October 14, 2020
This year has been chock full of bombshells. By now, most of us are numb to whatever unexpected thing comes up next. But there are a few surprises for marketers that have flown under the radar.
Here are three of them:
1. Private markets are booming
Wait, isn’t the economy in a spiral? More than 100,000 small businesses have closed forever. There’s no question small businesses face one of the toughest roads ahead. The wreckage on corporate America includes big brand retailers, restaurant chains, travel companies and movie theaters. Millions of jobs have been lost, many permanently.
Then there’s this silver lining from PwC and CB Insights’ Q3 2020 MoneyTree report: Venture capital investments to U.S.-based companies hit a seven-quarter high in the third quarter this year to $36.5 billion, up 22% year-over-year. This is also up 30% from the second quarter. (Deal activity, however, is still down 11% year-over-year amid the pandemic.)
Total global funding spiked in the third quarter, too, rising over 40% compared to the second quarter. Funding to startups in Asia increased 74%. All tallied, North America, Asia and Europe saw combined funding of $71.9 billion in the third quarter — a historical record!
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So what’s happening?
The pandemic has reset the game board, with consumers shifting to brands that serve up a great digital experience. McKinsey Consulting found that one out of three Americans is actually changing brands. Now brand leaders are forced to regain lost ground, while brand laggards willing to act quickly, decisively and boldly have a chance to lead.
This has led to an opportunity for agile, venture-backed startups to unseat incumbents. SoftBank, for instance, invested $215 million in education start-up Kahoot, as the pandemic opened the floodgates to e-learning.
“In a moment of great uncertainty, we expected a flight to familiarity and trust with consumers sticking to brands they had used, but we actually saw the opposite,” Brian Gregg, senior partner at McKinsey & Company, Americas leader in the Marketing and Sales practice, told CMO Council. “For many brands and companies, this is a unique moment to increase their share and relevance with consumers.”
2. Small cities see big gains
Work-from-home policies put in place during the pandemic might have some serious staying power, which is upending where people choose to live. Twitter and Facebook said employees can work from home permanently. Salesforce, Apple and Google extended work-from-home policies into 2021. The mass exodus from San Francisco has sunk once-sky-high rent prices — cratering up to 31% — as remote workers with good salaries head to suburbs and small cities.
Net new arrivals in San Francisco and New York City are down by more than 20%, and down 10% in Seattle, Boston and Portland, according to new city migration data from LinkedIn’s Economic Graph team.
Where are people going? Net new arrivals are up in Jacksonville, Fla. (10.7%), Milwaukee (4.5%), Salt Lake City (9.6%), Sacramento, Calif. (7.6%) and Kansas City, Mo. (3.9%).
It’s anyone’s guess when and if people will migrate back to the big city. Already, though, Bay Area transplants are bringing a housing crisis to small towns such as Tahoe City, Calif., where home prices have increased by more than 30% compared with last year. In Truckee, Calif., almost twice as many homes have been sold year-over-year.
3. Marketers make moves
Given mounting job losses and shrinking marketing budgets, you’d think CMOs would stay put, at least in their careers. But this isn’t the case. According to Russell Reynolds, CMO job shifts in the first six months of 2020 were both higher than the same period last year and in the second half of 2019 when the economy was booming.
All tallied, there were 243 publicly announced marketing executive moves in the first half of this year, up from 209 in the first half of last year. Many of them are jumping to tech companies. Russel Reynolds Associates reports that the percent of tech marketing moves versus all other moves has more than doubled.
Overall, 75% of CMO appointments were external hires.
“At the height of the pandemic, between April and June this year, that number jumped to 80%, as more companies looked externally for new skills to adapt to rapidly changing consumer behavior,” Russell Reynolds says.
Tom Kaneshige is the Chief Content Officer at the CMO Council. He creates all forms of digital thought leadership content that helps growth and revenue officers, line of business leaders, and chief marketers succeed in their rapidly evolving roles. You can reach him at email@example.com.
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