As Hong Kong continues to struggle with political unrest, brands and marketers are responding by restricting spending and planning marketing efforts more cautiously. In a new study, Nielsen has revealed that Hongkongers are unwilling to splash out their cash due to worries over the state of the economy, and it suggests methods for brands to adjust their approaches to weather the storm.
The key driver metrics from Nielsen's Consumer Confidence Index (CCI) have shown Hongkongers may have legitimate concerns that will tie up their purse strings.
According to statistics from the Hong Kong government, one repercussion of the current situation - which has been in effect since large scale protests began in June - has been a rise in Hong Kong's unemployment rate. Its climb to 3.1% between August to October has meant that the general outlook of job prospects dropped from 59 in Q2 2018 to 42 in Q2 2019. This figure is even starker when contrasted against the Q2 2019 figure for APAC overall, which sits at 69.
In addition, the security of Hongkongers in regards to their personal finance decreased from 61 in Q2 2018 to 57 in Q2 2019 - compared to 70 in APAC within the same period. Hong Kong's purchase readiness has also dropped, going from 54 in Q2 2018 down to 51 in Q2 2019.
"To relieve the difficulties ahead, some brands might choose to increase product and service prices, but it 's hurting the customers, commented Ranjeet Laungani, senior vice president, regional media leader at Nielsen.
While Hong Kongers remain pessimistic about the economy, brands and marketers are spending less on advertising and been resistant to launching marketing campaigns. From June to August 2019, ad spend decreased by more than 10% compared to the same period in 2018. And from June to September 2019, the number of digital campaigns monitored by Nielsen was 56.4% down compared to last year.
"These figures showcase that advertisers were reluctant to invest in marketing campaigns during uncertainties. They are not keen to advertise amid the turmoil," said Laungani.
Rather than slashing output, one solution to enhancing campaign performance is simply optimising the budget. Campaigns can be optimised across any dimension, namely creative, placement, site, content, segment, and platform.
"Marketers need to optimise reach and frequency of their campaigns. An efficient marketing campaign should reduce the waste of media and serve on the right platforms to the right audience," Laungani commented. "Waste is no longer affordable."
For brands and marketers, it's also advised that they take the initiative under these circumstances with personalisation. And though that is hardly a new concept to marketers, limitations in their knowledge of customer behaviours remains an obstacle. It is third parties that control a huge amount of the consumer data that's out there, and they don't like sharing it. To gain access to customers, brands have become reliant on tech giants such as Facebook and Google.
Yet, even with that hurdle, Laungani insists brands still need to seek access to more data to understand their customers. On top of the first hand data available to brands, an alternative source is the data companies, particularly those with insights on psychographic data. Psychographic data is produced by following the online journeys of customers and the reveal of character through behaviour. These provide clues to sending them relevant messages.
"Demographic data could provide you with some basic information but things could go wrong, but psychographic is the key to disseminating personalised messages," said Laungani .
To learn more about customers in a more accurate and faster fashion than the norm, brands can also plump for adaptive learning which immediately reacts to a changing environment. This is in comparison to batch learning, which analyses large data sets 'in a vacuum'.