By Charles Ansdell is a Managing Partner at Newgate Communications specialising in Financial Services, Tom Flynn, Partner – Digital, at Newgate communications
It has become a bit of a cliché to talk about how much the world has changed since the Covid-19 pandemic began, but the scale of change is unprecedented in the modern era. Lockdown has accelerated trends that would have taken years – online delivery increased by the equivalent of ten years growth in eight weeks. Online entertainment signups have advanced seven years in five months – in part due to the instant success of Disney Plus but also established platforms such as Netflix. The number of people using videoconferencing is twenty times what it was in March.
Average time spent online rocketed throughout the Spring across all age groups and although this has reduced again, it is still higher than pre-Covid levels. News websites have seen traffic returning to levels last seen in January and February, which suggests that online news has lost market share in terms of overall time online. Online behaviour has changed.
Social media appears to be one of the main beneficiaries of this. In the UK, digital reach of social media channels has remained above pre-Covid levels. The most startling example of this is TikTok, which is one of the great success stories of 2020, gaining millions of new users. But other platforms such as WhatsApp and Pinterest have also seen significant growth. Facebook’s reach is already so massive that its percentage growth can look unimpressive – but in the UK alone it has added 800,000 users since January. Where there are winners, there are losers too: Snapchat looks to have declined significantly in recent months. Houseparty’s glory days were short lived. Instagram’s flatlining user base may look bleak but its reliance on strong visual imagery meant that it was unlikely to grow in lockdown – who wants to see pictures of people sitting at home on a platform that thrives on holiday snaps and glamorous locations? It will bounce back if travel and leisure time starts to return to normality over the coming months.
But what about print media? From furloughed staff and altered business models (City AM, London Evening Standard) to significant redundancies (Daily Mirror, Daily Express, Manchester Evening News) to closures (Moneywise, Money Observer), the pandemic has accelerated the decline in print media. Some of it will, of course, survive, but for many this will mean a move to online-only publication.
The changing landscape demands a re-focusing of communications strategies. Earned media – where companies engage with journalists and influencers – must be integrated more tightly with multichannel marketing campaigns. Owned media (the channels that a company controls), especially social media channels, will play a more important role.
Social media – the opportunities ahead
Why should banks’ communications strategie involve a greater focus on digital channels? In the past, the financial services industry has been reticent of using social media channels, citing concerns over the restrictions of the financial promotions order and the febrile, “wild west” nature of some social platforms. This, coupled with the reputational challenges the industry faced after the 2009 financial crisis, had put off wholesale adoption in the industry.
However, that has changed in recent years. For a start, the sheer scale of social media has made it impossible for many organisations to ignore, recognising that they need to communicate in the channels that their audiences use. There are 45 million social media users in the UK, but coverage depends on the age of your target audience – 97% of 16-24 year olds use social media but only a third of over 65s. 70% of UK adults used social media platforms in the past month and 49% used them to consume news.
Facebook claims that 27% of all mobile time is on their platform, with an average of 14 checks per day, and a reach of 4x that of all national newspapers put together. Twitter has a smaller user base (13m in the UK) but hosts the opinion formers there – the journalists and commentators. And LinkedIn is increasingly part of the mix when you want to talk directly to people in your industry.
But it is more than just part of the communications mix.
While the financial promotions order means that many financial services companies may not sell or market directly on social media, there are other potential use cases. Increasingly, channels such as Twitter are a valuable customer service tool, empowering companies to communicate at lower cost than contact centres and with digitally native audiences.
Social media can also provide important behavioural insight and data, allowing financial services companies to better understand their audiences – their beliefs, what they’re interested in, what content they like. In turn this can be used as a feedback loop to let companies test new products and services, as well as messaging and branding.
It can also act as a barometer of how a company is doing in the eyes of its audiences – a reputational “canary in the coalmine” that allows companies to understand perceptions of their brand.
Increasingly it can be used as an amplification and retargeting tool, allowing financial services brands to buy “audiences” and reframe, recycle and repurpose their existing content and messaging in front of new – or better targeted – audiences.
This approach can supercharge existing communications strategies, increasing the reach and targeting of media relations and stakeholder campaigns.
