Gartner: 44 Percent Of CMOs Are Facing Midyear Budget Cuts Due To COVID-19

Almost half of chief marketing officers (44 percent) are facing midyear budget cuts in 2020 as a direct result of the pandemic, shows Gartner’s “The Annual CMO Spend Survey Research: Part 1.” Fielded from March to May, the responses reflect CMOs’ optimism about business rebounding in the next year and a half, in addition to a desire to play things safe in 2021 by targeting existing markets.

After somewhat adjusting to COVID-19, CMOs are hopeful about the future—when asked about the impact of the business and economic climate over the next 18 to 24 months, 73 percent of CMOs said they expect the pandemic’s negative impacts to be short-lived. Similarly, 57 percent believe performance will return to pre-pandemic levels in the next 18 to 24 months.

Those who expressed some signs of concern about the future impact of COVID-19 include respondents in travel and hospitality (22 percent) and consumer product brands (34 percent).

Despite their rosy outlook, CMOs acknowledge the pandemic’s effects on their marketing budgets. For example, 44 percent of CMOs are prepared for a moderate cut of up to five percent or a larger cut of more than 15 percent.

Among some of the adverse actions CMOs have taken in response to COVID-19 are canceling or postponing customer-facing marketing events (44 percent), delaying a campaign launch (41 percent) and reducing permanent, temporary and contractor headcount (37 percent).

Other ways CMOs responded to the pandemic include launching special COVID-19 communications to customers (61 percent), adding listening tools to monitor COVID-19 customer sentiment (47 percent) and promoting ecommerce offerings (40 percent).

Over the last few months, CMOs have come to value brand strategy more. In fact, 33 percent of respondents cited brand strategy as their most vital strategic capability, overtaking analytics at 29 percent. Whereas last year, brand strategy was at the bottom of the list.

Looking ahead, 79 percent of CMOs are focused on their existing markets to fuel growth, particularly by introducing new products (45 percent) and increasing sales of existing products (34 percent).

Gartner’s findings are based on an online survey conducted among 432 respondents in the US, Canada, France, Germany and the UK.

Modernizing OOH With Ubimo’s Norm Chait

During this 223rd episode of “Marketing Today,” I interview Norm Chait, the Head of Out-of-Home Solutions at Ubimo.

On the program today, we modernize my definition of out-of-home based on what Ubimo is doing with its location-based intelligence offering and bringing audience understanding, location, and traffic monitoring to an old medium. The updated view Chait shares on what out-of-home should look like today can expand what’s possible for marketers.

Chait begins by talking about what attracted him to the out-of-home space and how Ubimo uses location intelligence to understand what people do throughout their day. We then discuss how technology has dramatically changed the out-of-home space by helping marketers understand where a particular audience is originating from and where they’re going. Chait says, “it all basically starts and ends with audiences and understanding what these folks are doing and how do we tie them back to a physical location.” Then we talk about how marketers can leverage these data points in the out-of-home space and how privacy is handled. He says, “every signal we see, every segment that’s built, is based on opt-in data, and it’s all based on location services.” We then talk about how Ubimo has approached data during COVID and how the current environment presents marketers opportunities to connect with shoppers when they’re thinking about shopping.

Highlights from this week’s “Marketing Today”:

  • What attracted Norm to out-of-home. 01:09
  • Learn about Ubimo. 02:49
  • How Quotient fits into the mix. 04:26
  • Bringing measurement to behavior that would otherwise be a void. 05:49
  • How marketers can work with Ubimo. 07:38
  • The digital out-of-home DSP. 08:56
  • Different elements of the data that can be leveraged to understand the traffic of out-of-home placement. 10:50
  • How privacy is handled in this environment. 13:14
  • COVID dashboards. 14:29
  • How marketers should be thinking about marketing differently during this time. 19:40
  • Norm shares a defining experience. 21:52
  • Norm reflects on advice he would give to his younger self. 23:29
  • Norm shares about an impactful purchase he made in the last 6-12 months. 24:27
  • Are there any brands, companies, or causes that Norm follows that he thinks other people should notice? 25:58
  • Norm’s take on the top opportunity and threat facing marketers today. 27:59

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Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on opportunities around brand, customer experience, innovation, and growth. He has consulted with Fortune 100 companies, but he is an entrepreneur at his core, having founded or served as an executive for nine startups.

