thought leadership

Second Wave Scenarios

Despite the uncertainty of the times, more commentators seem to be predicting the future than ever before. Inspired by a recent piece by Steven Weber from Breakwater Strategy, we considered its application to media and advertising. Although this report is divided into four neat quarters, we still found that potential outcomes remained ambiguous and there was a theme of dissonance emerging.

The four scenarios that are considered in this report are the result of two determining factors:

  1. The level of COVID incidence
  2. The constraints imposed on the economy

SCENARIO ONE: BEST CASE AND FULL RETURN TO NORMAL

We are able to successfully re-open the economy whilst maintaining measures like social distancing which keep repeated outbreaks in check. People start to confidently return to jobs and to return to consumption.

Consumer behaviours:

Celebration V caution: Families and friends are reunited and there are celebrations across the country, but the continued risk to the vulnerable leaves some unable to join in.

Spend V recover: The pent-up demand amongst those financially unaffected injects a spending surge into the struggling sectors. Those impacted by job losses and businesses folding begin the road to recovery in a normal economy.

In person V online: The excitement of human contact induces a large-scale return to work, but newly built WFH habits are maintained in a new blend working jointly at home and the office.

Figures to Consider: £57 billion of unspent money vs 600,000 jobs lost in lockdown

Brand behaviours:

Old approaches V new tricks: Brands will be able to return to their old ways, but will also be able to carry their new learnings with them to drive further growth.

Celebrate V stimulate: Some sectors will help people to celebrate the return to normality, others will be able to help stimulate the country’s economic recovery.

New entrepreneurs V established brands: New businesses grow from difficult places; we expect a surge in enterprises challenging the status quo.

Figures to Consider: Ecommerce grew 30% vs 90% of grocery still delivered through physical stores

Media behaviours:

OOH V in home: OOH exposure will spike as people are allowed to move around more. However, higher WFH rates mean that home media consumption will be higher than before. Cinemas will reopen for those who aren’t vulnerable. TVR levels will recalibrate and digital adoption habits are here to stay, although at a lower rate than during lockdown.

Same V different: While many media consumption patterns will return to how they were before, digital communication and consumption habits developed during lockdown are now more embedded in society and across age groups.

Content V experience: Pent-up activity in lockdown has created a surge in new content. As lockdown is eased, real life experiences will be favoured over screen consumption.

(Sources: Reach Solutions: The Aspiration Window 2020)

Questions to ask:

  1. How can we be mindful of both celebratory and cautious mindsets?
  2. What new methods of business delivery should be maintained or dropped?
  3. How can we defend existing business models amidst a surge in innovators?
  4. What does our approach to digital inclusion look like in the new landscape?
  5. Are our old media planning principles still solid?

SCENARIO TWO: REGIONAL SECOND (AND THIRD) WAVES

The UK bravely returns to work and consumption. COVID-19 is accepted as part of life and elevated death rates are accepted as the new reality. The infection rate may spike again in regions at different times and lockdown might return and be turned on and off like a tap in different regions as the R number changes.

Consumer behaviours:

Open V closed (regions): Certain regional groups are disproportionately impacted as they return to locked down within preventative ‘COVID bubbles.’

Freedom V fear: The trade off between FOGO and BOSH (fear of going out and bored of staying home) will remain. For those more vulnerable, fear will remain. For example, 57% of people are uncomfortable returning to restaurants. Others can’t wait to embrace their new found freedom.

Some things V all things: We will see a 90% economy with different sectors faring differently to before. Travel and leisure will still be down but less impacted, grocery still up but less high than before and luxury improving. Online retail has reached a record high share of 30.7%, but there’s a 50% fall in clothing sales.

Figures to Consider: 60% of the North East are unemployed or furloughed vs 28% in London

Brand behaviours:

Stimulations V sensitivity: Finding a balance between messaging that celebrates return to normality and being sensitive and agile to the different mindsets to coming out of lockdown.

Regional V national: What works on a national level and what needs to be more regionally specific and agile.

Omnichannel V single channel: While regions that are open for business are suitable for an omnichannel approach, regions that are closed require a digital route to market.

Figures to Consider: Cases per 100,000 population vary massively, from 0.7% in Torbay vs 42.4% in Oldham

Media behaviours:

Firm V flex: Important to combine media that is firm and can run no matter what and media that needs to be flexed and agile, so can move according to the most current situations.

Together V apart: There will be a return to collective media consumption (e.g. cinema) but for those in still impacted regions, solo media consumption from home will remain king.

Collaboration V going it solo: There will be an initial desire for new content. Producers and broadcasters will be looking for brands to help quickly.

Figures to Consider: 5.9 billion more minutes spent on online entertainment

Questions to ask:

  1. How can we stimulate demand for our category and/or signal reassurance if appropriate?
  2. How can we create regional flexibility / agility to media plans?
  3. How can we ensure that our messaging understands the differences in regional, demographic and ethnic experiences of COVID-19?
  4. How can we create omni-channel presence and plan for the long-term where digital commerce will be key?
  5. Is there an opportunity to partner up to help ill the content void?

