At this point it’s getting monotonous to say that we’re surrounded by uncertainty and unpredictability. The only sure thing left is that business and marketing will rebound, continue, and for many, even flourish. It may take some time, but it’ll happen.
So let’s focus on the trends, economic expectations, and practical advice that can be of particular benefit to marketing professionals today.
While there was some initial fear in the U.S. in late January/early February, the real concern began in late February when searches for “coronavirus” skyrocketed:
And as the virus tightened its grip on the country, it’s certainly been interesting to see the speed at which different industries have been impacted.
Some saw almost instant growth. Like Netflix, with its influx of 250K subscribers in a week (Mintel, March 2020).
Others, unfortunately, saw a rapid decline. Events-based organizations—from party rentals to global conferences and tradeshows—saw cancellations almost overnight. Vacation searches dropped by 50%. Flights were canceled and airlines had to refund money or offer travel credits.
The expectation is that businesses will continue struggling with the negative effects of the current situation for at least the next year.
As reported heavily in the media, in China the retail market dropped by more than 20% and the unemployment rate reached 6.2%. Losses in tourism are expected to go over $820 billion; seaports are empty and expected loses there are about $2.7 trillion.
Being a small business, the responsibility that falls on us as owners to maintain operations in order to support the lifestyle of our employees is enormous. Some companies like Virgin Atlantic are asking their staff to go on unpaid vacation for a longer period, others are forcing their employees to take all their paid vacation now in expectation of what the rest of the year might bring.
Businesses are losing money, website traffic, and conversions. That leads to reduced investments in advertising.
James McDonald, WARC Data’s managing editor, recently did an interview with CNBC where he detailed how the virus will especially impact out-of-home (OOH) and radio advertising. People are most hesitant to be out and about and businesses are pulling down their ads.
Prior to the spread of the virus, it was anticipated that global advertising spend would reach $712.02 billion (estimated 7.4% growth over 2019). eMarketer, however, recently reported an adjusted spend forecast of $691.7 billion in 2020 (only 7.0% growth).
What’s the current situation with digital marketing? It remains the most efficient and effective marketing channel—particularly during times of social isolation. Our freedom of movement is paused and we’re more connected to our devices than ever, after all. One could argue that it’s the ideal time to (easily and cost-effectively) outbid our competition to find and target a receptive audience with a resonant message.
Using video as part of your marketing is extra impactful, too. Right now it’s video that can truly share your story and provide an important emotional connection at a time when we are physically apart.
Of course, it makes sense that during a time of financial contraction, companies will lower their expenses, including their spend on advertising.
But there are a lot of long-term benefits to advertising at a time like this.
During recessions, advertisers can increase sales and build market share with the best ROI on ad spend.
86% of consumers say companies who advertise during a “down economy” are top of mind when it comes to making purchase decisions.
As Warren Buffett once said, be “fearful when others are greedy and greedy when others are fearful.”
We can easily go back to the 80s and analyze recession outcomes, but Amazon provides a more recent and relevant example from The Great Recession of 2008-09. The company increased their ad spend and launched their e-book reader “Kindle”. In 2009, Amazon’s sales grew by 28%.
The present situation is said to bring an even bigger recession, but this could be an opportunity for growth. Mainly because competition will weaken—many companies might not be able to overcome the crisis or at least face great financial difficulties.
Even though we see the huge impact around us every day, no one has a clear idea of what the bigger picture will look like when the dust settles. But let’s not forget about history and keep in the back of our minds that when the market drops by 20%, it takes about 540 days to recover.
How are you positioning your company for what’s ahead?
If you are a marketing professional, you might want to start looking closer at the impact the pandemic is having on the local level. Here’s an example of how searches for “things to do in Colorado Springs” has evolved over the last few weeks:
Why is the above important? Well, it shows a behavior pattern. As people start getting “tired” of the quarantine, they start looking more and more for things to do, buy, etc. online. How can you use this to position your marketing better?
Here a few summary questions to ask yourself as a marketing professional:
- Build up your strategy globally but act locally – is your company positioned to communicate and get involved locally?
- Look up at your creative elements – font, sound, picture, keywords, media select. Are they suitable for the respective local market?
- Are the campaigns created last month still applicable to the present situation?
- Which brands, products, or media campaigns should continue in this difficult time? What should you put on hold, adjust, or scrap all together?
- Should we restructure our media budget?
- How can our brand, our media presence, and campaigns benefit our community?
These are some serious questions for corporate social responsibility. Business and profit are absolutely needed for companies, but human life should always take precedence.
Please stay safe and if possible indoors. We look forward to overcoming this challenge together!