Month: November 2020

Like so many things that happened this year, the growing focus on post-sales roles, which include areas such as ad operations, optimization, and production, began before the pandemic struck. Historically, post-sales employees ate up a small percentage of a sales organization’s staffing budget, often in the range of 20%, said Matt Bartels, the media practice lead at the Alexander Group.

Yet starting last year, that balance began to change, as more publishers looked to build more in-depth relationships with advertisers. Today, pre- and post-sales roles often eat up at least half of a sales team’s hiring budget, Bartels said.

Publishers are making these decisions at a moment when many are trying to figure out how much to rebuild their sales teams after being forced to either halt hiring or slim down. Seventy percent of media company sales leaders said they’d either reduced their ranks or were thinking about doing so this year, according to a recent survey conducted by the Alexander Group.

“They have that opportunity to redefine,” Bartles said. “The challenge with that is, you do have a fixed budget.”

Throughout the year, brands‘ shorter planning cycles have had publishers scrambling to get campaigns done. Publishers said it was not uncommon that campaigns needed to get done in half, or even a third of the time used last year.

“It’s come down to the ability to execute quickly,” said Jason Wagenheim, the chief revenue officer of Bustle Digital Group. “There are no more lead times.”

Wagenheim and the rest of the Bustle Digital Group leadership have begun planning for 2021, and they’re endeavoring to add staffers to post-sale, client experience and ad ops teams. “You have to have that bench,” Wagenheim said.

Even legacy publishers with older branded content businesses and long-standing client relationshis have made these changes. Marla Newman, evp of digital sales at Meredith, said her team has expanded its post-sales teams as well, looking to add more growth.

“We continue to be fluid by evolving our sales and support team organization to effectively manage the business,” Newman wrote in an email. “The current structure has a strong focus on sales support (client services/activation) to enable best-in class execution of all client programs.”

Adding those people may help get a campaign done. But more people touching a campaign creates the potential for other challenges. For example, too many people participating in a campaign creates crowded lines of communication between client and publisher, Bartels said.  

And adding too many voices to the mix can make it hard to foster ongoing dialogue between publisher and client — which ideally should lead to an ongoing business relationship on which publishers are increasingly dependent.

If there was one mode of international competition that wasn’t to be disrupted much by the global coronavirus pandemic, it’s esports.

“One of the unique things about gaming is that our players don’t have to be in the same place,” Activision Blizzard Esports VP Jack Harari said on the Digiday Podcast.

Still, elite video game competition benefits from the same trappings that established league sports do, from pre-game pageantry to fan cams and a real sense that competitors are squaring off against one another even as they sit at their computers.

“It adds more energy, creates some really unique production opportunities,” Harari said. He joined Activison Blizzard — the creator of esport staples like Call of Duty, Overwatch and StarCraft — after five years with the NBA.

Like most media businesses, the company hopes to resume physical events next year, the company, Harari said, hopes to resume physical events next year, but has proved highly engaging in a media economy forced to be remote.

One clear differentiator between the company’s Overwatch League and a traditional sports league is that Activision Blizzard owns the game from top to bottom. Avid fans of the sci-fi shooting game can go from watching the world’s best to playing the exact same game themselves, albeit with different stakes.

In a week, the average fan watches four to five hours of professional esports while playing the company’s games for more than 20 hours, according to Harari.

Activision Blizzard is hoping to monetize that high level of engagement in a way other sports can’t. Last year, the category brought in more than $1 billion globally for the first time.

Here are highlights from the conversation, which have been lightly edited for clarity.

Gaming companies own the league. They also own the game.

“If there’s an EPL [English Premier League] fan out there or a Man U fan out there, when they’re playing soccer, football, outside of watching or being at an EPL match, they’re not interacting with the EPL, they’re just interacting with soccer. It all gets lumped in together. When our esport fan isn’t watching our esport, isn’t interacting with Overwatch League, and they’re still playing Overwatch, that’s still a touchpoint with us. So how we respect that and how we are critically thinking about how to address our fans across that entire lifecycle is really what’s most unique about how we develop these brand partnerships.”

