What a long, strange year in digital marketing

“It has been a strange year, because there are bright spots. We’ve gotten a tremendous tailwind for our business, because people are moving online and learning about new marketing strategies. But at the same time, this is a very hard time for our customers and our employees. So there’s a strange mix of bright spots and really dark moments in this year.”

The words of Meghan Keaney Anderson, HubSpot’s VP of Marketing, and how true they are. Both in B2B and consumer marketing, the first three quarters of 2020 were a rollercoaster, created immense challenges which some brands overcame, and to which some succumbed.

As we move into Q4, into the holiday sales season, and into an uncertain future, it seemed a good time to look back. We spoke to Anderson, as well as to Taylor Schreiner, Director of Digital Insights at Adobe (where the regularly updated Adobe Digital Economy Index is created), and Craig Rosenberg, co-founder and Chief Analyst at Topo, with a focus on B2B.

When the crisis hit

“The crisis hit, the WHO declared it a pandemic and an emergency, and it was literally days before we were about to have a major product launch for our new CMS hub,” said Anderson. “We had a full-on promotion plan, and we made the call as soon as we heard that to just stop. We released the product but did a quieter launch.”

Based on Adobe’s tracking of consumers’ digital activity, Schreiner told us: “Apparel outstripped overall eCommerce growth early on, in that April to May time frame. People were not buying work suits, or even clothes to go out in, they were buying a decent shirt and a pair of pajama bottoms so they could go on Zoom. With groceries, not only did we see an increase in grocery sales, but new shoppers came onto grocery sites in a big wave, taking some time to learn how to grocery shop on line, then becoming adapted and shifting into more of a habit of online grocery shopping.”

In B2B, many verticals were confronted with the necessity of accelerating their digital maturity: in some cases, that just meant accelerating changes already underway. Said Rosenberg, “Construction is a perfect example. There’s a construction tech stack. There are unicorns like Procore in Santa Barbara that is a five billion dollar valuation company.” Procore offers construction project management software. “That transformation was happening already and was just accelerated,” he said. “We’re hearing reports from sales and martech vendors that are saying, we’re getting verticals we had no idea would buy from us.”

Rosenberg cites the assessment of Microsoft’s Satya Nadella: two years of digital transformation in two months. “I’m hearing reports on transportation as well, tons of innovation there. It’s been exciting to watch, it’s been just transformation everywhere.”

But the transformation meant some companies falling by the wayside. “Some have been able to really accelerate innovation during the crisis, but we have also seen other industries and companies that weren’t able to do that and were hit really hard,” said Anderson. “We see that globally and within our own customer base. We forget that not every business has been online. There is this long tail of businesses who don’t operate that way; they haven’t had to. Not just mom’n’pop shops, but we’ve even seen major consultancy firms, which did most of their business face-to-face, needing to figure out an online set-up. That’s the story of the year: the last breath of long-tail businesses that weren’t online are now online.”

Sales down, marketing up

“We certainly saw sales pause across not just HubSpot but all industries,” Anderson continued. “The world took a collective breath. What we were surprised by was that we saw marketing activity really rise. We saw huge records being broken in terms of website traffic, not just to our site but to our customers’ sites. We saw giant leaps in engagement with our free educational materials. We saw email open rates go up, and we also saw big spikes in website chat for our customers.” These observations were based on HubSpots’ 70,000-plus customer base.

“That dichotomy between sales slowing down and marketing having a ton of engagement created the tenor of the summer,” Anderson said. “The fear was that customers would just go away – but that didn’t happen. What happened was they went home, for sure, but then they reached out. They consumed content. They were engaged in different ways, but certainly engaged. Companies that have been able to adapt to that, and learn from that interest, and change their content strategy a bit to match it, have done okay and in some cases well.”

In B2B, the trajectory for sales has been dependent on what is being sold. “I look at sales and martech vendors, and what’s selling are things that have impact right now,” said Rosenberg. “It’s not surprising. Big long-term decisions aren’t really happening. People are making fast, pay-me-right-now decisions. That’s where we’re seeing sales and martech vendors hitting their numbers, doing really well.”

The whole process has speeded up. “Buying cycles have been faster, with fewer decision makers. There are people who are buying and people who are not; it’s binary, there’s no middle ground. Those that are buying are making top-down decisions to transform, and they’re doing it really quickly.”

Going forward expect successful B2B go-to-market strategies to be attuned to rapid change. “That was already happening,” he said, “but the rate has been accelerated in a way that was really extraordinary. Everything changed in a second. You blinked. It’s hard to know what will happen a day from now, so what you build going forward from a strategy, people, process and technology perspective has to be virtual and agile.”

In the digital commerce space, good customer experiences boost conversions — another trend that was evident last year, but has taken off like a rocket. “When you are buying things that are crucial to your life online, the online shopping experience becomes that much more important,” Schreiner explained. In the past, a consumer making occasional purchases, like a specific gift, has been willing to be frustrated by shopping experiences. Now, however: “You can’t tell me you’re not going to have my kids mac’n’cheese or sandwiches for lunch tomorrow; I can’t have a bad experience in that process, because that’s important.”