Despite this, social media can’t entirely replace traditional media relations. Trust in social media content is low, and over 50% of users claim to restrict their settings to prevent some targeted digital advertising – which means that companies can’t rely on paid social alone to reach their target audience.
Press coverage in credible publications remains a gold standard and helps to build trust in company social media channels. Articles and opinion pieces can be a compelling source of social media content and give a third-party affirmation to social audiences alongside company published content. This in turn can be amplified to audiences outside of those who read a given publication.
With fewer publications, fewer pages and fewer journalists in traditional outlets, companies are increasingly putting their media coverage to a wider audience of key targets – whether the opinion formers of Twitter, the industry leaders on LinkedIn or the wider public on Facebook. Social influencers – who can provide humanity and relatability to financial services brands – also have a role to play, though they haven’t had the same impact as they have in fashion or travel.
Even financial services companies that have adopted social communication strategies may find that current approaches are not effective. The world has changed and what worked in February won’t be the optimal strategy now. Companies used to target the ‘commute to work’ social media post in the morning. Now it’s gone. People are starting work earlier, blending work and personal life, which means companies can’t rely on old rules for targeting.
In turn, companies must increasingly structure their organisations to respond to the challenges of digital and social media communications. Companies typically might consider social to be part of the advertising and marketing or communications functions or possibly a separate entity. As social becomes a more integral to their customers’ day-to-day life, companies will have to integrate their digital, marketing and communications approach. Ultimately all companies – be they financial services or not – need to be where their clients are. The pandemic has accelerated what was already a strong secular trend towards social media use. Companies must now act quickly, enabling them to capitalise on this new reality and the opportunities it brings.
UK delays review of business rates tax until autumn
LONDON (Reuters) – Britain’s finance ministry said it would delay publication of its review of business rates – a tax paid by companies based on the value of the property they occupy – until the autumn when the economic outlook should be clearer.
Many companies are demanding reductions in their business rates to help them compete with online retailers.
“Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances,” the ministry said.
Finance minister Rishi Sunak has granted a temporary business rates exemption to companies in the retail, hospitality, and leisure sectors, costing over 10 billion pounds ($14 billion). Sunak is due to announce his next round of support measures for the economy on March 3.
($1 = 0.7152 pounds)
(Writing by William Schomberg, editing by David Milliken)
Discounter Pepco has all of Europe in its sights
By James Davey
LONDON (Reuters) – Pepco Group, which owns British discount retailer Poundland, has targeted 400 store openings across Europe in its 2020-21 financial year as it expands its PEPCO brand beyond central and eastern Europe, its boss said on Friday.
The group opened a net 327 new stores in its 2019-20 year, taking the total to 3,021 in 15 countries. The PEPCO brand entered western Europe for the first time with openings in Italy and it plans its first foray into Spain in April or May.
Chief Executive Andy Bond said its five stores in Italy have traded “super well” so far.
“That’s given us a lot of confidence that we can now start building PEPCO into western Europe and that expands our market opportunity from roughly 100 million people (in central and eastern Europe) to roughly 500 million people,” he told Reuters.
To further illustrate the brand’s potential he noted that the group has more than 1,000 PEPCO shops in Poland, which has a significantly smaller population and gross domestic product than Italy or Spain.
The company, which also owns the Dealz brand in Europe but does not trade online, has already opened more than 100 of the targeted 400 new stores this financial year.
Pepco Group is part of South African conglomerate Steinhoff, which is still battling the fallout of a 2017 accounting scandal.
Since 2019 Steinhoff and its creditors have been evaluating a range of strategic options for Pepco Group, including a potential public listing, private equity sale or trade sale.
That process was delayed by the pandemic, but Steinhoff said last month that it had resumed.
“The business will be up for sale at the right time. It’s a case of when, rather than if,” said Bond, a former boss of British supermarket chain Asda.
Pepco Group on Friday reported a 31% drop in full-year core earnings, citing temporary coronavirus-related store closures.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were 229 million euros ($277 million) for the year to Sept. 30, against 331 million euros the previous year.
Sales rose 3% to 3.5 billion euros, reflecting new store openings.