The virtual advantage

“We have players playing on six to ten different servers globally this year for our season. That’s not ideal, but that was what kept our product going. One of the things we’re evaluating for next year is how to get that more centralized. There are moments in time where it adds significant value to our products to have at the very least our players in the same place and then maybe have fans, should we be able next year. It adds more energy, creates some really unique production opportunities. We’ve demonstrated and proven to ourselves and our partners and fans that we put out a great product under really difficult and unique circumstances.”

Esports was always going mainstream

“The notion that esports is popping because of the pandemic I think is a little misleading. To me, it feels like it’s a natural progression of where esports is going and has been going over the last five years or so. We as a company just had an earnings call last week where across Activision, Blizzard and King [mobile games], our third quarter monthly active users combined were close to 400 million. This isn’t a result of the pandemic, it’s a result of the natural progression.”

For many publishers, having a CTV app or a 24/7 streaming channel on a CTV-centric platform like Pluto TV is a way to more directly expand their advertising businesses to the biggest screen in people’s homes. But which pathway to take can be a bit of a conundrum, as publishers weigh how they can best compete with TV networks and major streaming services angling for CTV audiences attention. 

A standalone CTV app provides a direct audience — provided a publisher is able to convince viewers to tune into its app directly. Meanwhile, a 24/7 streaming channel offers a built-in audience — but that audience ultimately belongs to the platform. In other words, there are trade-offs with either route, which is why some publishers continue to explore both options, though a preferred path does seem to be emerging.

Vox Media has initially opted to stand up its own CTV apps. After debuting a Roku app for Eater in November 2019, in late September 2020 the company’s food publication rolled out standalone apps on Apple’s Apple TV, Amazon’s Fire TV and Google’s Android TV CTV platforms. And next year the company plans to roll out CTV apps for some of its other publications.

“We wanted to start with the standalone app just to get the videos on the platform initially and see how the audience responded,” Pauley said. He acknowledged that it helped that Vox Media signed deals with advertisers like Hilton Hotels & Resorts to sponsor the apps’ launch. Pauley declined to discuss specific stats like monthly viewership, but he said the average amount of time individual viewers spend watching its videos via its CTV apps is “significantly higher than on YouTube or on our websites.”

While Vox Media started upon the standalone CTV app path, it has not ruled out spinning up its own 24/7 streaming channels. Eater’s audience is accustomed to viewing its videos on demand, so that route made the most sense initially, but Pauley said Vox Media will likely enter the 24/7 streaming channel market sometime in the near future. “We’re not going to stop with just standalone apps. It’s just the starting point,” he said.

Another large digital publisher, however, has all but ruled out orienting its CTV strategy around a standalone app. “It’s really hard to get people to consume video on your own platform,” the executive said. The publisher tried, but found that “building our own [CTV] presence has not been very lucrative.” 

As a result, this publisher is looking into starting up a 24/7 streaming channel instead to distribute on free, ad-supported streaming TV platforms like Pluto TV and Roku’s The Roku Channel that already have an audience. But even then the publisher has some concerns. “We’re seeing a lot of people build [streaming] linear offerings that don’t seem to get off the ground,” the executive said.

You can see why some publishers would be content to have their YouTube channels serve as their CTV beachheads rather than deal with this dilemma. 

However, CTV appears poised to follow mobile’s model: While the most loyal members of a publisher’s audience may use their standalone apps, the majority of viewers are likely to be found within others’ platforms. Additionally, a publisher has to more actively market its CTV app, such as by running ads on CTV platforms in addition to promoting it on its other properties, whereas a 24/7 streaming channel can benefit from people scrolling through a platform’s programming guide.

“If you’re a new brand right now, it would be really hard, without a meaningful marketing push, to build and sustain an owned-and-operated app,” said an executive at a third large digital publisher. By contrast, “the biggest opportunity for a content creator that owns their own catalog is right now with the FASTs.”

This executive would know. For the past couple of years, the third large digital publisher has operated its own CTV app as well as a 24/7 streaming channel distributed on other streaming platforms. Historically its CTV app’s audience was “far bigger” than its streaming channel’s audience. But within the past two years, the comparison has flipped with a slight majority — “maybe 55%,” said the executive — of viewers streaming through its 24/7 channels instead of its standalone app. 