Nielsen: Remote Workers Are Streaming More And Buying Locally

Nearly half of consumers feel more connected to their community and are making more local purchases, according to a special work-from-home edition of Nielsen’s Total Audience Report revealing what marketers should know about how lockdown life is impacting consumers’ media habits, purchasing behavior and productivity.

The results of Nielsen’s Remote Workers Consumer survey of 1,000 adults who worked remotely prior to and during the pandemic show that two-thirds of respondents are new to working from home full-time as a result of COVID-19. Fifty-three percent of the same group cited the convenience of working from home as the top reason they worked from home at least occasionally prior to the outbreak.

Consumers’ perceived productivity rates have remained steady, with 72 percent of new work-from-homers reporting they have maintained or increased their productivity during lockdowns.

Despite 47 percent of respondents saying they’re less productive at home due to the amount of distractions, consumers aren’t ready to go back into the office anytime soon. Nielsen found that 80 percent of respondents would prefer to work for a company that lets them work from anywhere of their choice. In addition, 57 percent of workers have found it easier to manage a healthier work-life balance since the pandemic started.

The report shows that marketers have an opportunity to reach remote workers, who are listening to the radio, watching more digital content and scrolling social media platforms on a daily basis.

For example, from February to April, new work-from-homers spent the most time watching digital content, at 57 percent.

It’s interesting to note that despite the demise of the daily work commute, consumers’ radio habits haven’t faltered. In fact, 40 percent of respondents say they listen to the radio or streaming services everyday while working, while 35 percent do so at least once a week.

Thirty-three percent of people watch television or steam content during a work break everyday, mostly news (47 percent), comedy (40 percent) and movies (36 percent).

As of Q2, Nielsen’s Streaming Meter revealed that streaming now comprises one-fourth of all television minutes viewed. Netflix is the largest contributor to streaming time at 34 percent, followed by YouTube at 20 percent. Disney+ accounts for four percent of total streaming share.

Like streaming minutes, the number of services consumers are subscribing has also increased as 25 percent have added a service in the past three months, while just two percent are reducing their number of paid subscription services.

Over half, 64 percent, of respondents say they watch local news while teleworking to remain informed, which reflects the increase in local spending Nielsen has identified.

As for social, 31 percent spend time on social apps everyday, while 33 percent use social media at least once a week.

Other lifestyle changes teleworking has induced include consumers rising later (54 percent), staying up later (49 percent) and buying locally (40 percent), providing marketers an opportunity to reach consumers who are remaining close to home.

Television findings are from Nielsen’s TV Panel, which is based on a sample of over 40,000 homes; digital data is based on Nielsen’s Total Media Fusion, which is reflective of both panel and census measurement; and radio estimates are based on RADAR and the National Regional Database.

Listen In: Bracing For A Sea Change In Post-COVID Media Planning

(Originally aired August 11th on LinkedIn Live.)

We’re back with another episode of Listen In. This week, we’re featuring a conversation between Ayzenberg’s Matt Bretz and Heather Cohen, VP of Media, about the widespread changes in media planning.

Matt and Heather discuss how COVID has accelerated everything as they examine hyper-trends that are being adopted faster due to the pandemic. Other topics include: What’s happening in the world of media, how to grapple with the uncertainty occupying our minds in the midst of so much change and what we’re hearing from clients during these times.

About Listen In: Each week on Listen In, Bretz and a rotating cast of hosts from Ayzenberg interview experts in the field of marketing and advertising to explore uncharted territory together. The goal is to provide the audience with actionable insights, enabling them to excel in their field.

