August 15, 2022

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Technology Forever

General Mills, Pepsi, and P&G on how advertising will change in 2021

  • The pandemic has upended the advertising industry and accelerated existing trends.
  • 11 CMOs from companies like General Mills and Procter & Gamble discussed how the changes will continue into 2021.
  • They’re emphasizing e-commerce, flexible ad production, and increasing their focus on purpose.
  • Visit Business Insider’s homepage for more stories.

The economy may be inching toward a recovery, but the pandemic has had some lasting impacts on advertising trends.

Insider asked 11 top marketers including General Mills’ Brad Hiranaga, P&G’s Marc Pritchard, and Verizon’s Diego Scotti how these changes will impact advertising in the long term. Certain themes came up again and again: Big-budget ad productions are over, e-commerce has become a mainstay, and tying themselves to issues people care about is more important than ever.

Ad production has been overhauled 

Mandated quarantines and social distancing during the pandemic meant that brands had to make do with skeleton crews or get creative in producing their ads. 

Hulu used VFX technology to superimpose athletes’ expressions onto their body doubles during post-production, while Chipotle used old footage to create its ads and directed food ad shoots over FaceTime. 

Read more: The world’s top advertiser is ditching the upfronts and said it would continue to do more direct media deals, adding to TV and ad agencies’ pain

Chris Brandt CMO

Chipotle CMO Chris Brandt

Chipotle


These changes will likely outlast the pandemic, said Chipotle CMO Chris Brandt.

“The days of extravagant production shoots are numbered as the content being produced by smaller crews in an intimate setting is connecting as well or better with consumers today,” said Brandt. “I love the flexibility this provides and the opportunity to do more experimentation and be more real time.”  

Chipotle also built a new production studio at its headquarters in Newport Beach, Calif., for the same purpose, and  used it for commercials like those touting new items like cauliflower rice. 

Read more: Chipotle’s digital sales grew 81% during the first quarter even as foot traffic plummeted. Its chief marketing officer reveals how the company got there.

“The cultivate studio has not only enabled us to continue production during the pandemic, but do it more economically than we could anywhere else,” Brandt said.

Advertising giant P&G collaborated with TV networks and media companies directly to produce 15 initiatives in 100 days. This has led to a “constructive disruption” in how P&G approaches production with fewer resources, according to Pritchard.

“It has changed the speed, cost and the way in which we get advertising produced,” he said.It’s actually elevated our creativity.”

Brands are spending more on digital media

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Peloton SVP and head of global marketing Dara Treseder

Peloton


Digital ad spend in the US is poised to grow by 14% and account for 54% of all ad dollars in 2021, according to GroupM.

Pepsi CMO Greg Lyons said that the brand is spending more in e-commerce, gaming, and streaming advertising.

“Agility has become even more important in how we operate as marketers and leaders as 2020 has proven that the world can change in an instant,” he said. “As a result, our media investments have shifted more to digital, where it’s easier to target people with the right message at the right time.”

Read more: Pepsi’s CMO reveals how the company is shaking up its advertising, demanding more flexibility from its agencies, and prioritizing e-commerce and data amid the pandemic

Digital advertising has become a growing priority for Walgreens, said SVP and CMO Patrick McLean. The company revamped its myWalgreens platform to be atune to customers’ behavioral shifts and expectations, he said. 

Brands are also preparing for privacy developments like Google phasing out third-party cookies. Peloton is using tags on its own app to gather first-party data and target people with tailored messages, said its SVP and head of global marketing Dara Treseder. 

“First-party data is a party you don’t want to miss — it is so important that we continue creating opportunities that enable us to learn more about our customers,” she said. 

E-commerce has become a mainstay

LOREAL_LUBOMIRA ROCHET_COPYRIGHT STÉPHANE GALLOIS (2)

L’Oréal’s chief digital officer Lubomira Rochet

L’Oreal


People spending more time indoors has boosted online shopping, making it a growing priority for marketers. 

General Mills and L’Oréal have moved ad spend to e-commerce platforms like Amazon and are investing in driving digital traffic to their own websites.

“E-commerce will have dramatic consequences on marketing overall,” said L’Oréal’s chief digital officer Lubomira Rochet. “Technologies like live streaming, gaming and social commerce will transform how marketing is done.”

She said that L’Oréal has extended its try-on technology ModiFace across 15 other sites and apps, including Amazon, YouTube, and Google Search. It’s also doubling down on social commerce and bought the platform Replika Software, which lets influencers, makeup artists and hairstylists that use its products to sell them directly to people online.

Read More: L’Oréal is banking on influencers and try-on technology to cash in on online sales — and it’s made up for half its pandemic losses

Others like Hershey are increasingly embracing shoppable ads, which have started becoming popular across platforms including Instagram, Pinterest, Snap, and Verishop. 

“The pandemic changed everything — we changed our ads, made them shoppable, and changed how we produced them,” said Hershey CMO Jill Baskin. 

Brand purpose has become front and center

Company statements on hot-button issues reached a fever pitch in the wake of the death of Black Lives Matter protests and raised the bar on their purpose-driven initiatives.

Read more: ‘It’s reached a tipping point’: Brand experts say that companies speaking out on hot-button issues has reached a fever pitch in the wake of the death of George Floyd

“Now is not the time for brands to be spending millions of dollars on glossy, celebrity-fronted ad campaigns — communities are hurting, frightened, lonely, and financially challenged,” said Jonathan Mildenhall, CMO at fintech brand Dave. 

Brad Hiranaga

General Mills chief brand officer Brad Hiranaga

General Mills


He pointed to Headspace giving away its service to 40 million unemployed people and Dave donating “hundreds of thousands of dollars each month” to feeding American families as examples of brands that are leaning in to help communities.

Citi has spotlighted gender pay, the leadership gap, transgender, and non-binary people in ad campaigns like “The Moment” and is pushing for more diversity at its ad agencies.

“After a year in which the world around us has undergone extraordinary upheaval, brand purpose has never been more important,” Citi CMO Carla Hassan told Insider. “Now is not the time to be a bystander, it’s the time to step up and enable progress. It’s time to use our balance sheets for good.”

Verizon CMO Diego Scotti and General Mills chief brand officer Brad Hiranaga made similar points. Verizon’s 2020 initiatives included “Pay It Forward Live,” aimed at small businesses; and a remote learning program called “Verizon Innovative Learning.”

At General Mills, the idea is to make an impact with brands like Betty Crocker helping younger people build confidence in the kitchen.

“We’ve accelerated to show up in more intentional ways – helping to solve real problems and bring joy to people during these uncertain times,” he said. “We remain focused on showing up with deeper empathy and offering meaningful experiences that people want and need.”