The November circuit breaker lockdown could not have come at a worse time and the British Retail Consortium projects it will cost the sector £2 billion per week. To make matters worse, analysts suggest Amazon’s rescheduled Prime Day is likely to eat into profits for other retailers throughout the Golden Quarter. Bah humbug!
Frankly, we all need a little Christmas cheer. Thankfully Christmas ads season is upon us again. However, 2020 is likely to be the end of an era. The way advertising is done could look very different next year.
No turkeys here
Netting the nation’s favourite Christmas ad has become a badge of honour amongst the big retail brands – and their creative agencies. Sainsbury’s set the standard high with its World War 1 anniversary themed tear jerker back in 2014, and John Lewis and others have duked it out ever since. Consequently, planning next festive season’s ad campaign begins almost as soon as Santa’s polished off his final mince pie.
What most of these tentpole ads have in common is a distinct lack of products. Even Iceland has experimented with moving away from tried-and-tested party food extravaganzas to (award winning) brand purpose.
While critical plaudits offer great bragging rights to brands, what’s most important now is sales. Tub-thumping brand awareness campaigns seem out of step with the consumer mood – and especially when many parts of the retail sector face such uncertainty.
Much has already been written about the audience shift to online and streaming channels over the course of 2020. Overall, digital advertising spend overtook that of traditional formats for the first time in June. However, Coronavirus has only accelerated trends; while cinema and out-of-home have been hit hardest by COVID, linear TV and print were plummeting even before the pandemic.
This doesn’t mean the age of Christmas ads is behind us, but formats will be dictated by the channel – and that will increasingly be online. Advances in ecommerce technologies in recent months mean that Christmas ad campaigns will become much smarter in using video formats as direct sales channels.
A changing landscape
TikTok and YouTube have recently rolled out shoppable ads, each provisioned through partnerships with Shopify, albeit working in slightly different ways.
Buyers clicking on product images on TikTok are redirected to the Shopify platform to make the purchase, thus ensuring the retailer maintains control of the transactional and customer data. By comparison, ‘Buy Now’ buttons embedded alongside YouTube videos integrate with the full suite of Google Shopping tools and allow the purchase to be completed without leaving the platform.
The evolution of video as a direct sales channel will significantly alter the ecommerce landscape. It positions the likes of Google and TikTok as direct competitors to incumbent ecommerce giants, notably Amazon. The success of brands selling through social and influencer-led channels, particularly in China, demonstrates the model can work.
Pull not push
There is great potential for YouTube, in particular, to make video a viable mass market sales channel. While pre-rolls on streaming services allow retail brands to target very specific audiences, searchable video offers the means to reach actively engaged ones. Christmas ads rack up millions of views on YouTube each year and that’s purely through user searches.
This has the potential to make the channel a far more cost-effective way of reaching mass audiences than using offline advertising formats. Moreover, it also has the benefit of allowing advertisers to use shopping tags to optimise ad spend on other Google platforms, and across fixed and mobile devices.
There is still scope for the big retail brands to push out the boat with big, bold creative, but they could effectively subsidise production costs with product placement. However, brand partners are unlikely to be satisfied with anything less than Michael Bay levels of subtlety. Consequently, we could see even prestige retail brands moving away from in-vogue, high concept ads and a return to more product-focused formats.
What is potentially more interesting is the opportunity for smaller or luxury brands to closely target specific audiences – for instance a beautifully shot, unboxing style video might work well for a high-end jewellery or cosmetics retailer.
Christmas future looks rosy for shoppable video. We may see some experiments with the emerging format this year, however next year’s festive period will be the real proving ground for reaching mass audiences. Once the potential is established who’s to say what’s next, but anyone that’s ever watched a Bond film will be very aware of the potential of product placement becoming an even more lucrative segment.
Amazon, and potentially Netflix, must surely have taken note of the £75 million raised in product endorsements in the (still?!) upcoming ‘No Time To Die’. One thing’s for sure, team Bezos will be looking for ways to counter the rising threat from YouTube. Perhaps the logical end point will be that blockbuster Christmas ads become shoppable Christmas films?
Fran Quilty, CEO at e-commerce data specialist Conjura