The COVID-19 pandemic has had an impact on many industries around the world, and the advertising ecosystem was no exception. We spoke with Nativex Managing Director Irene Yang to hear her take on the current situation, how brands and marketers are being impacted, and how they should adapt to this “new normal”.
Thanks for taking the time to speak with us, Irene. The COVID-19 pandemic is affecting advertisers across all regions and industries, so what are some of the changes that they need to make in order to navigate this difficult period?
It is indeed a difficult period and I think brands need to look at two aspects in particular. First of all, you have to get the right message across and this might mean pausing, restarting, or even rebuilding certain campaigns, as painful as that might sound. Secondly, spend some time identifying and targeting the right channels for your new message, so that you can optimize your costs when everyone is prone to budget cuts. In other words, understand your audience’s shifting needs and talk to them where they are.
With everyone basically stuck at home, that must mean user habits have changed, among other things. What are some key changes that you and your clients have noticed during this time?
Probably the most notable change is the surge in digital traffic. More people home translates to more people in front of one or more digital screens. The online gaming industry has seen a huge boost in revenue and stock value, as playing online games is something that even the World Health Organization is encouraging people to do in order to keep people home.
One thing our own data has shown with regards to performance advertising is that there hasn’t been a decrease in advertiser spending. In fact, from Nativex data we noticed an increase in ad spending and conversion rates as well for the month of February compared to January.
If we look at mobile games, in particular, we’ve seen downloads increase by over 60% during the COVID-19 lockdown in China and these trends are slowly being replicated in countries around the world. It’s not just games though, but we’ve seen an increased appetite for online content in general, as downloads for social media and streaming apps surged as well.
Another thing to note is that this is a stressful time for everyone. The stress brought on by this sense of uncertainty makes us seek stress relief, which explains why apps with social elements are seeing such impressive growth. This is why entertaining or relaxing advertising experiences can do surprisingly well, both from a conversion perspective and from a user experience point of view.
Since more people are home now, how can brands and advertisers tackle this user behavior change without looking like they are trying to capitalize on this situation?
It’s important for advertisers to be more flexible and more agile these days in order to adapt to such a quick and abrupt shift in user behavior. High-level plans and roadmaps created a few months ago will most likely not work anymore, so the fastest ones to adapt will win the race for attention.
Looking at China’s App Store downloads, for example, the most downloaded games during the lockdown were Brain Out and Honor of Kings, both free games with in-app purchases (IAPs). Data showed us that more users spent money on IAPs during the lockdown and Chinese publishers were quick to react to this change in traffic by incorporate IAPs into their titles as well. Brands and advertisers need to pay attention to these behavioral shifts and change their offers and messaging accordingly.
So more people are online longer and more frequently these days. Does having a bigger audience translate to increased campaign ROI?
We have seen media consumption growing significantly in these past few months, but unfortunately, this does not translate to a proportional increase in terms of paying users. While I believe this surge in traffic is definitely positive, it’s important to pay attention to not just the volume, but the quality as well.
One interesting thing we have noticed though is that video ads tend to perform better in this period, so advertisers should look towards prioritizing campaigns that use these formats or tweak their existing campaigns accordingly.
Let’s talk about the big question everyone is asking these days: should brands stop their advertising campaigns because of the COVID-19 pandemic?
While I understand the concern many brands have of looking like they are trying to capitalize on this crisis, I don’t think silence is the answer here. We’ve seen major brands replace certain campaigns that looked like they went against required health & social distancing norms, like KFC suspending their “Finger lickin’ good” campaign. The fear of seeming tone deaf has certainly scared many brands into radio silence, but instead, I would say they should simply spend wisely and focus on ROI optimization.
We have worked with our partners during these past few months on providing them with customized strategies on how to best utilize a mix of right channels and the right messaging, to tackle this concern in particular. We also used our insights to pair brands and products with the right content type so that brands are viewed positively and user experience is not affected.
The impact of this pandemic is also felt in the way people interact with brands. Besides a change in messaging, what other changes do you think brands need to make to reach their audiences?
Users right now expect brands to be sensible in their approach and this is completely fair. From an operational perspective, we’ve seen how video ads generate conversion rates, so this format should be a top choice for advertisers trying to stand out.
However, it’s not just a format change that will win the race for attention. Another key focus needs to be on the ad creatives themselves and I’m proud to work with some of the most talented and creative individuals in the industry. Users have shown they want their advertising experiences to be entertaining. Advertisers with campaigns that a)contain video ads and b)have entertaining creatives can satisfy these user needs and I think that Nativex can deliver on both of these fronts.
Let’s look at this situation from a “social good” perspective. What can brands do to help their users and communities during this time of crisis?
It is truly amazing to see how many companies are doing what they can to to help their users, their partners, and their communities in this time of need. I think this is truly a time where messaging is extremely important, so brands should try to convey a message of hope, togetherness, and gratitude to their users.
We have seen some great examples of global brands promoting ways to support those around them. At the same time, messaging needs to be localized, as certain regions have been affected more heavily than others, impacting user behavior in different ways.
I am also extremely proud of our Nativex Cares campaign. We reached out to our partners around the world and offered free masks for their staff in order to help them deal with this uncommon situation. I was particularly amazed by the positive responses we received and if we managed to make even a small contribution to our partners’ wellbeing, then I consider it a job well done.
Nativex has offices all over the world, and some of its offices are in WFH mode while some are back to normal. How are you dealing with this mix of workflows?
At Nativex, we were lucky enough to be able to quickly switch to a WFH mode without affecting our partners’ advertising campaigns. By providing them with customized insights to get a better understanding of the right products and channels to use, and custom API reporting functionality, we ensured parity between the Nativex offices and our partners around the world.
Dealing with different workflows and processes as a result of this change in working environments is something I took as a learning experience, as it helped me better see and appreciate the pros and cons of working from home or the office. I think the main reason I have adapted so quickly to this new way of working is that I have been fortunate enough to work with people who share their passion of doing things right, no matter the circumstances. Whatever life throws at us, it’s important that we keep going.
Irene is the Managing Director of Nativex and she has been instrumental in establishing and strengthening the company’s expansion in 8 key markets around the world. Since joining the company in 2014 as a Business Development Manager, Irene became the Regional Manager for the Asia & Europe markets in 2018 and has been a key performance driver in these regions.