Facebook's COVID-19 Consumer Trends Revealed [Interview]

Tony: Welcome back to the next edition of The Couch, as we deep dive into marketing and have a look at exactly what's trending in this new world that we're living in. 

So, joining me on the couch for this episode is Paul McCrory. He's the Group Industry Director of Facebook. We’ll kick off the interview by looking at some consumer trends – can you share a few that you're seeing within Facebook?

Paul: So, with what's happening with social media or the internet overall, we're definitely seeing a huge surge. I think in many affected areas, we're seeing internet usage double. And what we're seeing is that it's like every day's a weekend which is interesting. Also, another interesting thing is that it's across all demographics, which then of course creates some quite unique opportunities for marketers when they're trying to reach certain audiences, because a lot of older people are spending a hell of a lot more time there as well.

Getting into our services, in many ways, I think that we're seeing the platforms actually step up and get back to the mission of the business, which is connecting people, full stop, regardless if that's friends, family, groups, information around COVID. I believe that in times of crisis like this, we're starting to see social media networks be able to deliver on what the mission was, which is great.

In terms of when we're looking at the trends, the big trend is we're seeing a massive spike in video. Video calling via Messenger and WhatsApp is huge, both in user numbers and time spent. We're also seeing new applications come out of nowhere. We'll touch a little bit on some of the stuff we're doing later. So, that's good.

Another really big trend is groups. So, we're seeing fun use cases. We're seeing emotive use cases. And then we're seeing some really just practical use cases. So, on the fun side, you've got one group called the 'Bin Isolation Outing' group, which is people who are just bloody well pissed off that they can't get out of the house. And so, they're taking any opportunity they can to get dressed up and feel like they're having fun. Go to look at the group. It's creating that sense of relief and just humour really, when people are just trying to escape.

And the second trend, we're seeing a lot of groups in Australia at the moment being set up and people engaging with and just to try and help their communities. That one is Adopt a Mom and Pop, but it's properly a tear-jerker to be honest. It's when you've got older people who are vulnerable, not mobile, and just struggling through this. And these groups have been set up to try and get younger people, who are more mobile and can just do stuff, to go and essentially adopt a mom and pop, so adopt an older person in your community and help them. That's good to see as well.

Tony: Yeah, I think it's such an easy platform for users to use. 

Just going back to what you were saying before about video. I think people are obviously using live video a lot on Facebook now. There's more than 800 million daily actives.

Paul: Yeah, one of the things that we're trying to do as a business is to make sure that we are developing the right suite of services that can help people through this time. Some of that is just COVID-related. And some of it's more longer-term trends that we're seeing. 

We are seeing through our Portal device, or through just people calling via Messenger or WhatsApp on their phones, the amount of videos, the amount of video calling is just going through the roof. So, Messenger Rooms is a way to make that experience much easier, and that you can also connect with much greater groups of people directly when they're live. So, you don't have to schedule a call; you can just see if they're live. And then you can ping into a video call with them, which just is a much more natural piece of behaviour.

The other thing is that we're increasing the number of people you can have on WhatsApp from four to eight as well on a video call. And there's going to be other really cool things like enhancing the backgrounds within 360 backgrounds. So, you could be in Hawaii, for example, whilst you're sitting in Parramatta. And it's a 360 background that's moving just to make the whole experience much better.

Tony: So, how do we take some of that, Paul, from a business perspective and use some of these great facilities for customer communication? 

Paul: So, three big things we were finding from the industry were people, first and foremost, were trying to work out how they can keep their employees safe. Through this pandemic, people are at home. They're not as connected with their colleagues. People are worried about mental health and well-being and all that sort of stuff. And so, executives and CEOs within companies are really trying to work out how to do that.

But once that's kind of got into a better place, the next thing that people are really thinking about, from a marketing lens and from a business lens, is "How do you reemerge from COVID?" Some companies may not get through this. Some industries may not get through this. And many new competitors are coming out of the woodwork that didn't used to be in your competitive set before. And so, there's a real big need at the moment to work out how you can emerge post-COVID.

And then the final one would be, we're getting a lot of questions at the moment around "What role can our platforms and other tech platforms do to aid the emergence of COVID? But then once we get back to normal, what is the new normal going to look like?" And so, what do these technology platforms look like?

A couple of standouts for me. There's some funny ones. There’s a term called the lipstick effect, I think it was coined by an old CEO of the Estee Lauder group. . .but it's whereby people buy tonnes of stuff through GFC, through now, but they're not going to go buy the fur coat—they'll buy loads of lipstick or loads of smaller product.

And I think there was a stat then on Instagram, something like the amount of nail tutorials on Instagram is up 450%. So, people are going live to teach people to do things that they would typically get service from and do it themselves at home. And then obviously, there's cross-sell opportunities within that. So, cosmetic companies doing tutorials and then selling a product. There's all these really nice use cases, whereby people are trying to take your standard behaviour you want to have and bringing it into your living room behaviour, and then using that as a way to engage.

