For marketers, Brexit is already here by Bryan Melmed
Many advertisers overlook the impact of uncertainty on their customers.
Bureaucrats in London and Brussels will struggle to negotiate Article 50 for months to come, but for marketers Brexit is already here.
Few events in recent history have changed consumer perception as dramatically as the vote on 23 June. With no assurance of what will happen, the most pervasive effect is heightened anxiety about what might happen. This has already triggered a familiar pattern in various economic indicators, especially in a weak exchange rate and plummeting confidence indicators. Still, many advertisers overlook the impact of uncertainty in the minds of their customers.
It’s not as if Britons have stopped leasing cars, planning vacations and buying smartphones. It’s that they are doing so with different emotions and priorities that marketers must adapt to. Pervasive anxiety will impact almost every perception and decision a person makes.
We see abundant evidence of consumer anxiety in Britain through behavioural data collected through our publisher network. At the risk of sounding dismissive, we’ve seen this happen before. There was anxiety in Edmonton during the Fort McMurray fire. There was anxiety in South Africa when the respected minister of finance was suddenly dismissed. And in Miami, we see evidence of anxiety now that the Zika virus has made it to the mainland US.
Fortunately, our data also helps inform a strategy for how advertisers can respond to an uncertain time. Brexit feels unprecedented and overwhelming, but a few simple guidelines derived from previous crises can guide the way forward.
It is more difficult for your message to break through during a period of anxiety, but not for the reason you might think.
Marketers often imagine that their messages are somehow “crowded out” by the avalanche of news and opinion that follows an unexpected event. If anything, the media environment is more favourable to marketers now that the initial shock has worn off. Demand for content remains high while some advertisers pull back, making for real bargains when it comes to placement.
The reason that it is more difficult to break through lies with consumers themselves. In a time of anxiety, people embrace routine and tune out distractions, including most advertising. This is a defensive mechanism baked into our biology – even rats default to established habits when under stress.
Narrowed perception is clearly evident in our study on British consumers after Brexit. They exhibit 39.2% less interest in trying new bars and restaurants. They are 22.9% less likely to plan a wedding. They are even 18.5% less likely to explore divorce. (This may sound awful, but it’s the same concept as Maslow’s hierarchy of needs.)
These reactions have a significant economic component as well, which helps explain their magnitude. Other responses we observed seem entirely influenced by heightened anxiety. In the month following the vote, Britons became 36.2% less likely to be interested in new music. They were 19% less interested in losing weight and 14.9% less interested in dating. We also see consumers increasingly tuning out decisions that could save them money, such as changing cell phone plans or finding a low interest rate credit card.
Smart marketers employ a strategy to accommodate this response, rather than desperately try to override it with larger and more intrusive advertising. Britons are still doing what they did before, but with a much narrower focus. In this environment, advertisers need a precise alignment of the timing and content of their message to specific customer profiles. To remain visible in narrowed perspective, targeting is key.
Luckily data is here to guide the way. Consumption of online content offers a clear signal to what people are thinking about, concerned with, and considering to purchase. We know that anxious consumers respond to advertising against leisure sites and leisure states, when they are most open to new ideas and experiences. Anonymous user profiles allow advertisers to shift their message to these moments, rather than be forced into a cluttered environment where there is content specifically about their products.
Approach versus avoidance
We like to think that people band together to offer emotional or material support in times of adversity. That can happen, but unfortunately it isn’t very common. The Brexit itself was, in a way, about establishing distance. And most stressful events drive people apart, even if they are as expected and slow-moving as the US presidential election.
To fully understand how consumers react, one has to allow for both approach and avoidance. Anxious people approach controllable aspects of an event, as they simultaneously avoid issues they have no influence over. The nature of any crisis is that there is more to avoid than to control, but marketers are wise to respond however they can to offer consumers a greater sense of autonomy and independence.
Almost anything that offered consumers a sense of control or reassurance had a positive shift in the weeks after the Brexit vote. Interest in insurance, the most obvious example of a product offering security, saw a four-fold jump. Britons were 6.8% more interested in bespoke services (such as couriers or interior designers), and content covering home cleaning products topics saw a 5.3% increase in traffic. Interest in finance and business topics increased significantly but almost entirely from personal concerns – the share related to macroeconomic issues dropped almost 40%.
Britons turned away from anything uncertain or ambiguous that might amplify their heightened anxiety. They were half as likely to start a home project, 8% less interested in personal loans, and 4.4% less likely to quit smoking. Even after adjusting for the shift in news topics, traffic for content detailing environmental and global health concerns fell by at least 25%. Britons were also less likely to consider mental health counseling, medical checkups, retirement planning and adult education.
Marketers should recognise that empowerment, not coddling, is what consumers demand in an anxious moment. Even simply offering detailed information as part of the advertising experience can make an enormous difference. During the Asian financial crisis, 62% of consumers preferred informational advertisements and 59% had a negative reaction to image heavy, emotional pitches. More recently, one of our user experience studies found that the ability to explore detailed content was the most appreciated feature of our interactive VDX ad units.
Fellow marketers – consider yourselves as well, as you are a part of this equation too.
Too often, when anxiety hits, budgets are cut and campaigns delayed. This short-term, impulsive reaction has long been proven wrong. Advertisers that maintain spending through a crisis emerge with stronger brands and greater market share. This was the conclusion of a metastudy by Gerard J. Tellis and Kethan Tellis at the University of Southern California, who after reviewing ten primary empirical studies found “strong and consistent evidence that cutting back on advertising during a recession can hurt sales during and after the recession”.
A recession can be nothing but hidden opportunities.
Bryan Melmed is vice president of insights at Exponential.