SCENARIO THREE: COVID IS BEATEN BUT DEEP RECESSION

Covid death toll has fallen short of estimates but we are mired in recession. The virus has been contained but it has come at the cost of national prosperity. Strict social distancing and lockdown measures have kept it in check but the health for wealth bargain is causing fractures in society and politics. While this is unlikely, if we see changes in the R number, it could happen.

Consumer behaviours:

Compliance V rebellion: A disparity in age of those who comply. Older people are constrained by fear while younger people look for ways to reclaim their right to youth.

Haves V have nots: The gap continues to widen between these two groups. As those who are still working are able to save (average household savings are £300), those who can’t are faced to rely on savings and possibly move onto state benefits.

Demand V supply: As economic nervousness continues, Britons continue to hold off on making major purchases. This creates a void of demand at the top end of the market. Savvy shopping becomes the norm and there is an increase in discounter shopping.

Figures to Consider: 62% of 18-24 year olds have strictly followed the lockdown restriction, vs 91% of 65+

(Source: Opinium May 2020)

Brand behaviours:

Innovate V capitulate: Some brands will be able to innovate to maintain output levels close to those before the pandemic. Brands in heavily restrained sectors may find themselves going out of business.

Everything V local loyalty: ecommerce achieves further gains, and brands will increasingly adapt to rely on it in order to survive. People may increasingly move away from national and global sources in order to support local businesses as the physical high street remains shut.

Support V success: Brands must move more definitively towards purpose to support Britain through the recession rather than being seen to be profiting off a time of national uncertainty.

Figures to Consider: 50,000 new eBay stores have opened since February

Media behaviours:

Survivors V victims: TV market will be dominated by brand unaffected by lockdown. OOH will be hyperlocal only. Cinema advertising capitulates as audiences are forced to stay away too long.

Escape V Tune in: Digital, radio and TV will continue to be essential in providing an escape and also updates on changes in prospects.

Immersion V detox: While the prolonged misery will cause a predictable spike in media consumption, there will also be a counter-trend of digital detoxing in exchange for wholesome in-home activities away from the screen.

Figures to Consider: Streaming services received 4.6 million new subscribers during UK lockdown

Questions to ask:

  1. What brand innovations should be maintained or adopted in the case of a prolonged lockdown?
  2. Is your brand proposition right for the haves and have nots to avoid discounters from stealing your share?
  3. How could your brand be seen to help recovery beyond its own success?
  4. How might your brand adapt to long-term changes in media consumption?
  5. What’s the best way to balance brand desirability with a lack of demand

SCENARIO FOUR: SECOND NATIONAL WAVE

The second wave will hit as virus hotspots occur when people return to work and the economy reopens. There is a general perception that we are at war and that, with no vaccine in sight, the virus is winning. People start to bunker down in an apocalyptic ‘will this ever end?’ mentality.

Consumer behaviours:

Optimism V pessimism: a disparity between those with a war-time, bunker-down mentality and those who are more optimistic, having already been through one wave.

Online V local: The dichotomy of our world simultaneously getting smaller and bigger. While our physical world will again get smaller, our digital worlds are widening as we turn again to virtual communities, hang-outs and events. We now spend 37 mins more online each day than we did in January; a total of 4 hours and 2 mins daily.

Panic buying V constrained spending: An initial flood of panic buying and stockpiling will be followed by a longer period in which we once again supress spend as finances are curtailed. Major purchases will be put off and we will cut certain spend categories from our behaviour again. During lockdown, 80% of people deferred major purchases, and we supressed some £57 million of spending.

Figures to Consider: 42% of British businesses think that the worst is yet to come vs 58% who say they think that things will be back to normal by Christmas

Brand behaviours:

Spend V save: It will be difficult to choose between spending if demand is still there, versus saving I demand is curtailed or your usual routes to market are closed.

Lean in V sit back: With new awareness of consumers’ expectancy that brands will help, do you lean in or do you sit back, aware of sensitivity and authentic brand roles in the crisis?

Innovation V determination: Those who innovate first and fast will make more impact. Some brands will stick to what they know and hold fast throughout the crisis.

Figures to Consider: 70% of people want to continue to hear from brands vs predicted -17% drop in ad spend over 2020.

Media behaviours:

Winners V losers: Consumption at home will spike again. TV, AV and digital will again see elevated consumption levels. OOH will again become more local and cinemas will have to close their doors again.

Solo V group: solo consumption will rise again as people seek out me-time. However, we will also want to connect with groups via virtual events and connections.

Old V new: As no new content is created, an entertainment gap will open up, even though there is still demand. There will be a return to the archives, and low-fi content options will again become more normal.

Figures to Consider: 44% increase in viewing VOD, 13% increase in TV viewing, 50 million extra Houseparty downloads between March – April

(Source: Facebook, Google, Touchpoints, IPSOS)

Questions to ask:

  1. How can we contribute to people’s lives in a real, meaningful way?
  2. How can we innovate to create new routes to market if the traditional ones are closed?
  3. How can we be agile?
  4. How can we take advantage of mass reach in home media to deliver saliency
  5. How can we help fill the entertainment gap?

Access the full report here.

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