Adobe has data-driven evidence for this, for example from the grocery sector. “Consumers were tolerant early on, and were completing baskets even when they spent long periods of time on websites figuring them out,” said Schreiner. “But we rapidly saw everyone move towards faster shopping experiences, in part because that’s all they were willing to tolerate. In the B2C world, the consumer experience is increasingly important, and we’re seeing a lot of competitive pressure on those experiences.”

Is change here to stay?

All of us have lived through changes as consumers, as well as changes in how our companies or organizations do business. But which of those changes are transient, and which are here to stay?

For B2B, Rosenberg is betting on a combination of old and new normals. “The pendulum has swung, right? There’s been a lot of really cool innovation, but I have no doubt that as things straighten out we will end up in more of a hybrid approach. Will we continue to integrate some of the old things we used to do? Sure, because nothing replaces handshakes and face-to-face communication, but I do think people have been hugely successful right now with digital, so they’re excited about it. But it’s about what the prospect or buyer wants to consume.”

Rosenberg hesitated to forecast the future. “Can you imagine trying to figure out what Q1 of next year is going to look like? [B2B purchasers are] making decisions to survive for three months. That’s what’s driving buying. If you’re in the eCommerce software market, your customers are trying to make money tomorrow. They don’t have time for a twelve-year roll out of anything.”

But businesses are buying. “Enterprise deals are going through, medium to small business has really slowed.” Rosenberg observes vendors focusing on highly targeted ABM: “Moving teams around, doubling down on content – you’re going to have to live like this going forward. We’re learning how to be versatile, and going forward it’s hard to see the end of the chaos, and you have to be able to adjust and go with it.”

Not only ABM, but the sales and marketing alignment that supports it, is becoming ever more critical. “Alignment. We’ve all been talking about it for a long-time, but now you have to do it. Everyone had to put down their swords, get in a room and figure it out together. Usually when things go badly alignment suffers. Now we’ve got our backs against the wall and it has brought people together.”

Too early to call

In the commerce space, the jury is still out, said Schreiner. “What we’re seeing is a shift to a new normal, and what we’re all wondering is what that new normal will be in terms of online commerce. In March and April, everyone was going online – maybe for the first time – to buy clothes, pajamas, groceries – things they would normally have gone into stores for. We saw online sales rocket up 80% [year on year].”

But that didn’t hold. “We’ve seen that come steadily down through July, August and September,” he continued, “to where we’re more in the 30 to 45% range depending on the day. The question we’re all asking ourselves is, is this the new stable place – at least for this phase of the COVID era?”

Schreiner is not looking far ahead. “Our time horizon, at its furthest, probably extends out to the middle of next year, when you think about what consumers are going to be doing.” The availability of a safe and effective vaccine, of course, would change everything, but consumers do seem to have settled into making online purchases of staple goods they would normally have purchased offline. “This seems to be reasonably consistent over time, but it’s a bit early to call this a new normal,” he said.

Happy Holidays?

Would the Q4 cluster of big digital sales and marketing days bring joy — reflecting increased online engagement — or despair, reflecting economic anxiety? Nobody was willing to place a bet (these conversations took place before Amazon’s Prime Days).

“Bankrupt or gangbusters?” Rosenberg echoed. “I understand that everyone’s buying stuff — I have boxes coming every day. I only have questions, not answers. The baseline is so high for some of these folks, like Amazon, how can we have a holiday bump? How can we buy any more?”

“We’ve been through a period for the last several years of a highly stable macro-economic environment, and we’ve gone from that to an unprecedentedly unstable environment,” responded Schreiner. “It’s very hard to predict with precision what’s going to happen. The biggest question in my mind is, how bad is the personal employment and disposable income situation going to become?”

Labor Day did not bring good news for brands, but that might not mean much, Schreiner said. ” My hypothesis around Labor Day is that it’s not the right holiday. Nobody is going out and buying a new barbecue; a lot of the things you would do with a Labor Day event weren’t happening. So I think it’s a bit of an outlier.”

For the holiday season, expect sales days to continue to spread in the calendar. “It’s a trend that we saw even before COVID. Last year we saw some unusually strong purchase behavior in Thanksgiving week — so before you start to hit the Black Friday time-frame. That was somewhat driven by retailers, as prices came down earlier. Now we’re seeing some retailers say, we’re going to have a month of this. It’s not just to acquire market share, but to manage timing and expectations of delivery when supply chains are so constrained.”

Anderson made clear that there isn’t just one answer to our question: “I know that this is an uneven crisis; it is hitting some people harder than others. People have talked about a ‘K-shaped’ recovery, with some people doing phenomenally well coming out of this, and sadly some not. I think that, in order to answer your question, you need to think, holiday sales of what? For some industries, they will do great; they will see sales and recovery, for others not so much.”