Here we go with another Weekly Wrap for the week of May 4, 2020. From innovative ways to jump into a new vertical during a pandemic to millennial consumer insights, grab some coffee, and absorb the marketing insights and news from this past week.
Allbirds Moves into Performance Footwear during Crisis (Footwearnews)
The release of Dasher running show marks Allbirds’ first dive into the performance footwear arena. While this is technically news from last week, it’s important to highlight as it showcases how even in the face of a pandemic, for some brands, there are opportunities.
- Allbirds are known for their sustainably made shoes and the Dasher is not an exception. It’s made from eucalyptus, sugarcane, and merino wool.
- To promote the Dasher, Allbirds is hosting a 5K run challenge from May 7 to 14 in which the brand will donate $1 to World Central Kitchen for every run logged, with a goal of raising $50,000.
COVID-19 is proving to be a double-edged sword for Roku. Despite increasing users and hour streamed on its platform, Roku has seen declining ad spend and revenue as a result of the pandemic.
- + 80% streaming hours YOY from mid-March to late April. Now 13.2 billion hours.
- + 38% active accounts; + 70% new accounts in April alone
- Roku is betting that linear-TV will continue its decline and there’s data to support it. YOY linear-TV viewing was down 18% YOY from mid-March to late April.
- “We plan to continue to participate in the upfront process and be aggressive there,” Rosenberg said. “But the shift during COVID speaks to how important it is to move money and reach people [marketers] can’t reach in linear TV.” – Scott Rosenberg, SVP and GM of Roku’s platform business
Amazon plans to ramp up its OTT advertising business; Spotify only slightly revises 2020 revenue.
- Amazon hired the former EVP of Video research and Insights at Dentsu Aegis Network, Maggie Zhang. She will develop reach and measurement products for Prime Video advertisers.
- Spotify’s ad revenue fell short of ad revenue growth for Q1 (+17% YOY) due to COVID-19. However, daily active users increased by 31% to 286 million users while increasing overall revenue by 22% to hit $2 billion. As such, they’ve only slightly lowered their 2020 outlook.
Millennials increasingly desire safety, serenity, thrift, and relaxation.
- The COVID-19 pandemic is only increasing millennials’ desire for stability in all of its senses (pictured above).
- Gartner’s most recent consumer survey about COVID-19 showcased how Millennials are largely concerned about the pandemic’s effect on the economy and are “highly” or “extremely” concerned about the crisis in general.
- When compared to other generations, Millennials are more likely to live paycheck-paycheck (62% vs. 46%) and are more likely to say that they are constantly worried about having enough money (74% vs. 63%).
- The author, Tim Barlow, argues that brands that are “hoping to stay connected and engaged with Millennials will need to double-down on efforts to layer their products, services and messaging with elements of security and peace of mind.”
- Investment firm Ellevest is an example of a brand that is adjusting its strategy to be aligned appropriately. Their website offers a variety of free resources ranging from advice on 401(k) plans to how people should respond to being laid-off as a result of the pandemic.
Retailers are relatively optimistic about the timeline for continuing regular shopping activity and consumers will support brick & mortar locations once it’s safe to do so.
- According to March 2020 data from Forrester and Narvar, 58% of retailers believed shopping activity will return to normal from three months – over one year. 40% said it will resume within one to three months.
- 16.7% of US consumers have said that they will shop more often at physical stores once the pandemic is solved. 62.5% said that they will shop at physical stores at the same frequency as before.
Allbirds seems to be attempting to capitalize on the growing workout from home trend that’s been catalyzed by the pandemic. While being a performance designed shoe, the aesthetic and comfort retains its casual everyday sneaker appearance and feel. As such, this could make the shoe a viable purchase for consumers under lockdown who see the combination of utility and appearance as a 2 for 1 deal. Moreover, their social-cause event not only promotes the new release but plays into consumers’ desire to see brands contributing to the common good during a crisis. This is a very good lesson for D2C brands to take note of.
While the opportunity for marketers to leverage CTV seems to be expanding due to increasing an increasing user base, ad spend has slowed or not been as high as expected. This could be due to a number of factors. To name a few: fear over consumer confidence and spending; supply-chain issues and fear of not being able to fulfill any incremental demand; a lack of resources to be allocated towards a channel that doesn’t ‘directly’ show ROI; a lack of creative (which is most likely to be the case for smaller brands). However, CTV is still looking to be the ‘future’ with talent moves such as Amazon hiring a former Dentsu OTT exec.
The Gartner research findings illustrate that more established brands might be in a better position than lesser-known ones right now due to the decreased desire to discover new ideas, experiences, etc. This may come as a shock since millennials are often stereotyped as being the generation of people who value experiences over anything. While this may have some truth, the desire for security is outweighing that right now. However, that is not entirely bad news for lesser-known brands. If they can find a way to price their products effectively without creating a sense of urgency (millennials are already stressed out, don’t make them more so), then they have an opportunity to challenge competitor brands that may already have the millennial consumer’s attention.
Insights from the Frontline (from client campaigns)
⬆️ Display ad spend is slowly starting to increase as supply-chains free up
✅ CPMs on the Open Web and on social still remain relatively low
✅ Athlesiure brands are really starting to see the benefit of catering to WFH professionals (comfy clothing, hats for Zoom calls etc) with increased sales.
✅ CTV is expensive, yes, but with the market not becoming too saturated yet, it’s not a bad time to test.
✅ The Gartner report on millennials showcases that brand awareness pays-off when consumers start to feel more of a need for security. If you launch at a minimum a small branding campaign right now you could see residual benefits when the next crisis occurs.
✅ Start looking to diversify your marketing channels as things begin to open up again. Competition for ad space will occur once things are back to normal.
And that’s a wrap for this week!
Please send us an email if you have any questions or want to suggest a topic.
See you next week! Stay healthy and stay strong.