GUIDING MARKETING STRATEGY THROUGH COVID-19 - TRAVEL EDITION

GUIDING MARKETING STRATEGY THROUGH COVID-19

Overview

1. What have we seen so far? 2. What could recovery look like? 3. How does this impact marketing strategy? 4. What should I do now?

Before we start… During these extraordinary times, it is easy to become overwhelmed with information given the sheer volume of coverage. Differentiating ‘opinion’ and valid, useful insight is a challenge. It’s important to note we are not economists or specialists in epidemiology, but we are experts in brilliantly joined-up marketing and aim to guide you through marketing in the era of COVID-19. These guidelines utilise our expert knowledge of the travel industry as well as industry bodies and data sources we trust.

Before we start… During these unprecedented times, it is easy to become overwhelmed with information given the sheer volume of coverage. Differentiating ‘opinion’ and valid, useful insight is a challenge. It’s important to note we are not economists or specialists in epidemiology, but we are experts in brilliantly joined -up marketing and aim to guide you through marketing in the era of COVID-19. These guidelines utilise our expert knowledge of the travel industry as well as industry bodies and data sources we trust.

One more thing

Included is this document are no references to any of the following overused CV-19 jargon The New Normal Unprecedented Continue to spend through it, you’ll come out in a better place Disinfectant

1. What have we seen so far?

COVID-19 has significantly impacted people worldwide…

At the time of writing, the COVID-19 pandemic has caused over 2.6 billion people to be placed under lockdown. Many have found their livelihoods suddenly threatened – in a recent study from Kantar, 7 in 10 people said their household income has been/will be affected by the current crisis - and their concerns have been met by governments rallying a ‘war effort’ against an non-human enemy.

Q - Already impacted/expected to impact my financial situation.

82%

76%

74%

70%

65%

58%

Source: Kantar: COVID-19 Barometer April 2020

…and has had a serious knock-on effect on brands and businesses.

FIX Brands that have been impacted, and need to

FLEX An industry that hasn't been negatively affected by COVID-19. Brands that are in good shape to do well during the crisis .

FREEZE Categories that are in lockdown . Brands here must focus on current customers if possible and wait.

significantly fix and/or adapt . Can they shift fast enough to recoup and survive?

Source: Mark Ritson: Marketing through Coronavirus (Webinar April 2020)

From a marketing perspective, advertising spend has been drastically reduced...

The IAB recently released the results of a survey of 390 media buyers, planners and brands.

A recent survey of 2,200 marketers by Marketing Week also revealed that the majority of brands have delayed ad spending decisions.

The headlines are grim.

Ad spend was -33% on social media and -30% on paid search in March and April.

24% of brands have paused all ad spend for Q2. Digital ad spend was -38% and spend on traditional channels was -43% in March and April.

It is no surprise that Twitter recently pulled its revenue guidance for the balance of 2020 and Facebook shared that it is seeing weakness in its ad business.

Source: IAB: Coronavirus Ad Spend Impact: Buy-Side

…although media consumption has vastly increased.

% who say they have started consuming or are consuming more of the following media since the outbreak

Source: GWI: Coronavirus Research: Media Consumption and Sport (April 2020)

And travel, alongside hospitality and leisure, is one of the most affected sectors, with much to overcome.

INDUSTRY-LED • Cancelled/delayed bookings • UK border controls • Border controls overseas • Availability and cost

CONSUMER-LED • Confidence in domestic travel • Confidence in overseas travel • Travel hygiene • Confidence in destinations • New behaviour adoption

ECONOMIC-LED • Likely recession • Global health crisis • Mass unemployment • Mass bankruptcy • Stock market volatility

But this will end. The challenge now is to navigate the key phases to market recovery. To prepare for market recovery, we must ground ourselves in what people are feeling, and identify their functional and emotional needs. We can’t pinpoint exactly when the phases will occur but we do know that brands will be remembered for how they responded – or didn't - when it mattered most.

65% “How well a brand responds to this crisis will have a huge impact on my likelihood to buy that brand in the future.” AGREE

Source: Mark Ritson: Marketing through Coronavirus (Webinar, April 2020)

Historically, there are four key phases in pandemic response.

Responses to pandemics have followed a systematic pattern.