Emarketer: Digital Out-Of-Home Ad Spend Will Reach $3.84 Billion In 2023

According to eMarketer, this year, digital out-of-home (DOOH) ad spending will account for one-third of total US OOH ad spending, increasing by 1.6 percent to reach $2.72 billion.

As more and more direct-to-consumer (D2C) brands invest in outdoor advertising, the researcher expects the figure to rise by 19.2 percent in 2021.

DOOH has significantly grown since 2015, when its share of total OOH was just 17 percent, about half of what it is today, says eMarketer.

By 2023, 42 percent of all US outdoor ad spending will come from DOOH. 

Digitized outdoor displays have gained momentum in recent years, as Outfront Media saw the number of total digital displays in its US portfolio during 2017 to 2019 jump from 1,693 to 7,266. Whereas Lamar Advertising reported 335 new digital outdoor ad units in 2019, with the intention to add another 250 DOOH displays in 2020.

Insight from Outdoor Advertising Association of America (OAAA) reveals that during the first half of 2020, in the US, there were 7,847 digital transit displays, 5,830 digital shopping mall-based ad units and 5,742 digital street furniture outdoor ads.

During the first half of 2020, the number of digital billboards, the most common type of DOOH ads, in the US reached 9,600, a 43.3 percent increase since 2016.

EMarketer estimates DOOH ad spending will reach $3.84 billion in 2023.

The expansion of 5G networks has enabled brands to utilize artificial intelligence (AI) to create more targeted DOOH campaigns, says Grand Visual chief creative officer Dan Dawson. For example, McDonald’s used data on weather and the time of day to present messages on DOOH ads in the morning to remind passersby how long until breakfast finishes, and on sunny days to promote ice cream sundaes.

69 Percent Of Brands Shift Programmatic In-House Amid Heightened Data Privacy Rules

Sixty-nine percent of brands have taken their programmatic advertising in-house, according to an international report conducted by the Interactive Advertising Bureau (IAB) and Accenture Interactive.

The report analyzes how programmatic’s role in the digital media ecosystem is evolving in companies in the US, Europe and Latin America amid heightened data privacy regulations and concerns.

Programmatic’s share of digital ad spend worldwide is poised to grow to 68 percent this year, according to Zenith. That number is likely to further increase as mobile and digital consumption rates soar during the pandemic. In the last five years, programmatic’s share of digital ad spend worldwide has increased 54 percent, with more than two of every three display ad dollars being spent on programmatic.

Programmatic advertising represents 89 percent of digital ad spend in the UK, nearly 85 percent in the US, 80 percent in Europe and 63 percent in Latin America.

Due to programmatic’s scale and efficiency in targeting and placing digital ads, at a time when digital consumption is at an all-time high, more and more brands are in-housing some or all of their programmatic, the survey reveals.

Twenty-one percent of brands have completely brought programmatic in-house while 48 percent have partially done so.

Europe has displayed the strongest desire to move the function in-house. In fact, 74 percent of European organizations have completely or partially shifted programmatic in-house, which is more than organizations in either the US and Latin America.

Thirty-one percent of brands in Europe have fully moved programmatic in-house while 43 percent have partially done so. Whereas 16 percent of brands in Latin America have completely moved programmatic in-house and almost half have partially done so.

In 2018, the European Union issued the General Data Protection Regulation (GDPR). The US followed when in 2020 it debuted the California Consumer Privacy Act (CCPA). While stricter data regulations reduce the number of consumers who can be targeted, those that can be targeted are more interested and relevant, which results in more effective ad spend and a great sense of trust between brand and consumer.

With the demise of cookies looming, a brand’s ability to effectively control programmatic in-house will depend on its ability to obtain and manage its own first-party data.

“It’s an issue of transparency. We had a contract through our agency, but they didn’t have a transparent programmatic offering. Without transparency, we can’t improve ad effectiveness.” one consumer packaged goods executive told IAB.

