In an era dominated by the cost-of-living crisis, retailers face an urgent need to recalibrate their marketing strategies. As consumers prioritize value over brand and generally change their shopping habits due to cost pressures, UK retailers need to focus on performance driving media and messaging. Even though Out-of-Home (OOH), one of the oldest forms of advertising, has traditionally been viewed primarily as a channel for brand awareness, It should now be considered increasingly as a performance marketing medium as well, especially since numerous retailers are implementing new loyalty schemes or rewards. This is not a new concept in international markets, as the United States, Canada, and Australia have already provided examples of how the unification of brand and performance marketing can be a game-changer.
Reduced spend increases pressure to perform
It is clear that cost-of-living crisis affects the High Street: consumers are adapting to reduced spending, tightening their belts while retailers are experiencing low footfall. The rising costs have changed the way how we shop and how we sell, as the focus moved to value. Given the recent news that retail sales level are decreasing, brands are carefully allocating their marketing budget.
An immediate footfall uplift, a surge in sales is imperative, and the integration of performance marketing into OOH brand strategy appears to be tactically correct. This is especially crucial in the apparel and grocery sectors, where the competition is fierce. The market is more unstable than ever: after positive in sales June, followed a negative July and August.
Finding the right mix of brand and performance in OOH
Performance marketing enables brands to channel their efforts, pinpoint their target audience and respectively, sell products, all while tracking the results of their campaigns. Simultaneously, maintaining a stable brand presence in the OOH market is essential to performance success. Leading Marketing Expert, Simon Kingsnorth, underscores the importance of brand recognition, mentioning that nobody will invest without knowing your brand. Striking the right balance is imperative. You need to work on both.
Campaign Media360 Conference plays a pivotal role in reinforcing the statement that ‘brand and performance must work hand-in-hand to engage customers in a difficult economic climate.’ As said above, in the current crisis, it's clear that alongside long-term brand investments, performance marketing strategies geared towards short-term sales are strategically correct.
Performance and Brand marketing: often perceived as separate domains. However, since the pandemic and particularly since the beginning of cost-of-living crisis, it motivated retailers to try new combinations. As a result, we are witnessing a growing trend in Digital Out-of-Home advertising that serves dual purposes in the same ad or campaign mix:
Aims to boost recognition and reputation, recall or purchase intent
Lead to a specific action like such as drive to store, sales uplift, loyalty sign ups
Moreover, Jordan James of Unlockd Marketing says ‘when the brand and performance marketing disciplines combine, the effect can be exponential.’
However, the performance marketing must be constructed upon a solid brand foundation. Brand awareness, name recognition, and tone of voice are pivotal. For example: Transport for London, showcasing a direct travel offer from Heathrow Airport to Central London for £13.30, KFC's DOOH advertising offering temporary 50% off deals in national malls and Superdrug promoting discounts via their loyalty scheme on the London Underground.
Increased focus on loyalty from retailers
Besides being a way to thank loyal customers, reward programs represent a goldmine of data insights and customers behaviour tracking. It is the purest example of Brand + Performance Marketing in advertising as it allows brands to strengthen their position in the market by stealing share from more expensive competitors, but also offers customers every day cost-effective shopping. To launch a a successful ooh performance strategy, you need to understand customer preferences, as Tesco does with its Clubcard scheme, demonstrating why they are one of the leaders in retail.
Boots represent one of the primary examples of how Performance Marketing can be successfully implemented in OOH, through loyalty cards offers, which drove incremental footfall into stores. StoreBoost helped them to increase awareness of the savings available through the Advantage Card. By using real-time occupancy data from the stores, StoreBoost and Boots played the ‘Price Advantage’ ads. It resulted in Boots driving on average +6% incremental footfall into stores, while also delivering 90% ad recall from the same ads.
They successfully gained customers through a performance marketing initiative, specifically the Advantage Card's 10% discount offer. This strategy has been proven effective in retaining these customers and they have increased the focus on value recently with their biggest ever focus on loyalty.
The current economic situation encourages combinations, as customers are buying based on trust, and wrapping a Performance Ad around a Brand Marketing initiative motivates shoppers. Ultimately, performance marketing offers a more tangible and effective means of delivering the brand message. We have researched examples of DOOH advertising as a dual-purpose tool, concentrating on both brand recognition and driving specific actions. Nevertheless, a strong balance between these two disciplines is necessary, particularly in challenging economic times.