Crisis

Post-Crisis

STAGE 1: SCEPTICISM & DENIAL

STAGE 2: ANXIETY & UNCERTAINTY

STAGE 3: THE ADJUSTMENT LOOP

STAGE 4: THE WORLD BEYOND

Mixed signals and cognitive dissonance .

Collective exhaustion as we lose macro-control, while simultaneously making many tiny, but risky decisions.

Frustration , crackdowns and stress- testing as policies are set and reset; life requires constant re-navigation of the ‘new normal’.

[We can only guess] Rebound and celebratory behaviours, followed by collective reassessment.

(functional) clarity, direction (emotional) true authority

(f) security, control (e) agency, reassurance

(f) outlets, joy/uplift (e) sense of purpose, hope

(f) re-evaluation (e) catharsis

Now

Recession

Next

Source: Phoenix Brand Strategy: Communications in a Crisis

Different people will respond to the crisis in different ways...

Kantar has identified six different segments based on their response to COVID-19, their drive to keep up with the latest COVID news and the degree of concern they feel. 10% Chilled and compliant

16% Patiently waiting

15% Troubled but trusting ----------------- I am really concerned about my and my family’s health.

24% Ostriches xx ----------------- I just don’t see what the fuss is about and I don’t really care either.

21% Follow the rules

14% Precarious warriors

------------------ I am pretty chilled, I hope I can see my mates again soon.

---------------- We’ll be just fine, the main impact is not seeing others. .

----------------- I am a bit worried about seeing other people, otherwise fine.

------------------- This is really tough for me, with the kids, home- schooling and financially.

• • •

• •

Reading up Worried Follow the rules

• •

• •

Generation Z

Silent generation

Lifetstage cohort representation

Source: Kantar: COVID-19 Impact for Brands (Webinar, March 2020)

…and transition through the phases at different times. Each segment is at a different emotional ‘event stage’, with different mindsets, and will move at their own speed through the phases.

Pandemic phases

Source: Kantar: COVID-19 Impact for Brands (Webinar, March 2020)

They are also likely to be more open-minded in the aftermath... In 2018, a study by Richard Shotton demonstrated that in a number of categories, people who had undergone a life event were x2.5 more likely to try a new brand . Life events disrupt behaviours. When someone’s environment changes, it can be destabilising and they begin to question their existing behaviours. COVID-19 is a significant and disruptive major life event impacting billions of people worldwide. Purchasing habits will continue to change over coming months. Customers are more likely to switch to your competitors, and your competitors’ customers are more likely to switch to you.

Now is not the time to go dark . You don’t want to land on the wrong side of this flux.

Richard Shotton, The Choice Factory

…although the desire for normalcy and pent-up want for the things we’ve missed are likely.

Looking at China… ...who is on average two months ahead of the rest of the world, a study from Kantar observed huge percentages of people looking forward to ‘returning’ to normal, with 45% looking forward to travel . As one of the hardest hit sectors, it is also encouraging that luxury brand Hermès notably raked in $2.7m sales in one day once its doors opened. Chief Financial Officer Jean Jacques Guiony said this ”shows the appetite of ... Chinese people after two months of lockdown to come back to stores and come back to their previous pattern of consumption”.

Source: Kantar: COVID-19 Impact for Brands (Webinar, March 2020)

So it is vital we navigate phase transition and attitudinal shift.

STAGE 1: SCEPTICISM & DENIAL

STAGE 2: ANXIETY & UNCERTAINTY

STAGE 3: THE ADJUSTMENT LOOP

STAGE 4: THE WORLD BEYOND

(functional) clarity, direction (emotional) true authority

(f) security, control (e) agency, reassurance

(f) outlets, joy/uplift (e) sense of purpose, hope

(f) re-evaluation (e) catharsis

Data from Skyscanner analysis reveals positive changes to sentiment around international travel: - People believing it’s getting worse > reducing > 45% down from 76% the week prior. - People believing it’s getting better > increasing > now 26% up from 9% the week prior.

Additionally , flight searches have already started to increase . New York, Bangkok and Tenerife are the top three destinations for travel in December .

Source: Skyscanner: Weekly Travel Insights - 23 April

2. What could recovery look like?

Bain & Company have identified three possible scenarios...

#1 Faster recovery, back to normal More rapid economic slowdown and accelerated development of vaccine.

#2 Moderate recovery, some changes persist Periodic localised mitigation orders (e.g. stay at home) until treatments or vaccine available, in 2021. Economic recovery through 2021. Government support required during crisis.