In terms of revenue, this third publisher still makes more money per app user than channel viewer. That’s because it has more data on that app audience that it can use to sell more targeted ads than it can for its 24/7 streaming channel. But even that juxtaposition is in flux, and the executive expects the average revenue per viewer to equalize between the two properties as advertisers spend more money with the FAST platforms and the platforms’ ad technology improves to support the level of targeting available within publishers’ own CTV apps. “There’s starting to be a decent bit of equilibrium,” said the executive. 

Confessional

“Anytime those legacy TV mindsets come into connected TV, it makes it more burdensome for a producer.”

— Media executive on the potential for pay-TV distribution deals’ most-favored nation clauses to be adopted by streaming platforms

Stay tuned: Another production shutdown?

A resurgence in coronavirus cases around the world is putting everyone on the lookout for another lockdown — and potential production shutdown.

On Oct. 30, non-essential businesses in France were forced to close until at least the end of November, and England will follow suit on Nov. 5 until Dec. 2. Fortunately for TV, film and digital video producers, the British government will allow movie and TV show productions to continue, seemingly without any new conditions or restrictions. That could set a precedent for other countries, like the U.S., where coronavirus cases are on the rise and productions have returned to physical sets and studios.

Of course, this is 2020, so anything could happen. That’s why many producers have taken precaution in their production resumptions. In addition to the abiding the necessary health and safety measures, they have dipped rather than dived back into production, scheduling smaller shoots that can be shut down as easily as they could be set up. However, that’s easier to accomplish for short-form programs, like digital video series and branded videos.

Larger productions, like network TV shows, have less leeway since they require more time to shoot. The potential for those productions to be put on hiatus could explain why CBS has decided to cut the number of episodes for its scripted shows. The move would not only ensure CBS banks complete seasons of its shows but also that it would avoid taking on the costs of stopping and starting shows.

Numbers don’t lie

22 million: Number of people that have signed up for NBUniversal’s Peacock.

$783,718: Price for a 30-second ad slot in NBC’s “Sunday Night Football,” TV’s most expensive program.

$13.99: New price for Netflix’s standard subscription plan.

Trend watch: Pay-TV subscriptions

While trending downward for years, the pay-TV subscriber decline is not following a straight line.

Cord cutting seemed primed to accelerate in the wake of the pandemic. In the second quarter, it did. But the trend seems to have shifted gears in the third quarter towards surprising results.

Pay-TV providers Comcast and AT&T still lost hundreds of thousands of subscribers, but fewer than might have been expected. Comcast, for example, lost 273,000 pay-TV subscribers, but financial software firm FactSet projected it would lose 466,000 subscribers. Meanwhile, AT&T lost 590,000 subscribers, which is a lot, but way less than the 1.2 million subscribers it lost in the third quarter of 2019.

Then there’s Charter, which grew its pay-TV subscriber base for the second straight quarter. The growth wasn’t astronomical — an addition of 53,000 residential subscribers — but growth is growth. Additionally, the streaming pay-TV subscriber base is growing. More than 3 million people now subscribe to YouTube TV, up from more than 2 million in February and despite a price hike over the summer, according to Google parent Alphabet’s latest earnings report.

The growth at Charter and YouTube TV, combined with Comcast’s and AT&T’s smaller-than-expected losses, suggests that the size of the pay-TV subscriber base is shrinking, but the pace of that contraction is slowing down. That would support CNBC’s recent report that some media companies believe the number of pay-TV subscribers will stabilize around 50 million households within the next five years. Of course, a lot — i.e., everything — could change between now and then.

What we’ve covered

Why CNN’s Great Big Story failed to survive:

• The social video publisher lost money, lost leaders and ultimately lacked support within WarnerMedia.
• As of September 2020, Great Big Story had only reached 25% of its sales goal for the year.

Read more about Great Big Story here.

Quibi’s flameout is a cautionary tale for advertisers:

• Initially, Quibi asked advertisers to commit to spend more than $20 million, including an upfront payment, in its first year.
• Eventually, the commitment was cut to $15 million but with little safety net.

Read more about Quibi here.

TikTok emerges as unlikely beneficiary of use-it-or-lose-it ad spending:

• Before this year’s ad budgets evaporate, advertisers are using their remaining dollars to test TikTok.
• To gauge TikTok’s value, advertisers are comparing it against TV.