($1 = 0.8279 euros)
(Reporting by James Davey; Editing by David Goodman)
Fashion-focused livery launch reveals new colours for Gasly, Tsunoda in 2021
Scuderia AlphaTauri debuted their colours for the 2021 Formula 1 season as drivers Pierre Gasly and Yuki Tsunoda unveiled the team’s new look with the livery for their AT02 racecars. The setting was a fashion-forward launch in the all-new showroom of AlphaTauri, Red Bull’s premium fashion brand.
Salzburg (AUSTRIA) – Formula 1 team Scuderia AlphaTauri served up a stylish preview of the new F1 season with a presentation of its 2021 livery alongside key looks from the upcoming Autumn/Winter 2021 collection of Red Bull’s premium fashion brand, AlphaTauri. The launch – held at AlphaTauri’s new showroom in Salzburg, Austria and presented digitally – marked the first time that drivers Pierre Gasly of France and Yuki Tsunoda of Japan have appeared together as teammates.
After a successful first season racing in AlphaTauri colours, the Italian outfit is looking to challenge the top of the ultra-competitive midfield in 2021, and the two young drivers have been assigned clear-cut roles. Gasly is Team Leader. The 25-year-old, who made his Formula One debut with the team in 2017 under its former name, Scuderia Toro Rosso, has earned two F1 podiums. During the 2020 campaign, Gasly’s maiden win at Monza was a defining moment for him and the team under its new name.
Tsunoda, 20, is the first Japanese driver to race in F1 since 2014, his promotion coming off the back of a fast, four-season trajectory from winning the 2018 F4 Japanese Championship and finishing third in the 2020 FIA F2 Championship to entering the top-level ranks this year. Expectations are high for his rapid style of learning to complement the experience of Gasly.
“The decision to go for Pierre and Yuki in 2021 was taken because Scuderia AlphaTauri’s philosophy is still to give talented young drivers from the Red Bull Junior Program the opportunity to step up to F1 and to educate them – this is why Yuki now gets his chance,” explained Team Principal Franz Tost. “With Pierre on Yuki’s side we have an experienced driver, who can help our Japanese rookie to develop faster, but at the same time we can aim for good results. I think this pair is the best possible scenario to achieve both our targets, and I’m also confident this will be a successful one.”
In 2020, Scuderia AlphaTauri won best livery by a landslide, and the team’s all-new, matte blue and white racecar livery took center stage with the drivers at the fashion event, anticipating the 2021 model that will debut at pre-season testing in Bahrain on 12 March. The test is the precursor to an unprecedented 23-race schedule, and in preparation for the demanding calendar both drivers have spent time at Red Bull’s Athlete Performance Center for intense fitness testing.
“I’m ready to take on the role of team leader. Yuki is a very quick driver, and he will help us move the team forward – we will work together to achieve that,” said Gasly, the team’s all-time top points scorer. “I really believe last year was the team’s best in terms of the way it worked, the development, the performance and the way it managed the race weekends. I’m always hungry for more, and I’m sure we can achieve great things in 2021.”
Tsunoda, who was honored with the Anthoine Hubert Award for best Formula 2 rookie in 2020, added, “I’ve been lucky enough to spend some time with Scuderia AlphaTauri ahead of the season, so I’m already developing strong relationships and learning a lot from them – including Pierre, who is an incredible talent. My main goal is to learn quickly and deliver results as soon as possible, and I’m really excited to get started.”
The launch at the AlphaTauri Showroom not only gave Gasly and Tsunoda a preview of the AlphaTauri Autumn/Winter 2021 fashion collection, but the drivers had the chance to select their new off-grid looks ahead of the season start.
Ahmet Mercan, CEO AlphaTauri, summarized: “This is a triple reveal at a unique point of time: a new AlphaTauri Showroom where fashion meets F1, a first look at the AW21 AlphaTauri collection and the unveiling of the new Scuderia AlphaTauri F1 livery and driver pairing.”
Scuderia AlphaTauri fans don’t have long to wait for racing action: The FIA Formula 1 season kicks off at the Bahrain Test on 12-14 March, in preparation for the Bahrain Grand Prix on 28 March.
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