MCO's impact on OOH: How industry players in MY are evolving their strategies

Out-of-home (OOH) media has undoubtedly taken a hit during the COVID-19 pandemic, as more consumers are either working from home or remaining at home to practice social distancing. According to a recent global advertising market update by IPG Mediabrands' Magna, OOH media owners might suffer the most in the first half of 2020, as both supply and demand will be hurt for weeks. 

In Malaysia, specifically, Prime Minister Muhyiddin Yassin recently extended the Movement Control Order (MCO) to 14 April. In a recent study, GroupM Malaysia found that some of the key consumer behaviour shifts during the COVID-19 pandemic in the past three months included drop in travel to shopping malls, eating in, as well as online shopping and streaming. With the MCO extension and this current change in consumer behaviour, it is safe to say that OOH media will continue to remain impacted in Malaysia.

In a statement to A+M, UEM Sunrise's CMO Kenny Wong said it is still too early to know the impact of COVID-19 on its OOH ad spend. In view of the MCO, Wong said UEM Sunrise will be reviewing its OOH presence given the vast reduction of OOH activities, and the fact that almost all Malaysians must remain at home all day. "We have yet to ascertain the impact of radio, but we will review this and see if we need to revise our strategies to tap more into this medium. Radio and OOH have never been our key media platforms to reach our customers. We need to be sure that radio is the right medium for us, especially during this period," he explained.

UEM Sunrise's OOH and radio spend in 2019 was about six-digits each. Wong said it has always been mindful of its advertising expenditure and platforms used to reach its customers and potential house buyers in the past. "Our smart spending habits will not change," he said.

That said, the company has been leveraging on digital and social media platforms in recent times and plans to intensify its investment into these platforms during this MCO period. "We are aware that given this period of isolation, people will consume more online content. We have to be careful at where we are spending, and only put money in where we believe can hit the mark and make the most impact," Wong said.

Likewise, Eugene Lee, regional director of marketing, Asia business unit at McDonald's said the COVID-19 outbreak has led the company to shift its budget to more engaging mediums such as digital because of the speed to market and fast turnaround in production. "Producing content that is socially relevant right now is important to build brand trust, and unfortunately, with TV, for example, you need big production budgets and longer lead times," he said.  According to him, McDonald's OOH media buy in Malaysia is purchased on an annual basis and nothing has changed yet for the two weeks of MCO. However, a visual change that was initially scheduled for late March has been deferred. As for radio, Lee said it has already been cutting its spend over the years to refocus on digital. 

On the other hand, while companies are either decreasing OOH spend or do not place much focus on that medium, foodpanda Malaysia seized the opportunity during the MCO period to thank its food delivery drivers by utilising more than 150 digital OOH screens nationwide. It collaborated with Dentsu Aegis Network (DAN) Malaysia and rallied DOOH partners to release thank you messages nationwide.  Foodpanda's head of marketing, Fabian Emanuel, said it wanted to reach out to all riders to thank them for their service and to let them know that foodpanda is thinking of them and appreciate what they have done for their communities during this period. According to him, foodpanda and DAN brainstormed a few different ideas but decided this would be the best way to reach all food delivery riders as they were on the road.

Yap Chee Weng, head of mediabrands at DAN, said when foodpanda approached the team, the team was thrilled to work with the company to reach out to its abang riders that always bring consumers the food they love. 

"We approached media owners we work with to find out if they would be keen to jump on board. DOOH was selected as it is the most efficient medium to reach all food delivery riders in the quickest time possible,” he added. Among the list of media owners that came on board included Big Tree, BTSJ, Laguna De Bay, Lantern Media, Setia Media Outdoor, Spectrum Outdoor Marketing, and Wow Media.

Taking a non-traditional approach to OOH

Statistics from Moving Walls showed that there was a drastic dip in audience movement in Bukit Jalil, Bukit Bintang, Johor Bahru and Penang. The most drastic decline was seen in Bukit Bintang, which had about 3,132,920 consumers before the MCO (between 1 to 17 March). Following the MCO, the number dropped to 512,863.

 Moving Walls told A+M that the MCO has "directly impacted" the ROI of OOH, as many campaigns have been placed on hold, ad spends are being restricted, and consumers flock indoors. Despite the uncertainty in OOH media, Moving Walls said advertisers are not cutting back on OOH expenditure. Instead, they are shifting to place-based models, for example residential areas, hypermarkets, convenient stores, and pharmacies. All these areas are currently hotspots for consumers and being visible there is the most effective way to reach consumers.

Through OOH, brands still have the opportunity of connecting consumers through cross-medium buys, mobile and place-based inventories near communities and essential services. "It is important to reach the consumer in a context that would mean the most to them in this period," Moving Walls added, saying:

The OOH stakeholders that will benefit the most are those which readjust, innovate and move to where the eyeballs are, faster than the others.

"What could prove to be game-changers are innovations and non-traditional approaches to the medium," Moving Walls said. While it is undetermined how long it would take before Malaysian returns to its usual state pre-MCO, Moving Walls said brands will need to immediately plan and brainstorm strategies to bounce back post-COVID-19. 