Read more about TikTok here.

What we’re reading

Netflix’s leadership shakeup aftershocks:
Netflix’s ouster of its original TV chief Cindy Holland continues to ripple across the company two months after the streamer replaced her with Bela Bajaria, according to The Hollywood Reporter. While the move befitted Netflix’s “earn your place each year” corporate ethos, it has unnerved employees within its original programming division and been followed by three more content executives leaving the company. It also may be affecting Netflix’s deals with top TV showrunners. “Black-ish” creator Kenya Barris is looking to get out of his Netflix deal to switch to ViacomCBS, according to Deadline. However, the turmoil may only temporarily affect Netflix’s content deals, as industry executives told The Hollywood Reporter that the shakeup should streamline Netflix’s original programming organization by making it easier to identify to whom a project should be pitched.

Streaming’s profitability problem:
As people tune out of traditional TV and stream more shows, TV companies have little choice but to follow suit or fade away. But the move can be costly to companies’ bottom lines, as former WarnerMedia executive Doug Shapiro explains in a post published to Medium. For starters, there’s the loss of traditional pay-TV’s dual revenue stream. Additionally, TV companies have to take on new streaming-specific operating costs while maintaining their linear businesses. Then there’s the fact that, at the moment, streaming doesn’t rake in as much revenue as traditional TV. Eventually streaming’s economic growing pains should go away, and the companies that survive should then profit. But it’s a question of who will be able to afford to survive.

Comparisons made against the second quarter are not exactly fair. For many media companies, the immediate period after the coronavirus crisis pushed people to quarantine and advertisers to cut spending was when the ad market bottomed out. Media companies had hoped that the easing of shelter-at-home orders would spur advertisers to start spending again in the third quarter and then pick up in the fourth quarter, heading into the U.S. presidential election and the holiday shopping season.

“Everyone was planning for Q4 this year to be a big one. Political has had a lot to do with that,” said a fourth media executive. GroupM projected that political advertisers would spend $15 billion on advertising this year, including $1 billion on digital ads.

However, political has not been the business booster for all media companies. The second media executive said that their company has “not seen a windfall of political dollars.” Instead, that publisher’s rebound has been fueled by consumer packaged-goods, streaming, pharmaceutical, healthcare and tech advertisers. The first media executive similarly said that, while their company did benefit from political advertisers, streamers have continued to spend and more money from consumer electronics manufacturers is flowing into the market, with new phones and gaming consoles being released ahead of the holidays.

Activity among non-political advertisers will become even more important after the election-related ad dollars evaporate. Political advertisers have eaten up so much of the market — including siphoning YouTube’s supply —that some advertisers in other categories were holding back portions of their fourth-quarter budgets until after the election when the added competition abates, according to media and agency executives. “When you’re getting priced out on everything, you’re not going to spend. I expect the typical holiday demand to come flowing in after the election,” said the third media executive.

However — because it can not be said enough in 2020 — nothing is guaranteed. Since the spring, advertisers have been wary of making long-term commitments, as evidenced by the greater flexibility they sought in this year’s TV upfront market. As a result, “the RFP cycle has shortened tremendously,” said the third media executive. Prior to the pandemic, the cycle between when an advertiser would present a media company with a pitch request and when it would expect to receive the pitch “was anywhere between two to four weeks, depending on how generous buyers were being with the seller. Now it’s anywhere between one and seven days,” said an agency executive. 

That shortened sales cycle means that media companies are not only still in the midst of closing deals for November and December but still gauging overall demand for those months.

“What seems to remain to be written, though, is how the second half of the fourth quarter shapes up. We have a good amount of brands that are waiting to see what happens … with the election [in order to determine] how they’re going to allocate money in December,” said the first media executive.

While wary of an ever-volatile ad market, media executives are optimistic about the last two months of the year — and not only because of the pent-up non-political demand and influx of holiday advertisers. Typically advertisers try to exhaust every ad dollar by year end because otherwise that money goes away and it can be harder to get the same sized budget the following year. This year, that may be even more the case if advertisers may have more than the usual amount of money carrying over from cutbacks in the spring and summer. 