Bringing the capability in-house has its challenges, including getting buy-in across the company and flexibility in making the shift. Hence why the companies that have taken all or some of their programmatic operations in-house are utilizing a hybrid approach by seeking external support.

The survey also found that digital video ad spend share worldwide is estimated to be 75 percent this year, an eight percent increase from 2019.

Predictive Analytics Is Critical For Media Planning—Here’s Why

Predictive analytics, the use of real-world data and machine learning techniques to identify the likelihood of future outcomes, has become a cornerstone of media planning. Human intelligence, however, is just as important to the success of predictive analytics’ application as technology is. To understand how, we spoke with Piotr Urbanski, Ayzenberg associate director of marketing science, and Ayzenberg chief marketing officer Vincent Juarez, who both work closely to craft client strategies based on historical data and predictive analytics, or predictive modeling. The two discuss all things predictive analytics: what it is, why it’s important for marketers and why it’s critical for media planning, especially during times of uncertainty. 

What are predictive analytics?

Piotr Urbanski: There are two approaches to analyzing data—the first is predictive analytics, or predictive modeling, And the second is causal inference, which is a little bit more descriptive and aims to understand the cause and effect between the numbers. For example, if one goes up, why does the other one trend with it? Whereas predictive modeling doesn’t consider the why; you just want to be as accurate as possible. Those who use predictive modeling know it’s a very good predictor and they get very good outcomes, but they don’t measure the why.

How do predictive modeling and causal inference differ?

PU: They use the same statistical tools. The most basic predictive models can perform a regression run or trend line. As one value goes up, the other value also goes up. And then you could extrapolate, or predict, based on that trend. 

Causal inference takes it a step further to consider theoretically how A impacts B. For example, if A is temperature and B is crime rate, you see that as temperature goes up, crime rate also goes up. Temperature is a good predictor of crime. But does that mean temperature causes crime? So at that point you start digging into various different theories.

For analysts, causal inference makes our job much easier. Because part of your research is already researching the cause and effect, you get really easy, actionable insights. So in most cases, now that you’ve identified a cause, you can control that cause or influence it in some way. In a nutshell, predictive analytics and causal inference are two sides of the same coin.

Why are predictive analytics important for marketers?

PU: On the media side, predictive analytics helps predict where you should be targeting money by analyzing the behavior of consumers purchasing your product or engaging with your brand. To be really good at predictive analytics, a human element is still necessary. So on top of your findings, you’ll typically have a marketing science team that layers additional analysis to not only make sense of the data but also predict between platforms to achieve a more wide-reaching view.

At the end of the day, predictive analytics help a company’s bottom line. Let’s say you’re running a campaign that’s a million dollars. If you can become more accurate by even a fraction of a percent, you’ve saved tons and tons of money and easily added value that wouldn’t have existed before. It also makes your actions accountable because you know what isn’t working and where to stop or start paying for ads to get the biggest bang for our buck.

How do predictive analytics impact Ayzenberg’s media department and planning?

Vincent Juarez: I oversee both media groups at Ayzenberg, the media planning group and the influencer marketing group. A lot of our clients rely on us to provide them with maximum transparency in the campaign strategy that we craft for them. This is not only to validate the results of the campaign, but also to create models that predict what those results are going to be. That’s where predictive analytics become especially important for marketers, because in this day and age, we’re held to a higher standard of accountability. As a result, the agencies that work with them are held to an even higher standard of accountability to try to predict a certain amount of return on your investment.

The relationship between our media department and marketing science team is symbiotic. We provide the wealth of data that gets fed into the marketing science team’s models to try and predict outcomes based on different marketing mixes, different marketing strategies and different budget allocations by vehicles and so on.

It’s hard for Piotr and his team to do their job without the data that my team generates around the real world basis. He takes our analytics and our forecasting to a scientific level that our media planners and marketers just don’t have.