"As consumers are getting used to the new normal, we have to be prepared for when these restrictions are lifted. Amidst this very dubious period, it is best to embrace this challenging times with confidence and optimism, while finding new opportunities by welcoming innovation and technology to reach and engage consumers," Moving Walls said.

Similarly, Valens Subramaniam, founder and CEO of OOH transit media company Rodeo has also noted an impact on OOH due to COVID-19. He said that the pandemic, followed by the MCO "certainly brought bad damage to OOH in general". With fewer consumers on the road, it would be harder for brands to spend and entice them.

For Rodeo in particular, we have no new campaigns running this month. However, we have secured few campaigns for the Q3 onwards.

When asked how long he foresees the impact on OOH to last, Subramaniam said he expects it to be at least two to three months, adding that it would be logical for clients to divert their spending to TV, radio and social media during this period.

Magna's latest global advertising update said that digital media will be the least impacted media type in terms of advertising revenues, slowing down to single-digit growth in 2020 compared to nearly 20% per year over the last eight years. The organic factors keeping this medium afloat are growing adoption by marketers and growing consumption, accelerated further during the outbreak; continued growth of eCommerce; and continued reallocation of budgets from below-the-line marketing channels such as point of sale.

With the shift towards digital spend, Espee Wong, business director, Havas Media Malaysia said advertisers with eCommerce and online services, in particular, have become more aggressive and creative in their communication messages, riding on the current rise of digital consumption. Radio and TV ad spend, however, have not witnessed a significant spike, Wong said. She added that since the MCO has been extended by another 14 days, most advertisers will choose to wait and see, observing how the overall market is performing in the next few weeks.

The chance to plan a "bounce back" campaign

Most advertisers in Malaysia are deferring their campaign to launch post-MCO, according to Posterscope's GM Paul Low, and the budget for thematic campaigns is being shifted to a later date, pending the lift of the MCO. According to him, the agency is confident that consumers nationwide will most likely swarm the streets once the MCO is lifted and when the pandemic is over. "In this interim, this will be the best time to plan a 'bounce back' campaign in advance to capitalise on this opportunity," Low said.

Although some ad spend has been diverted to social media and TV, Low foresees the impact on OOH to only last throughout the MCO ban. "Things should be back to normal, and possibly even an increase in OOH spend as more individuals will be carrying out activities outside of their homes," he explained. 

On the other hand, GroupM Malaysia's CEO Chanchal Chakrabarty hopes the impact on OOH spend will normalise by the third quarter of this year. "And if with impact on business, budgets for the year are rationalised (which is likely), then in some cases, OOH might be de-prioritised depending on the category," he added. Like Low, Chakrabarty said clients' campaigns which were due to commence during the MCO have been deferred. All digital OOH campaigns have been cancelled and static boards contracts are mostly getting extended free of charge for the downtime, he added. While there is a general trend of clients channelling their marketing dollars to other media platforms, Chakrabarty said it is "not as simple as just diverting spends" as there are a few scenarios brands have to consider.

Firstly, some companies having to revise their overall business projections downwards, are conserving marketing budgets and ploughing it back to bottom-line as savings. This would be more relevant to categories playing in leisure, hospitality and travel, he said.

Next, some clients are moving their budget to cause-related activity to help those impacted by COVID-19. Essential services including telco, eCommerce, insurance, postal and logistics are also mostly maintaining spend and using digital as the primary channel. Also, the spend behind eCommerce and eCommerce channels have also spiked as it is now becoming a new necessity. Meanwhile, Chakrabarty said FMCG companies have moved budgets into TV, OTT and digital, as viewership and consumption of these platforms have spiked due to the MCO.

Content is indeed king

With companies being more cautious about their marketing spend during this period, Chakrabarty said cause-related campaigns would take them "a long way" into the consumers' hearts and minds, just like what Coca-Cola has done in the region by channeling about RM12.8 million in ad budget towards COVID-19 measures in the Philippines. Media channels also play a part, and brands should target digital, TV or OTT and Spotify, he added.

As for content, make it contextual. Create empathy to connect with consumers.

Meanwhile, GroupM Malaysia's recent study also advised brands to adapt their communications messaging, reimagine consumers' motivations and path to purchase, as well as review current media mix and spends. It also established the 3As - acknowledge, assure, access which are applicable through the consumer purchase funnel.  Through acknowledging, brands should express empathy to those affected through an authentic brand voice. When it comes to assuring, brands are advised to take specific steps to address the situation within its community. Lastly, brands can revisit the consumer path-to-purchase to ensure uninterrupted conversion.

Besides cause-related campaigns and producing quality content, brands should be sensitive and remain positive, Posterscope's Low said. He explained that during this period, brands should avoid flippancy or the temptation to drive quick engagement with an ill-thought out topical execution. He describes this as "a grave mistake that may damage the brand being perceived as opportunistic".

"Additionally, brands should look to reinforce and celebrate positivity where it is relevant and respectful, as consumers will be grateful to find that 'feel good' factor during this difficult time to lift their spirits," Low added.

Agreeing with Chakrabarty and Low is Havas Media's Wong, who said brands need to understand that it is important for them to create a meaningful message and connection with their consumers during this vulnerable time, as consumers are more inclined to buy from brands that care.