Those extra dollars could be especially important for media companies to grab now given the likelihood of long-lasting economic trauma. Between the uncertainty around advertisers’ 2021 budgets and a resurgent pandemic already spurring another round of lockdown orders abroad, media companies may need a white-hot fourth quarter to keep them warm through winter. Media companies with large digital publishing footprints and established connected TV properties feel well positioned in the event the current advertising upswing takes a downturn because, whatever the size of advertisers’ budgets in 2021, digital’s share of those dollars is expected to increase. But with how 2020 has gone, that’s not a given.

“Our Q4 will be our biggest quarter ever. We had planned for that pre-Covid, but it was very much in doubt that would happen. Now the big question is: is this going to carry over into the new year?” said the second media executive.

Digiday analyzed the most-recent earnings updates and calls from the top 10 ad spenders in the world, according to RECMA’s data for 2019 to see how they are adapting their marketing strategies to the ongoing crisis. RECMA’s data calculates “integrated spending,” which combines “monitored spend” — such as TV, radio, print and outdoor — and “non-traditional activity” —such as digital, data and content.

The ranking also includes new entrants versus 2018. Nestle, Expedia and General Motors now appear in the top 10, while GlaxoSmithKline (ranked #7 in 2018,) McDonald’s (#9) and Comcast (#10) no longer feature.

1. Procter & Gamble: ‘A time to spend forward’ on advertising (2019 integrated spend: $12.2 billion)

Much like the previous two quarters, Procter & Gamble has continued to be a beneficiary of the pandemic as consumers stocked up on home cleaning and hygiene products. Net sales were up 9% versus a year ago to $19.3 billion on an organic basis and the company recorded a 19% lift in net profit. 

The maker of brands including Tide, Mr. Clean and Fairy revised upwards its full-year organic sales target to a lift of between 4% to 5%, up from its previous estimate of between 2% and 4%.

On a briefing call with journalists, which was reported by AdAge, P&G chief financial officer Jon Moeller said the consumer goods company increased its marketing outlay by more than $100 million in the quarter. While it managed to make savings of around $200 million on agency, production and other advertising-related overheads, Moeller said this money was reinvested back in marketing as media consumption remains high and the “heightened need to spend on hygiene and health.”

“We view this as a time to spend forward in terms of our advertising levels, not to spend back,” Moeller said. Still, the nature of that spending is changing: P&G’s chief brand officer Marc Pritchard used his speech at the annual Association of National Advertisers Masters of Marketing conference to call for the “antiquated network upfront system” of TV buying to get an update. This year the company negotiated many of its deals directly with broadcasters.

2. Amazon: Expecting another surge in holiday demand (2019 integrated spending: $6.7 billion)

Amazon posted another soaraway quarter in the three months to September 30 as consumers continued to rely on the e-commerce giant to top up on essentials, entertainment and just about everything else. Both its revenue ($96.1 billion; up 37%) and net income ($6.3 billion; up 200%) came in well above analysts’ expectations.

However, the company’s chief financial officer Brian Olsavsky warned that while holiday sales will easily break past the $100 billion mark, “we’ll all be stretched” to keep up with the demand, which will likely eat into its fourth-quarter profit. Amazon’s Prime Day two-day sales event took place October, which it said led to a 60% increase in sales made by third-party sellers, compared with last year.

Marketing costs increased 14% in the quarter to nearly $5.4 billion, having decreased slightly in the previous quarter, when there wasn’t as much of a need for marketing as consumer demand had surged anyway. Amazon released its 2020 Christmas ad this week, featuring a ballerina whose “show must go on” despite the coronavirus upending her prior performance plans.

As for its own advertising business, Amazon’s “other revenue” segment —which is primarily made up of advertising revenue — clocked in a 51% increase in revenue to $5.4 billion. Olsavsky said ad budgets had begun to increase from a contraction that had occurred in the earlier part of the second quarter. Plus, web traffic was up. “We do a good job of turning that traffic into valuable real estate for our advertisers and for our customers to find out more about selection and brand discovery,” Olsavsky said.

3. L’Oréal: A return to growth (2019 integrated spending: $6.7 billion)

L’Oreal marked a sales rebound in its third quarter after a “crisis of supply” in the first half of the year as stores, airport concessions and salons were forced to close. Sales rose 1.6% on a like-for-like basis to just over €7 billion ($8.2 billion,) which it credited to “remarkable performances” in China and Brazil, the reopening of salons and the acceleration of its e-commerce business.

