Market context
In many major markets around the world, particularly the U.S. and U.K., 2021 looks like it’s going to be a very different and very much more positive year than 2020. With vaccines effective against coronavirus now administered to around 40% of the population in both markets, the prospect of a return to something much more like normality is fast-becoming real. Data from Standard Media Index of media investment in the major English-speaking markets worldwide show that ad spend fell by 9% in the U.S. in the year to September 2020.[1] This year, more brands in more categories will run more campaigns in more media channels. This will bring 2021 ad spend close to 2019’s levels and real growth is projected in the years to follow.
Before the pandemic, brands often audited agency contract compliance two or three years after they’d made their marketing investment, very much a rearview mirror approach. In the past year – with campaigns paused, slashed, or cut entirely – many brands have taken the opportunity to play catch-up and get their contract compliance audits up-to-date, assessing agency performance much closer to spend. Audits are now much closer to becoming real-time or always-on. As investment ramps up in 2021, advertisers would be well-advised to hold their agency partners to account by maintaining this rhythm, with audits as close as possible to when investment is actually made.
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Looking out across the year as a whole, I think there are four areas where brands should focus.
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Review 2020 as soon as possible
For those brands yet to assess agency contract compliance for 2020, it’s our strong recommendation to review all marketing investment as soon as possible. Last year was very much business as abnormal. Categories including travel were shuttered and media channels, including out-of-home and cinema, were effectively mothballed. In the heat and panic of most offices moving to working from home overnight, carefully-crafted media plans were ripped up. So many changes were made to so much activity, but in the chaos few of these changes were validated or reflected in updated agency contracts. This is why it’s so important that brands review 2020 as soon as they can.
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Embrace the empathy dividend
During the chaos of the early months of 2020, many businesses found that their commercial partners were ready and willing to go the extra mile. For once, and unlike the financial crisis of 2007-2009, we truly were all in this together. Although there was little else that many of us could do but work, this was more than just work filling up available time. There was an explosion in empathy in corporate culture. We all found it easy to put ourselves in our customers shoes. There are few enough positives to come out of 2020, so the empathy dividend looks like an enduring positive well worth embracing.
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Work on sustaining relationships
Across the board, this explosion in empathy has made human-to-human relationships much more important. In the media and marketing world, this is most noticeable in advertisers’ relationships with agency partners. Thanks to working together in genuine collaboration so closely and so intensely over the course of the past 12 months, many of these relationships have evolved from the purely transactional into mutual, long-term partnerships. Advertisers should consider carefully how to capitalise further on the enhanced goodwill and spirit of partnership generated during the pandemic for how they work with agencies long-term.
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Strip out complexity
Covid has accelerated digital transformation for many businesses, and this is particularly true for ecommerce. Consumer uptake of online shopping accelerated by an estimated five years in just the first three months of the pandemic, right across the generations. With many consumers – particularly older demographics – reluctant to spend time in bricks-and-mortar retail any time soon, these changes look set to stay.
Ever-more digital media and marketing models are by their very nature more complex, involving many more links in the supply chain. Complexity always creates mistrust. For this reason, I’d encourage advertisers to aim for complete transparency – or at least strip out as much complexity as they can – in their dealings with multiple vendors, suppliers, and partners. Make sure you bake this into regularly-reviewed, binding contracts.
Summing up
As the world gently gets back on its axis, advertisers and their agency partners have the opportunity to hold onto the very real positives that have emerged from this most challenging of years. For contract compliance, this means “trust but verify” – and do so in a more straightforward, more human, and fundamentally empathetic way.
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