers is one prime examples of this, according to Weismann, and they are making a large impact on e-commerce margins.

The reason that e-commerce is so expensive, he said, is because of the warehouse costs and the costs of human labor, which also has a lot of inefficiencies. So the automation of these processes is where the mad dash is regarding the development of technology. 

“It’s the invisible ones that are more interesting,” said Weismann