Unlike earlier in the year when some marketing launches were put on ice, “all of the launches initially planned went ahead, business drivers and media investments were strengthened” as it pressed ahead with its “back to beauty” plan in the third quarter, said L’Oreal CEO Jean-Paul Agon.

In a presentation during L’Oreal’s capital markets day in September, the company’s chief digital officer Lubomira Rochet said 50% of its business is digital and 50% of its “growth drivers” are now digital. The company now expects to record like-for-like sales growth for 2020, despite a tough few months related to the pandemic. 

4. Unilever: Increased spending and tooling up “digital hubs” (2019 integrated spend: $6.3 billion)

Unilever, the maker of Dove deodorant and Hellman’s mayonnaise, reported a 4.4% lift in underlying sales growth in its third-quarter, surpassing analysts’ expectations of 1.3% growth. Like P&G, Unilever benefited from consumers in western markets continuing to stock up on hygiene and cleaning products — but also saw a 5.3% bounce back in emerging markets where lockdown restrictions had begun to ease.

Speaking on the company’s third-quarter earnings call, Unilever CEO Alan Jope said the company increased marketing spend in the quarter and planned to increase marketing spend again in the fourth quarter.

That outlay won’t just be on traditional spending, but also investing in people and “future-facing skills,” particularly around digital marketing, he said. The company is ramping up hiring for new digital hubs, charged with managing “content-driven, highly-targeted, data-led campaigns,” Jope added.

That said, Unilever also plans to invest “heavily in marketing to support our brand campaigns” now that many markets have stabilized versus the beginning of the year. 

5. Volkswagen: Strengthening ‘digital competence’ (2019 integrated spending: $4.5 billion)

Volkswagen, the world’s biggest automaker by sales, marked a return to profit in its third quarter as sales began to recover in China — its largest market — and western Europe. The company sold 2.6 million vehicles in the quarter and while sales have fallen more than a fifth so far this year, it posted a pre-tax profit €3.6 billion ($4.2 billion) in the three months to September.

Still, its full-year global sales are expected to drop by as much as 20% this year and the outlook is still uncertain, given the potential for further countries to return to lockdown measures.

“In this challenging situation, we … succeeded in making significant progress in implementing our strategy, for example by further expanding e-mobility and strengthening our digital competence and in maintaining the financial leeway required for the substantial investments in the future,” said Frank Witter, Volkswagen CFO.

The company still expects to post an operating profit in 2020. However, that profit will be much lower than last year and its margins are lower than that of its competitors, such as Ford and Fiat Chrysler.

6. Renault Nissan Mitsubishi Alliance: A focus on electrification and boosting Nissan’s image in the U.S. (2019 integrated spending: $4.4 billion)

Renault reported an 8.2% drop in revenue for the September quarter, but that was a considerable improvement on the 35% dip in sales it recorded in the prior quarter. The company said its cost-cutting plan is paying off, plus it had helped increase its market share in Europe, largely thanks to a surge in sales for its Zoe electric hatchback, which almost doubled in the period. New CEO Luca de Meo plans to announce a full strategic plan for the company in January.

Meanwhile, while Japanese alliance member Nissan forecast its biggest ever operating loss ($4.48 billion for the year ended March 31) in July, the outlook is now looking less bleak. Nissan CEO Makoto Uchida said in an interview with Automotive News “if you look at the past three months, I think the number is much better,” referring to global demand for vehicles. A key focus for the coming months will be the U.S. market, where Uchida said “we really need to rectify ourselves in terms of operations and reestablish our brand image.” Leading that charge is Allyson Witherspoon who this month was promoted to the role of U.S. CMO.

Mitsubishi is also expecting to report a loss for the 2020 fiscal year. Like other members of the alliance, it is streamlining its operations and placing a big focus on electric vehicles. Mitsubishi wants electrified vehicles to count for half of its global sales in 2030, up from just 7% now. Its midterm plan, through to 2022, focuses largely on cost-cutting and eco-friendly models.

