The majority of marketers suffered lost revenue due to Covid-19 last year, but the UK was one of the least impacted countries in terms of ‘big declines’ in revenue, according to a new study by Criteo, the advertising platform for trusted and impactful advertising.
The State of Digital Advertising report – which surveyed over 1,000 senior marketing executives for brands and retailers across ten regional markets globally – found that the sector was heavily impacted by the pandemic, as nearly two thirds (65 per cent) of UK marketers lost revenue compared to 2019.
However, although there were no real winners in the retail sector, the UK emerged among the most healthy with only 10 per cent of marketers seeing a ‘big decline’ in revenues due to Covid-19, compared to 25 per cent for Spain, 22 per cent for the U.S. and 21 per cent for France. Only Germany fared better, with just 8 per cent reporting a ‘big decline’ in revenues.
What’s more, the economic turmoil of last year prompted 76 per cent of those surveyed to say that the marketing function has increased in importance during the pandemic, as marketers look to keep their organisations on their feet as purse strings are tightened. And the biggest reason for the increased significance is acquiring new customers (61 per cent) but also due to the increased digital marketing activities (59 per cent) for brands and retailers.
With increased pressure to keep their organisation on track, marketers have looked to modernise their outreach strategies, marking a dramatic turn from traditional investments areas and pouring resource into digital tactics. In fact, 71 per cent of marketers reported that the share of digital marketing spend has increased across all channels and will continue this year.
In a world of lockdowns and home working, we have become a near exclusively digital society – and social media has been the top beneficiary, posting the biggest increase in marketing spend in the last six months in the UK (68 per cent), closely followed by retail websites/apps (62 per cent). Unsurprisingly, the latter showed a significant rise in and reliance on retail media; with revenues under greater scrutiny, spending was directed to areas where the business could genuinely prove a return on investment.
Most importantly, it’s working. The increase in investment on retail websites and apps has really helped, with one-in-three marketers in the UK saying Covid-19 has led to an increase in website sales and rapid digital transformation of business processes. Furthermore, over three quarters (77 per cent) say performance marketing channels will attract more advertising spend in their organisation this year, with website sales (46 per cent) and average customer spend (45 per cent) ranked as the top metrics influencing marketers’ plans.
However, one pain point for nearly a third (30 per cent) of UK marketers has been an over dependence on Facebook, Google and Amazon, which underlines the appetite for powerful marketing solutions beyond walled gardens.
“Covid-19 has clearly impacted the channels in which marketers are spending their money, as consumer behaviour shifts to an almost exclusively online model in the UK right now,” said Marc Ó Fathaigh, UK country manager at Criteo.
“No company, in any region, is unaffected. But it is encouraging to see that despite dips in revenue, the share of marketing spend online is set to soar this year – an unusual statistic historically in the context of a global economic recession – as companies refocus their strategies digitally to invest in channels that present a clear return on investment. As brand advertising becomes increasingly easier to measure online, we expect marketers to pursue this digital line of enquiry much more vigorously in the face of shrinking revenues and look for solutions that reach the right audiences and the right time.”
Share