A surge in energy and food prices across the planet is causing widespread issues with our everyday cost of living. In the UK, inflation is at its highest since the early 1980s, and a recent survey by PWC revealed that a striking 86% of people are concerned about day-to-day living costs. More than half (54%) answered they are very concerned, and they’re not the only ones, as similar trends are being felt across the European continent. In the United States, consumer confidence slipped to a four month low in November, with Reuters reporting that households are generally "less keen to spend on big-ticket items over the next six months amid high inflation and rising borrowing costs, heightening the risks of a recession next year".
This is bad news for many brands, but also an opportunity for agencies to help guide their clients through tough times in the most business-sense way. To find out more about how agencies are doing that - specifically in terms of using data as a reliable guide through murky water - LBB’s Addison Capper spoke with experts from Grey, M&C Saatchi, TrackDDB, MullenLowe Profero, Wunderman Thompson Data, VaynerX, and BBDO New York.
Chief data officer at Grey New York
When consumer spending decreases, it’s important for brands to find ways to engage with their audiences in a meaningful way; be part of a conversation that matters to them, engage in culture, and satisfy their evolving expectations of the brand. At Grey, we believe the key to achieving this is to start with data. It is more important than ever for a brand manager or strategist to not assume they inherently know their target audience, but to instead understand them through a mix of syndicated data, survey data, and social listening. Additionally, understand the cultural narrative surrounding the brand and analyse what trends are resonating with the target audience. When these data points come together, we are better equipped to identify what matters to our target audience and the cultural value of the brand. In challenging economic times, the value of a brand may be in providing a moment of levity or in providing a permissive moment to splurge on a superior product, but one thing is certain - in today’s on-demand economy, meaningful value from a brand is not just in the exchange of goods or services for money, it’s in the cultural value that a brand holds.
Managing director at Wunderman Thompson Data EMEA
There’s a wealth of data out there on the current cost of living crisis; the challenge for agencies is to not drown in it. This can be navigated by first understanding what decisions we’re trying to make: where to invest, who to target, what channels to prioritise, how propositions and pricing should adapt – then seek the specific data that best informs.
The data tells us that the cost of living crisis has different impacts by market, audience, and industry sector, whether you’re luxury or budget – it’s nuanced, and so it pays off to study this at various levels of fidelity and not just rely on macro trends.
There’s reams of market data, but perhaps less insight on how consumers are talking about this and how they feel. We recently ran a study across the UK to understand what the nation is talking about and how the conversations make them feel. Cost of living was the number one topic, yet one that brought about strong levels of anxiety, worry and anger. Conversely other topics, such as entertainment, sport and brands themselves, are talked about with much more positivity. So this data led us to consider more deeply the role brands can play in these challenging times – they can authentically offer people help and hope to support them through the harsh realities, or offer escapism, a positive distraction to make them a bit happier. Our recent work for HSBC, ‘Vicious Circle’, shows how brands can genuinely show up in a meaningful way.
SVP, Head of analytics at TrackDDB
As consumers feel the pressure of increasing prices, brands need to find better, more relevant ways of communicating and engaging with them. Our brands are asking for new ways to dig into the data to help them understand which parts of the journey they can add value back to the consumer. Organisations need to be sensitive to how they engage right now, as personalisation is becoming a critical factor in ensuring you are not only understanding the differing needs of your customer but are then tailoring your communications in a way that is right for them. Some ways our brands are showing up in these challenging times is by crafting content to current needs, focusing on product and service value, creating unique and innovative ways to test flexible payment options where viable, and most important is being open and empathic in your messaging to gain trust. Using data-driven insights for where they can address these difficulties in an individual customer journey gives brands opportunities to build a better relationship that can lead to longer lasting customers for higher long-term sales and increased retention.
Mike Spencer and James Calvert
Chief operating officer at M&C Saatchi Fluency and chief data strategy officer at M&C Saatchi London
As the cost-of-living crisis takes hold, data can delight, inspire, and empower brands to make the right actions in a world of constant change.
The signs are everywhere. Skyrocketing costs are hitting finances hard. The heating is off. We’re eating less. Doing without. Favouring own brands. Cutting back on luxuries. Staying in. Selling on eBay. And taking second jobs.
What brands do during this crisis is a huge question, isn’t it?
For brands who need a rapid read on how spend across their market is shifting and to find creative opportunities in challenging times, the ‘Cost-of-living Navigator’ is a unique approach to data insight from the team at Fluency and M&C Saatchi London.
By blending our proprietary survey data on behavioural intent with permissioned transaction data, brands can see when and where spend is going, along with a deep understanding of the tensions fuelling changes in attitude, to unlock new opportunities for brands to adjust pricing, add campaign promotions or try new brand initiatives as the crisis unfolds.
Group director of marketing science at BBDO NY
As we have the difficult conversations with our clients, we focus on future-proofing their business instead of relying too heavily on the skewed data from the last (approximately) three years. There is a lot we can learn from that, but it’s also difficult to track patterns due to covid-19 spending.
A lot of agencies are only able to focus on one of two things when they understand their consumer: 1) how people have behaved in the past? or 2) What they think/feel they might do in the future. Using Omni, Omnicom’s proprietary data platform, we can bridge the gap between how consumers have behaved in the past AND how they're feeling about the future, so we can help our clients understand if their best customer in 2021 is planning on cutting down their spending in 2023, and what to do about it.
Head of data at MullenLowe Profero
In today’s unprecedented times, as customers’ buying habits are rapidly changing, we need to rethink how we change our strategies to better connect with our customers in ways that are not just personalised and sales driving, but genuinely help them make better choices.
To this end, we should be reaching deeper into our clients’ first party data and harnessing the rich, often untapped behavioural and attitudinal insights to truly understand individuals’ unique and potentially challenging circumstances. We should be looking beyond what they buy, by getting closer to their digital footprint: their personal profile, their patterns of spend, the type of content they engage with, their relationship between paid and owned media, and importantly, how all this is continuously changing for each customer.
And by working as closely as ever with our creative teams, we need to translate all this into content that is both meaningful and connected across the customer journey.
And finally, to help achieve this we should harness relevant tech including ‘Dynamic Content Optimisation’ and ‘Band Language Optimisation’ to dynamically adjust design and copy to reflect customers’ continuously changing personal interests, sensitivities and channel preferences.
Chief analytics officer at VaynerX
At its core, an agency is an ecosystem of resources (people, time, creative assets, etc.), and resources are limited. Data is a natural driver for resource allocation, which is the process of assigning and managing assets in a manner that supports an organisation’s strategic planning goals. With that context, agencies need to look at data captured in their business development, project management, and creative products to better allocate resources.
At VaynerMedia, we look at the cost and time needed in the production of creative assets and found that in some instances, there is time invested in underperforming creative. Using brand-specific scoring techniques, we are helping creative and strategy teams shift their time to stronger performing assets. For example, a post creative strategist is now able to reallocate about 20 hours of their weekly time, as they are not asked to evaluate low performing content. This allows for a more valuable investment in time and resources.
In addition, we find that social listening is a key tool for gaining consumer insight. Thus, we leverage the data gleaned to understand how the shifts in local economies translate to cultural signals, which then informs the content that is developed.