“People are trying to take your standard behaviour. . .and bringing it into your living room behaviour, and then using that as a way to engage.”

The industries, I think, that we've seen major, major spikes in include home fitness. We're seeing a lot there. A lot of the food delivery guys like HelloFresh and Marley Spoon, sometimes they're so inundated at the moment that it's really difficult to even keep up with demand. And so, people are trying to manage customer service alongside the huge demands that are coming there.

I think the most challenged industry globally is travel and tourism because we're seeing borders closed internally in the country. International borders will be closed for quite a while.

But out of that, one of the things I would say that has stood out for me in that industry would be, I think, the guys at South Australia Tourism. I would make a special mention to Brent Hill and the team over there. You had bushfires, then you had COVID. It's like a double whammy for an industry that's reliant on people going and doing stuff. And I think the term of the minute is that Australia needs a holiday. It just does. We all feel like we kind of need a bit of a break.

But one of the things they've done is they haven't sacrificed their creativity. They haven't sacrificed their guile and the amount of work they're putting into this stuff. And so, I think that they're coining it ‘living room tourism’. A good example would be we know that people cook at home. So, they're bringing a chef from South Australia to help people with cooking tutorials at home which then reminds those people about the destination. When they're ready to travel, guess what? You're going to go there. So, creative ways of thinking. How do you think about [adapting to] this consumer change? And bringing your brand into the living room so that when people are ready to leave the living room, they come to you.

Tony: Yeah and again, it goes back to that pivoting of trying to think about "How do we still keep front of mind with our brand for when things are back and open and to some kind of normality?" Tourism's an interesting one, as you mentioned. I know there's something like 1 in 13 jobs in Australia is related to tourism. So, it's such a big one.

There's other industries, I think, that are also kind of challenged. Obviously, the fitness industry. Peloton, that's doing quite well for indoor cycling around the world.

Paul: Yeah. Look, so, the Peloton one's super interesting. They had 23,000 people live-stream a Peloton spin class, which is the equivalent of half of the London marathon, on a spin class. It's unbelievable. Shares of the company have been up 30% in 30 days. 

Now, if you're at home doing your spin class and you've bought a bike that costs that amount of money and you're engaging with it and they've nailed it, you probably want to keep doing that. And so, in many ways, I think that you've got some people who are just kind of well-positioned for it, and then you've got other industries out there that are pivoting.

So, one of the bigger things for more traditional industries is "How do they transform into the digital world really quickly to try and capture people's living at home, working from home, isolation behaviour?" Otherwise, you might become totally irrelevant over time. And in many ways, COVID has done in a couple of months what people have been trying to do for many years because it's forced the world inside of their homes, which means that you no longer have access to physical things that you had before, which has meant that companies have had to go and invest really heavily to go and capture that person.

I think banking is a super interesting one there because the consumer now is more digital than ever. Services are available more readily. New competitors are bunching into the market. But when I deal with my retail bank now, I've always been dealing with them on my phone. But I have been conducting a new mortgage thing on my app and on the phone. Whereas previously, even I would have gone to the branch to do that. Whereas now, I'm not going to go to the branch; I'm going to do it on my phone. And so, that's a really good example where the banks are going to try and win the digital consumer.

Tony: Talking about retail banking, what about retail in general? Because retail has been hammered quite heavily with people not being able to go into the traditional shops. Myer, in particular, I think you found, have started pivoting towards e-commerce. What other trends have you found in the retail sector?

Paul: Look, there's no doubt. When consumer confidence is back and if people are at jobs and don't have as much discretionary budget, they don't buy the things that they used to buy typically. And so, that has a flow-on effect. Retail globally is getting a bit tough, to be fair. However, what they're doing is they're quickly pivoting their strategies to online. So, people still need stuff. People still are going to buy stuff. But the companies that are pivoting very quickly to online are the ones that will win.

I know there was an article from John [King] over at Myer in terms of how quickly they had pivoted their strategy and the uptake in online sales really quickly. So, they were having to get a lot of the people who would be in physical stores to be fulfilling the supply chain for digital, to fulfil actually the orders for digital. And so, that's a good example of a big traditional company being able to pivot quite quickly.

What is interesting though as well is that a lot of companies now that have been digital first or digital natives are now competing very, very, very directly with some of the more traditional guys. And so, there is a bit of a tug of war there. I think the companies that are more nimble and consumer-first will be the ones that will win through this. And some other companies may struggle at the end of it.

Tony: What about leadership, if we turn to that? So, the CEOs, the leaders of organisations that probably maybe have been a little bit socially shy in the past. How important is it for them to start using the platform more to get a strong message across, I suppose, of leadership?

Paul: Yeah, I think there's a bigger challenge, to be honest, which isn't Facebook-related. At the moment, if you go and look into the way employees feel about their executive presence versus the way executives feel that they connect with people, there's a huge gap. So, we have a responsibility now to be communicating and being human and being really honest and open and normal about the way that we talk to our staff and the way that we lead our staff at the moment. And there's a couple of ways to think about that.

