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%) of UK marketers lost revenue compared to 2019.
Key findings
- Despite big declines in revenue suffering across the board globally, UK retail marketers have come out the least scathed from the Covid-19 pandemic compared to most other countries including the Spain, France and the US
- Most marketers (76%) have said marketing has become even more important during the pandemic
- Digital marketing spend has naturally rocketed – with investment in social media and retail website/apps with the biggest increases
- A third of UK marketers cite an over dependence on the walled gardens on Facebook, Google and Amazon
However, although there were no real winners in the retail sector, the UK emerged among the most healthy with only 10% of marketers seeing a ‘big decline’ in revenues due to Covid-19, compared to 25% for Spain, 22% for the U.S. and 21% for France. Only Germany fared better, with just 8% reporting a ‘big decline’ in revenues.
What’s more, the economic turmoil of last year prompted 76% 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%) but also due to the increased digital marketing activities (59%) 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 in digital tactics. In fact, 71% 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%), closely followed by retail websites/apps (62%). 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%) say performance marketing channels will attract more advertising spend in their organisation this year, with website sales (46%) and average customer spend (45%) ranked as the top metrics influencing marketers’ plans.
However, one pain point for nearly a third (30%) 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.”
Methodology
A total of 1,039 marketing executives were surveyed across ten different regions (U.S., UK, France, Germany, Spain, Italy, Australia, Japan, South Korea and India) in October 2020. Each market had at least 100 respondents. The survey respondents were from a mixture of industries: retail, brand, marketing/advertising agency, IT & telecoms, fintech/financial services, travel and automotive. The research was carried out by Criteo in partnership with Dynata.