#3 Incomplete recovery in the medium term Very strict mitigation efforts needed to keep infection growth rates at manageable levels. Protracted (1+ years) period of repressed economic activity.

Epidemiologic and macroeconomic assumptions

Rapid restoration of economic activity and acceleration in Q2-Q3 2020.

Source: Bain & Company: The 2020-21 Impact on Travel (Webinar April 2020)

…and how this could impact travel. #1

#3 Incomplete recovery in the medium term • Domestic restrictions 2-4 quarters • International restrictions through 2021 • Volume and price impact persists in the medium term • Long-term change in some consumer behaviour (e.g. corporate and international travel) • New business models • Disappearance of major players

#2 Moderate recovery, some changes persist • Domestic restrictions 1-2 quarters • International restrictions through 2020+ • Re-start more staggered by segment (eg age, income) • Social distancing through 2021 • Further consolidation • Change in role of distribution • Talent battles across industries

Faster recovery, back to normal • Domestic restrictions 1 quarter • International 2+ quarters • Lower risk segments drive faster rebound • Digital channels maintain a higher penetration • Retirement of older assets

Travel restrictions

Changes in consumer behaviour

Structural changes

Travel returns to pre- crisis levels in 2021

Travel returns to pre- crisis levels in 2022

Travel does not return to pre- crisis levels in the medium term

Source: Bain & Company: The 2020-21 Impact on Travel (Webinar April 2020)

The depth and duration of recovery varies across the three scenarios.

Source: Bain & Company: The 2020-21 Impact on Travel (Webinar April 2020)

Taking moderate recovery, likelihood is domestic will recover first, followed by international travel in mid-2021.

Above reflective of scenario B - ‘moderate’ recovery

Source: Bain & Company: The 2020-21 Impact on Travel (Webinar April 2020)

A possible customer journey based on moderate recovery could look like this.

6 weeks

3 to 6 months

9 to 24 months

OUTBREAK

NORMALITY

LOCKDOWN

SOME NORMALITY RESUMES

RECESSION

Post-Crisis

CRISIS

STAGE 4: THE WORLD BEYOND

STAGE 5: NORMALITY RESUMES

STAGE 2: ANXIETY & UNCERTAINTY

STAGE 3: THE ADJUSTMENT LOOP

STAGE 1: SCEPTICISM & DENIAL

Feb 2021

Apr-Jun 2021

Mar 2020

Jan - Feb 2020

Apr 2020

2022

NOW

POTENTIAL VACCINE

Potential influences on any possible timeline: - Rollout of a vaccine - Potential for subsequent waves - Recession

3. How does this impact marketing strategy?

Brands need to be present through the phases... When businesses stop being present, their brand health is immediately impacted . A shift in total brand communication awareness has lasting impact . Driving saliency is crucial; strong brands recover nine times faster .

Source: TBWA Sydney - Navigating Uncertainty Report April 2020

Source: Kantar: Brand Resilience (Webinar April 2020)

…and be as pro-active and agile as possible.

The key is managing all time horizons – marketers who manage to turn crisis into opportunity are those who consider and address impacts across the short, mid and long term... They will secure the now and make up for lost ground as recovery kicks in, and get on the front foot to turn shifts into long-term growth opportunities. “ ”

Source: Ogilvy: What’s next? Steering brands through Covid-19 Webinar (April 2020)

4. What should I do now?

Our seven guiding principles to navigate the phases.

1. Optimise media mix to sustain the short term. 2. Extreme segmentation - know your customer.

3. Go back to basics - revisit the 4Ps. 4. Monitor the market for signs of shift. 5. Adapt your comms strategy. 6. Review data analytics for full funnel optimisation and fix weak links. 7. Create a LCP search strategy ahead of demand.

#1. Optimise media mix to sustain the short term.

1. Pause or re-allocate spend to target in-market behaviour and highest ROI. 2. Optimise channel mix to favour change in consumer behaviour, including in-home channels such as radio, TV, digital and social. 3. Evaluate emerging touchpoints based on above e.g. podcasts, streaming. 4. Consider opportunity to grow SOV whilst competition is low. 5. Identify opportunities to generate leads and grow your database. 6. Be considerate about ‘what you say’ look back at pandemic timeline to identify key emotional and functional drivers and tailor messaging.

