• by Ray Schultz , Columnist, June 30, 2020

Brands are spending more on marketing during the COVID-19 pandemic. They are driving innovations and channel shifts -- many of them permanent -- and a stronger focus on the customer. And email is one of the big three in terms of increased budgets, according to Customer Engagement Report, COVID-19 Special Edition, a study released on Tuesday by Merkle. 

Of the companies polled, 51% have significantly boosted their email spend. That puts email only behind site/mobile chat (56%) and mobile app functionality (55%), excluding volume costs in each case.   

Of course, 16% are decreasing their email allocations. But that’s nothing compared to the 23% apiece who are cutting their spending on video, site functionality enhancements and SMS/MSS. Email budgets will remain flat for 33%.  

Despite flatlining and cuts, significant hikes are also being posted for video (50%), DMP (47%), marketing database (47%), implementing cross-channel programs (46%), digital asset/content management (45%), site functionality enhancement (44%), CDP (42%) and SMS/MMS (42%).  

Overall, 52% have increased their marketing spend since the COVID-19 outbreak, the study notes.  

Then there are the technology investments that must accompany channel advances. “When comparing these insights with the likelihood of replacing technologies in the next two years (below), we can assume that investments in chat and mobile are more temporary — while current investments in email platforms are more permanent,” the study states. 

Of the firms surveyed, 30% say it is very likely they will replace their email technology in the next two years. And 34% are somewhat likely to do so.

In terms of great likelihood of a tech change, email ranks behind marketing database (35%) and CDP (32%) and is tied with mobile app, DMP, site analytics and content/digital asset management.

Merkle surveyed 400 U.S. and UK brands in the retail, consumer packaged goods, high-tech, financial, travel, media, entertainment, health, insurance and nonprofit fields.  

For one thing, it found that 74% of brands have changed their approach to customer content.

In addition, it determined that 70% in the health field have increased their marketing outlay in response to the COVID-19 pandemic. So have 60% of insurance brands, 59% of retail, 53% of travel, media & entertainment, 50% in the other category, 49% of financial firms, 48% of high-tech and 17% of nonprofit.

They have also introduced these innovations:

• Try new marketing technologies or features — 50%
• Become more consumer in marketing messaging — 45%
• Develop new transaction fulfillment capability — 42%
• Add a new marketing channel— 39%
• Leverage new creative development or deployment strategy — 37% 
• Develop new analytic models — 37%
• Add a new customer service channel — 35% 
• Identify new audience — 33% 
• Connect channels — 25%

Moreover, 96% say these innovations are here to stay.

But it’s not easy. Companies face the following disruption pain points:  

• We take too long to a marketing decision — 46%
• Data are in too many places to be useful — 43%
• We don’t leverage the data we have — 38% 
• Our channels aren’t coordinated — 36% 
• We’re organized in an inefficient way — 34%
• We can’t share content and images across channel — 33% 
• We rely on agencies too much — 30%
• We don’t have a content strategy for our customers — 30%
• We don’t have a plan — 11%

Finally, in perhaps the most critical change, 54% say communicating with customers is significantly more important and 37% say the same about prospects.