Changes In Consumer Behavior Require Changes In Sponsorship Activation

BY ADAM GROSSMAN

According to a recent MIT Technology Review post, even machines are not immune to the impact of Covid-19. More specifically, the virus has been “screwing” with machine learning models in ways that have important implications for advertising generally and sponsorship specifically.

Covid-19 has changed consumers’ purchasing patterns in significant ways as demonstrated by what they are purchasing on Amazon. More specifically, “the mainstays of Amazon’s top ten—phone cases, phone chargers, Lego—were knocked off the charts in just a few days.” In their place came searches for toilet paper, face mask, hand sanitizer, paper towels, Lysol spray, Clorox wipes, mask, Lysol, masks for germ protection, and N95 masks.

This dramatic change in demand for products is causing Amazon’s machine learning models to frequently not function correctly. As the MIT post states, “models trained on normal human behavior are now finding that normal has changed, and some are no longer working as they should.”

This dynamic environment has caused more human intervention into machine learning to address these challenges for good reason. The post features many experts stating that Covid-19 demonstrates that human and machine learning partnerships are required for the best outcomes. Such a combination of industry-leading expertise with best-of-breed technology is one big reason that our clients choose to work with Block Six Analytics.

One of the biggest outcomes of this human and machine learning pairing has led to an insight in how advertising can / should function on Amazon. More specifically, changes in what people are buying has led to a new insight in how companies should advertise on Amazon with a specific focus on how much to spend on ads.

Nozzle, a consultancy specializing in algorithmic advertising for Amazon sellers, analyzed the changes in the MIT post. It stated that machine learning algorithms in the past have looked at variables such as people’s past purchases and online user activity to determine if a company should advertise on an Amazon page.

Nozzle now found that the “best predictors of whether someone who clicks an ad will buy your product is how long you say it will take to deliver.” The implication for Amazon selling is that companies that have sought-after items in stock or know that their competitors have run out of stock can adjust ad spending accordingly.

Changing consumption patterns and advertising patterns like the ones seen on Amazon are a trend that sports rights holders (primarily leagues, teams, athletes, events, and media companies) need to watch closely. A concern that we (and others) have highlighted is that Covid-19 will change the types of companies that spend on sports sponsorship. 

However, Covid-19 should also change the way companies want to activate sponsorship to reflect consumer buying patterns. For example, if delivery times and in-stock items rather than past purchasing behavior or online activity maximizes future revenues then companies should look for properties that can engage their customers with these messages.

We can make this more tangible in a sporting context by looking at The Last Dance, the NFL Draft, NASCAR, and UFC. Each demonstrates the continued success of sports reaching record audiences in linear, social, and digital media channels during Covid-19. Digital signage or graphics in sporting events that dynamically changed to reflect the changes in consumption patterns and consumer preferences become increasingly valuable to advertisers.

How can sports properties identify companies that should see increased buying during the Covid-19 pandemic and how can companies identify potential changes in consumer preferences? B6A’s Audience Inference Platform (AIP) enables our clients to analyze the psychographic and demographic profile of any account with 900+ followers on Twitter.

This means that our clients can determine the keywords and topics of interest to their target audience. Sports properties can help current partners by looking at their owned accounts and their competitor accounts to determine significant changes / issues (such as delivery speed or the lack of items in stock). Companies can look at sports properties to determine which properties will best help them reach their target audiences.

Machines and people will likely be impacted by Covid-19 for the foreseeable future. That means sponsorship activation needs to change since consumers are shopping for new items in different ways. The sports properties and partner companies that can leverage the coupling of human insights with machine learning are the ones most likely to succeed in this environment.