This is one of the reasons why after many years, we identified the need for a dedicated marketing science group. As a digital- and social-first business model, we found that there was a distinct need for a marketing science group to provide us with that next level of expertise to assess the health of a campaign and predict the outcomes of campaigns that we create on behalf of clients.

How has COVID-19 affected the media team’s use of predictive analytics?

VJ: Because of the pandemic, marketers are a lot more careful about their investments. There’s a lot of scrutiny in terms of making every dollar work like ten dollars. As a result, predictive analytics has become even more important during this time.

Though we don’t have control over external factors that could potentially affect our forecasts, I’d say we’re very successful in our predictions. We have made a significant investment in data science because everyone wants to go into their strategy with as much information as possible to determine the success rate. 

Predictive analytics offers a safety net for marketers and for agencies to try and understand upfront the degrees of success or the risk of running a certain type of campaign. Instead of the old style of throwing millions of dollars at a specific vehicle like TV, for instance, and watching the sales numbers and hoping for the best, it’s really about trying to predict the future of the cause and effect of an investment. And having that kind of knowledge helps us differentiate ourselves from other agencies.

Ad Spend In North America Declines 31.6 Percent Near End Of Q2

Ad spend declined by 31.6 percent across North America during the last two weeks of Q2 after increasing by 91.7 percent near the end of Q1, according to Socialbakers’ Q2 2020 social media trends report. The decease is likely a result of hundreds of brands pulling their Facebook ads in a show of support for a civil rights groups-led boycott against the platform.

Socialbakers’ findings show that worldwide ad spend bounced back, growing by 26.2 percent in Q2 compared to Q1. The period of April to May, when many businesses reopened, saw a dramatic increase in ad spend and cost-per-clicks (CPC). In the US, CPC increased by 31.1 percent and globally, by 55.3 percent. CPC in East Asia rebounded earlier than most regions, causing CPC to slightly decrease, from $0.158 to $0.148.

CPC for brand ad accounts, on the other hand, hit a low of $0.075 in April, but picked back up with a 42.7 percent increase to $0.107. Still, CPC were still 23.6 percent lower than they were in Q2 2019, at $0.140.

Overall, most industries returned to normal ad spend across regions in Q2, seeing an increase of an average of 27.1 percent. Looking to recoup losses suffered during the onset of the pandemic, the accommodation industry’s ad spend surged by 151.3 percent and ecommerce’s ad spend grew by 76.3 percent compared to Q1.

Despite signs that paid advertising was inching toward pre-pandemic levels, ad spend declined by 31.6 percent near the end of June, which could be linked to the anti-Facebook boycott.

Social media ad spend hasn’t shown signs of returning to normal. In fact, ad spend for the Facebook news feed dropped by 2.6 percent, part of an ongoing decline that started in January 2019—from a high of 64.1 percent of total spend to 57.7 percent in June 2020.

Among the top five platforms by relative ad spend, the Facebook news feed decreased by 34.6 in CPC and by 40.6 percent in cost per mille (CPM).

Facebook Instream Video, however, increased by 21.4 percent in CPC and 18.9 percent in CPM.

Spend on the Instagram feed also decreased, by 4.2 percent. Instagram feed and stories declined by about 37 percent in CPC and 28 percent in CPM.

In terms of organic social media, video content on Twitter and Facebook Live spiked in Q2.

Across platforms, Twitter had the highest percentage of video. Over the last three quarters, more than 20 percent of tweets from brand profiles with over 1,000 followers included a video. That figure rose to 27.3 percent in June.

Facebook Live represented just 0.99 percent of all posts from Facebook brand profiles, resulting in an increase of 26.9 percent in Q2. From March to June, Facebook Live increased by 126 percent, indicating its importance in the time of lockdowns.

The data also show increased activity around podcasts, with the number of brands on Instagram who mentioned podcasts growing from 510 in June 2019 to 1,087 in April 2020.