7. Coca-Cola: A refined “master brands” strategy (2019 integrated spending: $4.3 billion)

Lockdown conditions continued to hit beverage sales in restaurants, bars and other out-of-home venues, but Coca-Cola’s third quarter was a marked improvement on the second. Revenue dropped 9% to $8.6 billion, compared to a 28% slump in the prior quarter.

Coca-Cola is dramatically streamlining its businesses and said it aims to cut its 430 “master brands” down to just 200. Among the brands being discontinued are its Zico coconut water brand and Tab cola. 

Marketing spend was down 30% in the most-recent quarter, compared with last year, though this was still a sequential increase on the first half of the year when the company dramatically cut its expenditure. 

The company is still on a marketing efficiency drive, though CEO James Quincey emphasized on the earnings call that “this is not a top-down-driven exercise to reduce expenses” but rather a way to increase effectiveness and reinvest savings back into its reduced portfolio of brands. For example, the company was “marketing strongly” behind the Coke brand in the third quarter, which Quincey said helped it gain share. The company plans to increase marketing investment behind Coke in the fourth quarter and into 2021, he added.

8. Nestle: A focus on healthy and “trusted brands” (2019 integrated spending: $4.2 billion)

Throughout the coronavirus crisis, Nestle has credited a consumer desire for “trusted brands” — such as Maggi noodles and DiGiorno frozen pizza —for providing a boost to its sales. 

The Swiss food giant revised upwards its like-for-like full-year sales forecast last month, saying the number would come in at 3%, up from its previous estimate of between 2% and 3%. 

The company posted third-quarter sales growth of 4.9%, in which it credited gains in its health-science business as consumers stocked up on vitamins, supplements and nutritious drinks.

Last month, Nestle upped its stake in healthy meal delivery startup Freshly, to take full ownership of the company — a move designed to diversify its portfolio and cater to the increased consumer demand for e-commerce.

Elsewhere, Nestle has embarked on a big sustainability push, having committed to making 100% of its packaging recyclable or reusable by 2025.

9. Expedia: Sharp pullbacks (2019 integrated spending: $4.2 billion)

Back in April, Expedia Group chairman Barry Diller said while Expedia usually spends around $5 billion a year on advertising, “we won’t spend probably $1 billion this year” as the travel sector felt the brunt of lockdown measures and consumers’ leeriness of airplanes. A great deal of the company’s ad spend goes on digital performance channels, particularly Google.

“The second quarter of 2020 represented likely the worst quarter the travel industry has seen in modern history,” said CEO Peter Kern in July, though he added that April was the “bottom of the trough” and that bookings began to improve through May and June. But as lockdown measures once again get enforced around the world, the outlook looks bumpy.

The company laid off around 12% of its global workforce in February and, as Skift reported last month, is preparing to lay off more employees within its travel partners group as it continues the streamlining of its business and looks to make more than $500 million in cost savings.

Selling and marketing costs were drastically reduced in the second quarter, down 83% to $283 million. The company merged its brand groups as well the performance marketing groups that sit within them. “There’s big opportunities ahead, we believe, in doing the work as a portfolio of brands and optimizing for that portfolio as opposed to optimizing each brand by itself,” said Kern on the company’s second-quarter earnings call. Expedia reports its third-quarter earnings on November 4.

10. General Motors: Catering to “pandemic-induced auto demand” (2019 integrated spending: $3.9 billion)

General Motors reports its third-quarter earnings on November 5. Like other automakers, analysts also predict its profit will return to pre-coronavirus levels, the WSJ reported. 

The company revealed in October that its third-quarter vehicle sales dropped by around 10% compared to the year-ago quarter, but that sales improved sequentially each month within that quarter. 

The company’s chief economist Elaine Buckberg said the pandemic had led to a build-up in demand for automobiles. Research from McKinsey & Company and Ipsos showed that many consumers see private vehicles as a “safe space” and that more city residents have sought to buy vehicles as they move out to the suburbs. Very low automotive loan interest rates plus savings from a cutdown on vacation, restaurant and other entertainment costs had also driven up demand.

In an interview with Digiday, Melissa Grady, CMO of GM-owned Cadillac explained how the luxury auto brand had changed its advertising “around every two weeks” through the pandemic. In September, Cadillac launched a new brand campaign for the Escalade starring actress Regina King dubbed “Never Stop Arriving.”