As societies and companies around the world are dealing with the economic fallout of the pandemic and bracing for the future rocked by social unrest, advertising and marketing activities are being put on the back-burner.
According to a forecast by the Association of International Advertisers (WFA), in the first half of 2020, the budget for TV advertising will decrease by 33%, while print, outdoor advertising and events will see a drop of 37%, 49% and 56%, respectively. With businesses cutting back on marketing spending, advertising agencies are feeling the heat.
As the battle for the brands’ diminished marketing budgets unfolds, we ask those on the front lines – the creative agencies – for tips on how to navigate this new, uncertain terrain and what steps they are taking to strengthen the client-agency relationship. Join Vietcetera as we peer into the crystal ball together with the captains of Vietnam’s advertising industry.
Minh Thuy Nguyen, Creative Director at Ogilvy Vietnam
What is the new reality like for the creative and advertising industry?
We had to face the fact that the pandemic will have a profound effect on human behavior, something we have never experienced before. The way I went about it was by closely observing and taking note of the changes that lie on the surface, so that I could strategize appropriate responses to future events.
I am confident that Vietnamese consumer market and its creative and advertising industry will recover in every respect. It’s just a matter of time. ‘Social isolation’ and ‘working from home’ will eventually become a distant memory, a period of rest and rejuvenation, as people return to their daily lives.
Is advertising still a top priority for businesses? How should agencies respond?
Communication remains a priority but practices may change due to pandemic-related market fluctuations. Now more than ever agencies should put their professionalism on full display. Accepting change with grace and flexibility is the only way they can meet the new requirements while fulfilling their advisory function — guiding clients through these turbulent times.
What are some of the trends sweeping through the industry?
In the past three months, despite the impact of the pandemic, there's been a constant influx of new content. Mostly content geared to provide entertainment, promote public health and push special offers on e-commerce sites. These ‘trends' might have a lasting effect on the industry depending on how consumer behavior changes as the result.
At Ogilvy, our content strategy is driven by the client’s business needs and we choose media platforms, including the of-the-moment ones, very carefully. Nevertheless, pursuing the latest fad even if it means compromising the brand’s core value is not how we operate. When it comes to strategy, our focus is always to "make brands matter".
As a leader at a top creative agency, my strategy is to stay alert at all times in order to achieve optimal results, especially now when things are so uncertain.
How can brands effectively use their slashed marketing budgets?
First, the brands themselves must define what it means to be ‘effective’. To me, ‘effectiveness' is when a project’s results meet short-term goals. At the same time, these goals need to be in lockstep with the company's long-term strategy.
I don't think that going ahead with a low-cost production is the best way to utilize your budget, yet in reality it is the one approach that businesses tend to gravitate towards when budgets are cut. Brands need to be smart when making the call about marketing spending, as cutting costs is a double-edged sword that can adversely affect their image.
Understanding the pressure my clients are under, I try to accommodate their requests to the best of my abilities. The most effective campaigns I've run are the ones where my agency worked hand in hand with the brands.
Leo Phan, Creative Director, Master of Fine Arts in Communication Design
What is the new reality like for the creative and advertising industry?
The new reality of the creative and advertising industry is taking shape in the digital space where millennial users are putting their stamp on how brands and consumers interact online. Millennials overwhelmingly account for the majority of purchases of fast moving consumer goods (FMCG), motorcycles, cars and real estate.
Hence, the dominant approach to advertising and marketing has shifted from Above The Line (advertising dispatched through traditional mediums) and Below The Line (marketing dispatched without the use of traditional tools) to integrated marketing communication (digital IMC) to accommodate this new class of tech-savvy consumers.
Is advertising still a top priority for businesses? How should agencies respond?
Now, with the digital revolution in full swing, businesses should consider allocating resources to advertising more than ever. In the Digital IMC matrix, interactions such as "sharing", "likes", "comments" and the emergence of KOLs and influencers hold the potential to create service and purchasing ‘trends'. Failure to adapt to such trends can cause your brand recognition to dwindle.
As business partners, it is the agencies’ responsibility to assist brands in researching and gaining insights into the habits of consumers with a digital lifestyle.
Competitor analysis is crucial too, and agencies must invest in research to maintain their clients’ competitive edge and to position their products or services as the optimal choice. At the same time, agencies must also have the wisdom to accurately evaluate the prospective market challenges.
What are some of the trends sweeping through the industry?
Trend-setting — Advertising must be multi-dimensional to suit consumers' tech-centric lifestyles. Advertisers should train themselves to not only stay alert to emerging trends but also to be savvy enough to create them.
Creativity — Utilize creativity as a resource for the Marketing Mix (a combination of factors that can be controlled by a company to influence consumers to purchase its products.)
Content — Understand the function of the touch points (point of consumer engagement) on digital platforms to adjust content and concepts in order to enhance the consumer experience.
How can brands effectively use their slashed marketing budget?
Determine how much you're willing to spend on your marketing plans, what kind of budget you’re going to have: low, medium, etc. and have an effective accompanying strategy for each budget category.
Before setting your budget, however, access your business situation, look at your profit margin, try to get an insight into competitors’ spending, and decide on the spending ratio for different communication types.
Trong Nguyen, Creative Director at Dinosaur
What is the new reality like for the creative and advertising industry?
Before and after COVID-19, the core of the advertising industry has always been to find creative solutions to bring what consumers need, and thereby contribute to make their lives better.
However, in times of crisis like this, understanding what consumers really need and finding solutions to reach them most effectively is a challenge for both businesses and advertising agencies.
Is advertising still a top priority for businesses? How should agencies respond?
Advertising is still needed, because without advertising, brands cannot reach their target audiences. However, businesses and agencies must work together to deliver content under budget constraints, and find solutions that are both cost-effective and appealing to consumers.
What are some of the trends sweeping through the industry?
There are three aspects that media campaigns are giving special attention to:
- How to effectively measure media performance
- How to create messages that resonate with the audience
- How to make the transition from offline to online mediums
How can brands effectively use their slashed marketing budget?
Now more than ever, the campaign's performance is a top priority. Advertisers need to take into account how their campaign will be conducted, through which channels it will be communicated, what sort of audience it will reach to establish respective KPIs and ROI. Cutting your budget while setting a high ROI will not translate to effectiveness.