The pandemic has also impacted influencer marketing. In Q2, the number of influencers who used #ad in their posts decreased by 11.4 percent year-over-year.

These findings are based on Socialbakers’ analysis of a minimum of 50 Instagram profiles and 50 Facebook pages for any given category.

Nielsen Announces Changes To Its Digital Audience Measurement

Nielsen is transforming the methodology behind its digital measurement products in response to evolving data privacy regulations and the decreasing reliance on third-party cookies.

The new methodology will apply to Nielsen’s suite of digital products, including Digital Content Ratings, Digital in TV Ratings, Digital Ad Ratings, Total Content Ratings and Total Ad Ratings.

Though it hasn’t provided full details, Nielsen says the privacy-centric methodology will help provide more transparency across third parties and the internet, enhance reporting of personal and connected devices and enable measurement flexibility by reducing reliance on third parties. 

Nielsen’s end goal is to position digital companies to better monetize their assets, optimize spend and confirm cross-platform campaign delivery. For marketers, this means a more holistic view of both television and digital data.

To support the revamp of its digital measurement, Nielsen will leverage its census data collection technology, proprietary network of walled gardens and platform data providers and new deduplication methodologies.

Nielsen chief operating officer Karthik Rao told TechCrunch that a focus on the portability of data and data models, plus the deduplication of audience, will ensure it doesn’t inadvertently count the same users on different platforms.

Nielsen will launch the new methodology in phases starting in early 2021.

The pandemic has prompted companies to adopt a host of digital services, posing new risks over data privacy breaches. Cillian Kieran, the CEO and founder of Ethyca, says that businesses can de-risk by performing diligence on third parties that process customer data, designating a data protection officer and ensuring clarity of privacy policies for consumers.

IAB: Podcast Advertising Revenues Reached $708.1 Million In 2019

With an expected growth rate of 14.7 percent this year, US podcast ad revenues are inching toward the $1 billion mark despite the global pandemic, according to the International Advertising Bureau’s (IAB) fourth annual Podcast Advertising Revenue Report which examines 2019 podcast performance and 2020 projections. The figure represents a downgrade from IAB’s pre-pandemic estimate that podcast ad revenues would increase by 29.6 percent in 2020.

In 2019, podcast advertising revenues grew by 48 percent, reaching $708.1 million, up from $479.1 million in 2018. As IAB’s research shows, podcasts are increasingly becoming part of a brand’s annual planning as annual buys in 2019 reached 47 percent, up from 24 percent in 2018. Whereas scattered advertising dropped to 21 percent of overall buys in 2019.

Top podcast advertisers included direct-to-consumer (DTC) brands (22 percent) and financial services (16 percent). The largest DTC subcategories were health and wellness (22 percent) and home and appliance (19 percent). 

Consumer packaged goods brands increased their investment in podcast ads, from two percent in 2018 to six percent in 2019. Additionally, beverage brands, restaurants and healthcare companies also doubled their investment.

For US podcast advertisers, the leading content genre was news and captured 22 percent of revenue, followed by comedy (17 percent) and society and culture (13 percent).

Direct response ads accounted for 54 percent of podcast ad revenues and mid-roll ads generated 74 percent of ad revenues, with 44 percent of spots being between 31 and 60 seconds.

Over half (66 percent) of podcast ads were read by a host vs. 27 percent which were pre-produced ads. This format makes podcasts more resistant to COVID-19 than other media because flexibility enables messaging to remain relevant as unexpected events occur and sentiments change.

The IAB attributes decreased revenue projections for 2020 to canceled or paused campaigns, a lower volume of requests for proposals (RFPs) and a decrease in cost per thousand impressions (CPMs).

Podcast advertising revenues are expected to rebound in the second half of the year, as IAB notes, historically, one-third of US podcast ad revenue is generated in Q4.

The results are based on a survey IAB sent to companies in mid-March and again in mid-April to account for any changes related to the pandemic.