Example - live TV usage on the increase.

Since the lockdown came into place, we’ve seen shifts in how viewers are accessing TV content. Live viewing has always been the most watched form of telly, but it's on the rise again.

Due to more time at home, and a higher dependence on TV news coverage, across the first four weeks of lockdown, TV impacts increased 22% year-on-year for individuals and a whopping 25% for ABC1 adults.

#2. Extreme segmentation - know your customer.

How has their appetite for travel changed?

Who are my customers?

Where can I reach them?

What do they want now?

Database analysis

Customer surveys

Customer surveys

Current media consumption - channels and patterns

Persona profiling ` Geographical mapping

Search universe sizes

Comparing ‘normal’ vs now

GA intent segments

GA affinity segments

Discovery projects

Site, social and email engagement

Typical user journey reviews

Brochure request/enquiry insight

Booking trends

Examples - knowing your customers.

Leger Holidays embarked on a ‘brand and audience’

Mr & Mrs Smith sent a survey to their database to better understand how they and the industry will look going forward. This will not only help influence their communications strategy during the outbreak, but also provides opportunity for them to review and reshape their product - meaning they’ll be on the front foot as we move into recovery.

discovery project to ensure their product remained desirable and messaging reached the right people, through the right channels. This project included profiling their database using Mosaic and TGI data, and surveying their customers and staff. Data collected helped identify opportunities to improve product and services, and reshaped communication and marketing strategy.

#3. Go back to basics - revisit the 4Ps.

If you’re a marketing muppet – you don’t like the 4Ps because they’re old. If you’re a scholar you love the fact they’re 60 years old because of longevity. These are the tactical levers you pull to implement your strategy. -Mark Ritson “ ” Additionally, in 2010, extensive analysis by Harvard Business Review found that whilst it’s true that companies that cut spend faster and deeper had the lowest probability of coming out ahead, companies most likely to gain ground implemented operational efficiencies and invested on marketing, R&D, and new supply capabilities .

Once you’ve completed customer research and segmentation, go back to basics and review the 4Ps in light of the new situation.

The 4Ps COVID-19 edition:

Promotion How do you balance long with short, and emotional with rational across all marcomms to lead customers to buy, now and in the future?

Price At a time when people may be nervous to spend, review opportunities with payment terms , or ‘value-add’ offers outside of simple discounts.

Place This could include strong trade relationships and ensuring on and offline direct channels are ready. Ultimately, where and how would somebody buy your product?

Product How does the product need to adapt to people’s new expectations ? Ultimately, what is it you deliver that your customer pays for?

Examples - the 4Ps in practice.

Product Focus on things that can be done in lockdown.

Price Half-price flights and a third of hotels.

Place Bring the destination to people’s homes.

Promotion Looking for the benefits.

To encourage late-year visits, Visit Sicily will pay half of flight costs and a third of hotel expenses for travellers, as well as free tickets to many of its museums and archaeological sites.

Airbnb adapted their website homepage to sell online experiences and connect empty apartments to medical professionals.

Lonely Planet adopted a positive tone, encouraging uplifting stories that have come out of the situation and helping people to enjoy travel from their own homes.

The Faroe Islands built an experiential game allowing users to explore the Faroes by interacting - live - with a local Faroese, acting as your eyes on a virtual exploratory tour.

#4. Monitor the market for signs of shift.

Asking people their opinions in a survey during a pandemic can be fraught with bias. Instead, look for signs of green shoots and analyse behaviour in real time where possible.

Website traffic engagement data - bounce rates, page consumption, dwell times Booking data - sales, cancellations Leads - sign ups Customer feedback Social listening

Consumer confidence tracker – Trading Economics Market updates from partners – including Google and Facebook Industry updates – including GWI, Kantar, Mintel Movement tracker summary - monitor when people start to move around more

Travel Market insights - tracker based on digital behaviour and marketing spend Sector reports – as above for specific chosen industries Search intent - Google microsites updated in real time

Examples - monitoring the market.

Monthly Market Size (SimilarWeb)

Examples - monitoring the market.

Consumer Confidence Tracker (GFK)

Examples - monitoring the market.

OOH Movement Tracker (Talon Outdoor)

#5. Adapt your comms strategy.

