Digital transformation has been a buzz word in recent years, and has only been sped up by the COVID-19 pandemic, with brands looking to digital platforms for their marketing strategies.
Most recently, Google partnered with Singapore agencies, Infocomm Media Development Authority and SkillsFuture Singapore, to ramp up digital job offerings. As Scott Beaumont, president, Google APAC said, "While the pandemic has impacted jobs and career opportunities, it has also accelerated digitalisation by businesses and increased demand for digital skills.”
Sportswear giant Nike also said this week that it will be going into a digitally-empowered phase of its strategy to unlock long-term growth and profitability. Last month, its CEO John Donahoe said the company aims for digital to account for 50% of its overall business, according to Reuters.
Meanwhile, according to a study by communication company Twilio, out of 2,569 respondents across countries including Singapore, Japan, Australia, France, UK, and US, 97% of respondents said the COVID-19 sped up digital transformation in their organisations. Twilio also found that 72% of Singapore companies say that digital transformation has sped up a great deal and the top barriers that have been broken down are namely: getting executive approval (37%), lack of clear strategy (37%), reluctance to replace legacy software (35%), insufficient budget (34%), and lack of time (34%). It is added that the pandemic has brought about increase in digital transformation budgets, with 79% of respondents agreeing that they increased their budget for digital transformation.
Earlier this week, market research company Advertiser Perceptions also released a study called "The Coronavirus Effect on Advertising" which showed that more than half of the advertisers interviewed plan to prioritise digital media to drive its advertising efforts in the second half of the year. Among the respondents, 75% said they will use paid social media and display ads, 70% said they will use paid search, and 64% said it will use digital video.
Has digital transformation taken over SEA?
Businesses in Southeast Asia have also seen the increasing importance of digital strategies during the COVID-19 pandemic. However, not all of them are making huge increases towards digital investments. Kelvin Tan, head of customer and marketing (retail business), FairPrice Group, told Marketing that moving on its digital investments will continue to be maintained, if not increased. He added that the company will prioritise high ROI media tactics, and divest some spend in certain platforms while investing more in others. He added:
We intend to focus on media owners who are willing to collaborate more tightly with FairPrice in ensuring such media executions meets our conversion strategy.
With more than 20% of its budget invested in digital, Tan added that FairPrice Group usually invests over a spread of media to ensure it achieves the widest reach at maximal cost efficiency. However, it has fine tuned its media mix strategy to cater to increased stay-home trends and digital adoption amongst its consumers during the COVID-19 period. Tan is also quick to note that while venturing into online platforms,
The company had to be careful not to overcrowd its stores both online and offline.
Although COVID-19 has not impacted FairPrice’s marketing budget given the need for essential supplies is top of mind for most consumers, the company has re-pivoted its advertising plans by having a stronger emphasis on targeted communications. Besides digital, this is done via in-store radio and collaterals to communicate with its consumers and enable them to understand FairPrice’s efforts better.
Meanwhile, Carlsberg Malaysia has also slightly increased its emphasis on digital spend. Leonard Chua, digital strategist at Carlsberg Malaysia said that across all brands, the company had an even split when it came to spend on digital versus traditional media. However, after COVID-19, it is now allocating 75% of its budget to digital and 25% on traditional media, which is mainly print. Chua said that due to the COVID-19 pandemic, the company moved its budget and had reinvestment towards digital mediums and the pandemic has no doubt accelerated this pivot.
Carlsberg Malaysia has also already started moving its advertising spend to digital platforms for the past 12 months due to a semi-dark market and with many traditional mediums and platforms restricted such as TV, radio, cinema, and out-of-home (OOH). Hence it is left with limited platforms such as social media, programmatic networks, and influencer and content marketing.
Moving forward, Carlsberg Malaysia will continue to invest in its digital strategies. Chua also said that there seems to be a decline in attention towards social platforms, and he believes:
Branded content collaboration with digital content creators, as well as a more strategic influencer partnership, will be the way forward.
On the other end, automotive marketplace Carro shifted away from advertising during the period of COVID-19. Although most of it budget was already allocated to digital channels prior to the COVID-19 pandemic,
The tech company chose to change its marketing strategy and spend on content marketing instead of advertising during the COVID-19 period.
Manisha Seewal, group chief marketing officer, Carro said the company was focused on creating informative sharable content for drivers. She added that it was the right strategy as customers are actively looking for “how to” information on the internet during that time. Private-hire vehicle drivers were looking for content such as “how to maintain your car during the circuit breaker period” to understand if they qualify for the payment deferment measures rolled out by the government, Seewal said, adding "It was not the time to blast insensitive promotions, but to empower customers with relevant information."
Seewal added that this shift in marketing spend resulted in positive results, seeing its organic traffic maintained from pre-COVID-19 period while having customer enquires that show higher intent of transacting.
For now Carro has resumed spending on digital channels such as Google, Facebook, Instagram.
Seewal said that while the allocation percentage of its marketing budget to digital has not changed too much from pre-COVID-19 period, it is keeping a close digital watch on automotive search trends as they move based on government measures such as circuit breaker rules, COE bidding dates, and phased out reopening of the automotive sector.
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