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Galjina Ognjanov, Professor Of The University Of Belgrade Faculty Of Economics

What In The Heck Do Customers Want?

The appearance of each new media form also has a significant impact on the way advertisers communicate with consumers, making communication with them increasingly complex. We can certainly expect the attention of consumers to be an even more limited resource than it’s ever been before, and that it will be even harder for advertisers to succeed in fighting to be noticed

Although it confined us to four walls and directed us towards numerous electronic devices, as the only shop window available to us, the pandemic hasn’t created a radically new type of consumer. On the contrary, the changes happening in marketing communication are constant and even occurred before the crisis, and will continue to occur after it ends, says marketing expert Dr Galjina Ognjanov, a professor at the University of Belgrade Faculty of Economics.

“During the initial emergence of the crisis caused by the covid-19 pandemic, we seemingly paradoxically took a backwards step, as there was a significant increase in levels of television consumption. This only confirmed the view that all media, both traditional and new, are equally important in marketing communication, while advertisers must follow consumers wherever they are at a given moment,” notes our interlocutor.

“So, today we are discussing the so-called customer journey, i.e., the journey taken by a consumer when considering the purchasing of some product and the advertisers who must endeavour to ensure that, during that journey, the consumer encounters their brand, and does so multiple times, and in different places. The radical change that has occurred implies that consumers increasingly consume different media in parallel, with their attention divided. Likewise, they are faced by different possibilities to avoid the advertising messages that companies send their way,” explains Ognjanov. “That’s why advertising is today increasingly assuming the characteristics of entertainment, socalled advertainment.”

In the context of communications, what differentiates the juncture in which we’re living from previous crises?

When discussing consumption and consumer habits, the current crisis differs significantly from previous ones. It wasn’t caused by economic collapse, nor were production capacities and other resources destroyed. When it comes to consumer behaviour, with the outbreak of the pandemic we saw queues in front of food shops and excessive shopping to create home stockpiles. Then an increase in online sales was recorded, and food delivery companies (applications) did particularly well. Simultaneously, upon the initial outbreak but also throughout the course of 2020, we saw consumers refraining from buying some other products, such as clothing, that we normally consume on a daily basis, when we head to work, go out on the town with friends etc. It initially seemed that employment insecurity would lead to a significant drop in consumers spending, and governments responded by giving money and/or consumer vouchers to help their citizens overcome the crisis. At the end of 2021, however, we seemed to be facing the opposite situation: demand had increased, citizens had disposable funds and a desire to shop re-emerged, but the amount of goods offered on the market was significantly lower, as a result of the market shocks caused by the pandemic.

There’s no doubt that advertisers and their agencies will be given increasingly challenging tasks and that, instead of consolidating and unifying messaging, there will be an insistence on the precise targeting of consumers

How have such changes influenced marketing communications at both the regional and global levels?

Changes in the behaviour of consumers – in terms of refraining from shopping, changing preferences and, a year later, the expressed desire to make up for lost time – have certainly been reflected in marketing communications. First and foremost, when it comes to the media market, in the first year of the pandemic (2020) we saw a fall in advertising revenues compared to 2019. This applies to Serbia and the other economies of the Western Balkans, but particularly to the markets of developed countries. This fall stood at 1.2% at the global level. However, it was slightly higher in Serbia, at around 6 to 7%. From the perspective of this period of time, it seems that this fall shouldn’t particularly concern us. In contrast, at the global level, we’d already observed a significant increase in revenues (of almost 20%) from media advertising across all media during the course of 2021. As was expected, the highest growth was recorded in the sphere of digital media. Given that Serbia, to a large extent, follows the trends of developed markets when it comes to marketing communication, it is to be expected that total revenues will continue to grow, while this growth will be the highest when it comes to digital media advertising.

Globalisation creates the possibility to reach a large number of individuals at the level of the whole world in a faster and easier way. Nonetheless, from the marketing perspective, I would say that this is still just one segment or one “target”. Apart from this market, regional and local markets still exist, and always will, but also micro-segments of consumers that will require the tailoring of marketing strategies, as well as marketing communications.

To what extent are lessons learned from the previous crisis – when savings were achieved through centralisation, exchanges of information, organisational learning and synergistic effects – applicable at this time?