We need to be optimistic, but we need to be realistic as well because people don't want any bullsh*t, basically. They want to be talked to as humans, and not to be sold. And they want to feel like they're engaged and they're informed.

Now, through COVID, outside of people like the World Health Organisation and scientists, CEOs are the next and most important source of information for employees. And so, they want frequency and they want vulnerability and they want human contact from a real person, not from a faceless executive. And so, now is the opportunity for people to pare that back. When you pare it back to people at home without any makeup on or the kids running about and the dogs are there, that's the real person. And that's who people really want. So, I think now more than ever is an opportunity for people to lead in that really sort of vulnerable, honest way.

“Outside of people like the WHO and scientists, CEOs are the next and most important source of information for employees. . .
they want human contact from a real person, not from a faceless executive.” 

Tony: Yeah. It's so true. I think this is an opportunity for brands to be really transparent and to be honest. I noticed that there’s a lot of businesses cutting back on their paid media but increasing their organic. And I think it's so important that, as brands, we want to be transparent, we want to be getting that brand message across, but also using this opportunity to really connect and be honest with the marketplace. And social is a great way to do that because it's seen as that kind of personal connection.

Paul: Totally. 

Tony: So, maybe just to finish off with, Paul, let's turn to innovation. 

We know people are seeing the uncertainty, but others are looking at this as a real opportunity. Besides pivoting, what kind of innovations have you seen coming through in the market that can help us come out of COVID better than we went in?

Paul: Look, the big investments we're going to have for the year ahead will be around product innovation and R&D. It's like we realise how much people need the right tools to be able to connect both with small businesses, big businesses, people, friends, family. And so, what we're looking at doing now is investing in tools to make sure that we're getting the right information in people's hands and all the way through to connection with friends and family. How do we make that much easier?

On the friends and family piece, we talked about video, we talked about calling. And the Messenger Rooms piece is a really big, big, big bit for us because essentially, that's a really easy way. People are spending more and more time on these services, more and more time on the internet. There's a real craving to connect and stay close to the things that matter to you and the people that matter. 

And so, Messenger Rooms, which has just launched in Australia, is a really cool way that we're going to make that interaction so much easier. You're spending time on the platform already. You'll see who else is there. Immediately, you can jump into a room on a video call with them. So, that's great. And then that extends all the way through other things such as our hardware, like Portal on Oculus. So, that's a big one.

But something we didn't touch on, which was around small to medium business. I mean, small to medium business is the heartbeat of every economy around the world. And our focus is on making sure that we can support the economic revival of small to medium business. What we'll have launched on Instagram is you'll be able to buy a gift card for a business or there is a sticker whereby you can order your food directly and then that goes through to a food delivery partner. And so, we're building all of these tools now to make sure that we can either get more funding into these businesses that are struggling or that people can just, via our platform and services, go and order directly from them. 

So, I think getting the right tech built to help people to communicate and connect. Video obviously and calling's a big thing. But then there's a really big part around trying to support these local small businesses and communities to go and actually essentially not go out of business, where possible, and help them thrive.

Tony: That's amazing, Paul. Can you talk us through how businesses can react, respond and reemerge using Facebook during COVID-19?

Paul: Yeah, we don't typically just speak to clients about Facebook. We're trying to speak to people about their business. 

The reality of it is, is that people are spending. Consumers are changing where they're spending their time and what they're doing. And so, our responsibility for our clients, our industry partners, our agencies, is to work out "How do we make sure that we can support them as best as possible as they try to re-emerge out of this situation that we're in?" And so, that comes everything from helping to work out what consumers are doing through insights, all the way through to "What role does Facebook have to play to make sure that your brand's getting salience?"

So, it's not just about us. It's about "How do we support the industry overall to try and come out of this." A good example is that, at the minute, people aren't travelling. The travel industry is going to bounce. And it's going to bounce back really, really heavily because Australia needs tourism, as most countries do, to go and drive their economy. We need people to travel internally. We need people internationally to come here when it's safe to do so. So, at the moment, what we're trying to work with there is supporting that industry. That's short term. I think longer term, that's going to really bounce back. And so, our job now is supporting them as they build their strategy for the bounce back.

For brands that don't remain important at this period of time for their customer, there are substitutes out there. And so, it's really more important than ever that people continue to have their brand presence out there, that they transform their models to make sure that they're staying relevant for the consumer because if they don't, others will. You see many examples of it where companies are doing it really well; and you'll see examples where people maybe don't adapt quickly enough. But salience, cut through, making sure the transformation is there and your brand is staying relevant, and trying to make sure these substitutes that can come out of nowhere don't end up kind of winning your consumer. I think that's important. The GFC showed us it. And it's going to be the same through this as well.

Tony: And also previous disasters like when we look back to a crisis like World War II. They've shown that the brands that continued to be there for people during those hard times of World War II became the market leaders in the future, and the others just kind of disappeared.

Well, it's been awesome to talk to you. Paul McCrory, Group Industry Director of Facebook, thank you for joining me on The Couch. 

Paul: Cheers, Tony.

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