Offence vs Defence: Digital Marketing Strategies to Thrive in the New E-Commerce Landscape

June 2, 2020

Digital Marketing Amelia Erskine By Izabela Catiru

Covid-19 has thrown everything up in the air. E-commerce has always been a fast-paced, competitive industry, dominated by a handful of juggernauts, and digital marketing is a critical component for all brands to compete in this world. However, consumer behaviour and demand have shifted so rapidly and become unpredictable over the last few months that previous plans and strategies have been thrown out the window. Organisations are pulling focus back to essential operations and marketing spend is often the first on the cutting floor when budget decisions are made. After all, it doesn’t make sense to invest in components and products that are no longer performing if advertising budgets are getting slashed across the board.

When budgets are tight, how do brands make the most of what remains? In order to thrive in the new order, brands must decide whether to adopt an offensive or defensive strategy — both involve adapting rapidly to changing consumer behaviour. Here are the key considerations for each strategy.

Defensive Strategy

For those brands that have had to reduce their advertising investment, the priority is making what’s left profitable. Dayparting and campaign scheduling are essential to ensure you are spending and bidding in a smart, time-efficient way. Brands can do so by automatically activating campaigns and changing bids during hours when buyers convert and pausing when they don’t.

To further save costs, audiences should be refined and segmented based on important actions or non-actions that they take on your website and product pages. Re-targeting customers solely based on time spent on landing pages can be a risky strategy, as users are currently spending much more time online. Prompting your audiences with additional signals such as products added to cart, categories visited or building micro-conversions (signing up for newsletters or using features like “try it on”) can be a great way to improve conversion rates. Furthermore, removing underperforming products and those likely to run out of inventory is a great way to redirect the marketing budget to campaigns that get the most output from your input.

It’s also important to analyse contribution margins. If advertising programs were generating incremental profit to a business (and if they weren’t, they were doing it wrong), then simply cutting advertising off will result in even less cash flowing into the business. Brands need to fully evaluate these contribution margins and only cut those ad programs that aren’t contributing positive ROI to the business.

Offensive Strategy

For brands that haven’t had their budgets severely cut, the disruption has created new opportunities for expansion. Organisations across e-commerce have been hit by dwindling budgets and scaled back strategies. Amazon has massively reduced its presence on Google Ads, most likely due to the substantial increase in direct traffic and they are not wanting to put further strain on their supply chain. With these titans temporarily out of the game, there’s a huge opportunity for brands retaining their budgets to expand into high yield advertising spaces, often paying much less for clicks than they would have previously had to. Now is the time for brands to really pay attention to tools like Auction Insights for Google, identifying the gaps around products they sell.

As the shifts in both consumer behaviour and the marketing landscape fluctuate on an almost daily basis, it’s especially important to narrow the performance reporting window across all campaigns. This way budgets can be reallocated in real-time to the marketing efforts for the highest performing products and channels, rather than seeing what you should have done after the fact.

Understand the Customer

Whatever strategy brands decide to follow, understanding the consumer’s new demands and behaviours should be the starting point. Brands can look at how their own product performance has shifted, as well as global data trends to see what products their customers are now demanding. For example, if I am selling shoes, the data could highlight that I should shift my budget and ad spend to more casual or athletic categories rather than dress shoes. This might seem like common sense but can be make or break for a business.

Brands also need to recognise the ever-changing customer path to purchase from start to finish. Location extensions that usually led customers to the store that had products
they were looking for, might lead them to locations that are not currently open, so should be paused until shops reopen. Marketing messaging should be fully re-assessed in the current situation. For example, a high performing swimwear ad from three months ago, with groups of people enjoying a day out at the beach, might end up accidentally alienating customers who find it insensitive. Instead, look to create authentic, up to date and thoughtful content, which can be done on a low budget.

As global lockdown measures begin to ease, brands need to be prepared for a number of different scenarios. Rather than shifting back to the way things were, they should take the lessons learnt from previous years, especially the high performing channels and components from last year, and look at what opportunities have opened up due to the pandemic. By focusing on the overlapping factors, brands should have a clear idea of what their strategy should be going forward, no matter the budget.

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If you want more advice about how to manage your advertising strategies in the age of COVID-19 why not check out our Tipsheet: 7 Ways to Adapt Your Online Advertising During the COVID-19 Crisis

Originally published in New Digital Age