Analytics can help drive and maintain sales during and after the pandemic.
by MATT VODA, CEO, OptiMine Software
As a marketer and partner with companies in a litany of different industries, I observed one inarguable effect of the coronavirus: The implications were polarizing.
There were companies, such as those in the travel and hospitality industries, that had their ways of doing business completely shut down. Those in the beauty and retail industries were also bludgeoned by the effects of the pandemic, which rendered doing business nearly impossible.
But just as the North Pole has the South Pole, there were coronavirus counterparts on the other side of the spectrum: Connected technology, streaming television, and e-commerce platforms all saw the pandemic create widespread demand — effectively expanding their growth to unpredicted heights. The toy industry, too, was among those that saw increased sales as a result of the extra time consumers found due to stay-at-home orders.
For marketers in the toy industry, this caused problems. Of course, it’s important to emphasize that increased sales is the “good” kind of problem. And certainly, in the scheme of all that’s gone on in the world, we’ve learned to redefine problems. These brands saw a massive spike in demand, but that demand also created supply chain issues. The demand outpaced inventory, and as a result, marketers were challenged to shift priorities and spend toward channels that boasted certain standout features, namely the ability to quickly turn spend on and off.
That made marketing channels such as TV, radio, and print ads — mediums that require longer lead times — less advantageous. Digital advertising, on the other hand, allows for more flexibility and some channels, such as paid search, appear to be more easily measurable. The conundrum for marketers looking to measure some digital channels, such as video, paid and earned social, and display, is that the tale isn’t told with clicks. Because few consumers click on ads in these channels, it is difficult for a brand to understand their contribution to sales.
But this is precisely what’s necessary for toy companies to succeed, and the companies that leveraged advanced analytics well have been best able to navigate the pandemic.
The pandemic caused mass shifts in consumer behavior — not only what they were buying, but also how people were engaging with media. Agile brands that used advanced analytics to quickly understand these shifts were able to tailor their marketing strategies more efficiently, thereby improving sales in a more cost-effective manner.
Assuming consumer behaviors will change and that the post-pandemic economy is as unpredictable as the pandemic itself, marketers in the toy industry will need to continue employing the same agile marketing and analytics techniques the industry’s stalwarts did through the pandemic.
Brands that can make faster reads of marketing performance based on the latest consumer behaviors, geographic differences, and cross-channel marketing effects will outperform the brands who are operating more blindly.
At OptiMine, we work with a toy brand whose analytics unveiled the positive effect digital video and paid social campaigns were having on both direct-to-consumer business and Amazon sales. Previously based on consumer click activity, the brand was not able to prove that these “upper funnel” channels drove real ROI, and the economics of these investments looked terrible.
Only with advanced analytics was the brand able to attribute the real value of these investments to revenue and this knowledge provided guidance to adjust their budget accordingly.
Just the same, analytics are not only useful in determining the platforms, mediums, and tactics that provide the largest return on investment, but also critical in determining geographical differences in performance.
As the country eases its way out of the pandemic, different regions will rebound at different rates. For brick-and-mortar retail, different regulations will be in place regarding the number of people allowed in a store at a given time. These geographical disparities will have a meaningful impact on the lift brands get from ads targeted in various locations. It’s likely that, all things being equal, the same ad will perform better in a region where brick-and-mortar retail has fewer restrictions. That kind of information will allow marketers to shift their spend to the most profitable geographies while the pandemic restrictions remain varied.
It’s a cliche, but all too apropos in championing the benefit of marketing analytics: Knowledge is power. Being armed with data that shows the effectiveness of various ads and ad campaigns on the most granular of levels will guarantee that toy brands navigate the very choppy pandemic waters and enjoy maximum lift from their marketing spend.
This article was originally published in the July/August 2020 edition of the Toy Book. Click here to read the full issue!