• Don’t go dark - staying ‘on’ signals normalcy. It’s a subconscious cue that everything will be okay and that we shouldn’t lose hope. • Think about actions, messages and sentiment - what you do, what you say and what the motivation is. • Listen to your customers - get the cue for your tone of voice by monitoring customer sentiment. • Help people find connection - turning your brand into a platform for doing things, sharing experiences or collective dreaming. • Create moments of calmness, joy and hope - play a part in providing mental and emotional wellbeing. • Help people learn or create - recognise consumer desire to be active and creative. • Enable future planning - remind customers there will be a future beyond and enable them to make plans for it.

Staying true to YOUR values and principles whilst having YOUR customers front of mind is more important than ever. However, there are a number of guiding principles to help shape your content, messaging and creative through the pandemic.

Examples - great travel content.

Skyscanner’s #WeWill asks people to share stories of where they’ll go and who they’ll see once this is all over. The campaign is based on a consumer survey allowing Skyscanner to understand how consumers are feeling and how they can respond.

Arne Sorenson, President & CEO,

Marriott International showed leadership and empathy in his video to all Marriott associates.

Keukenhof, the world- famous Dutch flower park, has created a 360 ° virtual tour, allowing customers to experience the blooms before they disappear. Every week three new videos are posted on social media to showcase the park, which usually welcomes 1.5m visitors in its eight-week season between March-May.

Turismo de Portugal’s #CantSkipHope promotes calmness and serenity whilst focusing on togetherness and hope.

Examples - great travel content.

Belmond, recognising the need to focus on mental and emotional wellbeing , have created The Belmond Care Package, a hub of website content that delivers ‘the ultimate care package to soothe the soul and enliven your stay-at-home routine’.

Kenwood Travel are helping to enable future planning by offering 2021 holidays with £0 deposits, meaning no financial commitment from customers and no risk.

Examples - great travel content.

HF Holidays have tapped into consumer desire to learn and create within their email marketing, providing things to do and travels to dream about including cooking, photography and reading.

Viking Cruises have created Viking.TV that utilises all of their onboard entertainment, helping customers explore the world by listening toworld-class lecturers, visiting museums and getting ideas for books, movies and music from the comfort of their

homes. They live-stream speakers every Thursday.

#6. Review data analytics for full funnel optimisation and fix weak links

Digital data Maximise the value of data collected from your website.

SEO Increase the quantity and quality of traffic being driven to your website.

CRM Leveraging insight from your database and BTL activity.

CRO Ensure your digital path to purchase is as easy and intuitive as possible.

Google Search Console GA fully utilised Search strategy

UX Mobile optimised/first Key information easily found Dynamic content Journey funnel analysis A/B testing opportunities

Database health Data capture and nurture Data insight CRM performance Targeting Facilitating other channels

Crawl accessibility Compelling and share-worthy content Keyword optimised Technical considerations

Measuring success Flexible approach

#7. Create a LCP search strategy.

• Get ahead of your competitors by developing a LCP search strategy ahead of the rise in consumer searches. • LCP (lead, compete, participate) is a planning framework that helps drive search strategy through prioritising keywords based on business priority and purchase intent . • Utilise paid auction data and organic competition data to provide a view of the overall search landscape that can then be leveraged for strategic planning. • The benefits of developing a search strategy based on an LCP framework are threefold ; it indicates where there are keyword gaps, informs what to activate on PPC and provides focus to content creation and optimisation from an SEO perspective.

Lead Own in search. Brand and highest priority keywords. Be in a position of competitive advantage. 75-100% impression share.

Compete Strive to show up in search. Be able to rival others but considerate of ROI. 50-75% impression share

Participate Play a role in search. Be involved when a user searches. 10-50% impression share.

In summary...

#3 How does this impact marketing strategy? Marketers who turn crisis into opportunity are those who get on the front foot and consider their impact across the short, mid and long term.

#4 What should I do now?

#1 What have we seen?

#2 What could recovery look like? Based on a moderate recovery, it is likely that domestic travel will recover first, followed by international travel in mid-2021, pending a vaccine rollout.

Utilise the seven guiding principles ; optimise for short-term sales, review your customer, revisit the 4Ps, monitor the market, adapt your comms strategy, fix weak links and get on the front foot of your search strategy.

There are four key phases in pandemic

response. Brands must navigate the phases whilst closely monitoring shifting consumer sentiment .

Life is a journey, not a destination Ralph Waldo Emerson

Marketing brilliantly joined-up

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