Among other things, with the aim of achieving the savings you mention, the concept of integrated marketing communications has been developed within the scope of marketing theory. However, it became clearing during the practical implementation of this concept that integration is primarily essential due to growing media fragmentation. In a world of fragmented media, consumers have become elusive. The integration of marketing communications is today the most important condition to even reach consumers. That’s why it can even often be heard that classic advertising no longer exists, but rather has today given way to so-called content marketing.

Thus, the work of modern advertisers, or their agencies, consists of the production of content that will be positioned through so-called. POES, i.e., different categories of media: Paid, Owned, Earned and Shared. A significant role in this process is played by individuals, existing and potential consumers who participate in the creation of communications (co-creation) and their further transmission. But I wouldn’t say that all of this can lead to savings over the long run, on the contrary, because we’re witnessing a trend of growing advertising budgets, with the exception of occasional shocks (crises).

Artificial intelligence will certainly continue to develop and improve, but it’s equally certain – given the numerous ethical dilemmas – that the state will have to strictly regulate this area through the imposing of new regulatory solutions

For years we’ve been witnessing the restructuring of the budgets of marketing campaigns, depending on the type of media through which they’re promulgated. What future trends can we expect in this respect?

During the crisis caused by the covid-19 pandemic, we observed an increase in media consumption. I’ve already mentioned that growth was recorded in the case of television in particular, as a traditional medium that we’d previously concluded was slowly losing the battle against new online media. After multiple years of decline, the press also experienced a certain increase in the consumption of media content. Similarly, data on revenues from media promotions at the global level confirms that advertisers relied on traditional media to a greater extent in 2021 than in previous years, including television, but also print, which recorded its best growth figures in the last 10 years. That’s why 2021 is considered a record year, and it’s believed that such a successful year – in terms of revenues generated from media advertising – won’t be repeated in the near future.

On the other hand, as we know, a restructuring of media advertising budgets has been going on since the period prior to the pandemic. Significant reductions in the share of advertising revenues in the print media and on radio have been recorded for many years, while this reduction has remained significantly less pronounced in the case of television. Outdoor advertising has remained relatively stable, while intensive growth has been recorded in the digital sphere. Among developed markets, the share of investments in these media has already reached 63% of total advertising budgets and will continue to grow, albeit at a slightly slower pace. When it comes to Serbia, we’ve also observed a marked trend of growth in online media advertising, but television continues to have a dominant share in the structure of media budgets, accounting for 52% of total revenues from media advertising in 2020.

Do possible ideological/political differences impact on the choice of social media platforms through which the messages of advertisers are placed (considering the rise of TikTok, controversies over Facebook), and if so, how?

Where an advertising message will be placed is primarily decided on the basis of data from media research indicating what’s consumed the most by consumers, while ideological and political differences may impact on some advertisers refraining from advertising when they estimate that the image of a media outlet could have a negative influence on the image and reputation of the advertiser’s brand.

What kinds of ethical dilemmas do marketing companies face when using artificial intelligence? What future developments can we expect in this regard?

There’s no doubt that artificial intelligence, in general, represents one of the greatest technological achievements, which has brought numerous advantages in terms of the way various jobs are done and in the implementing of specific human tasks. The same applies to marketing, i.e., communication with consumers: AI has contributed to radical changes in the way consumer data is collected and analysed, thereby enabling more precise targeting and the personalisation of messages.

However, AI’s development is accompanied by a number of ethical dilemmas. In the area of marketing, the most important ethical dilemma relates to the way data is collected, stored, processed and exchanged, especially when it comes to personal data. Another ethical dilemma that’s no less important relates to the potential bias of AI algorithms, which can result in various forms of discrimination against individuals and social groups. Additionally, there are significant risks linked to the adapting of messages to an individual based on their personal characteristics and preferences. Thus, for example, a person who searches for information related to the treatment of serious diseases might be offered quasi-drugs, i.e., remedies for which no scientific evidence exists confirming their efficacy. This is a hugely important topic for policymakers and regulators worldwide.

DIGITAL

We’re moving towards the strong dominance of digital channels, which will have a more than 70% share of total advertising budgets by 2024

CONSUMPTION

It seemed from the beginning of the pandemic that a lack of job security would result in a significant drop in consumer spending, but it now seems that we’re facing the opposite situation

CAUTION

Artificial intelligence has contributed to radical changes in the way consumer data is collected and analysed, but its development is accompanied by a large number of ethical dilemmas

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