Quarantined: How The Coronavirus Shutdowns Impact Marketers

The coronavirus outbreak has caused marketers to rethink their 2020 budgets, delay campaign launches, sit out conferences and experiment with remote work.

Despite this disruption, we’re still largely in wait-and-see mode in terms of how the virus will impact operations in the United States.

Here’s the quick lowdown on how COVID-19’s warpath through the world is impacting advertising and marketing.

Advertising will feel the wake of a supply-chain slowdown

COVID-19’s impact on the global supply chain is top of mind for many marketers.

“How [companies’] inventory is hitting shelves will heavily impact how they choose to spend money on advertising,” Amanda Martin, VP of enterprise partnerships at Goodway Group.

China is ramping its production back up, but it’s unclear how its brief pause in manufacturing could impact sales – and ad spend – downstream, or how production outages in other markets may factor in.

“There will be lingering effects from supply chain disruptions,” said Brian Wieser, head of global intelligence at GroupM. “In some cases, there will be some catch up that happens.”

No one wants to travel during a pandemic

The travel, tourism and hospitality vertical is readjusting budgets as the virus quells any sightseeing urges. Some travel marketers are pulling back spend significantly, while others gear up branding campaigns to inspire consumers to travel again once the virus subsides, said Humphrey Ho, managing director at Hylink Digital.

“Travel is depressed across at the world at the moment, so there’s only so much they can spend,” he said.

Netflix and ill

But not all verticals will suffer from coronavirus-induced quarantine. Streaming services stand to gain as more people spend time at home in front of screens. And ecommerce will grow beyond its core consumer base as people are physically unable to go to stores.

As marketers think these realities through, they’re likely to shift budgets out of traditional media like out of home and radio and toward digital channels people can access from home. This is already playing out in China, as FMCG companies move money out of retail and into ecommerce and QSR restaurants lean into delivery, Ho said.

“They’re just accelerating trends that began in 2019,” he said.

Big projects on hold

With an overdue recession and an upcoming presidential election, US-based marketers were already factoring a ton of uncertainty into their 2020 budgets. Coronavirus throws another wrench in the mix, leading marketers to pause major investments that would normally kick off at the beginning of the quarter.

“There are a number of economic factors at play that executives need to factor into their decisions,” Martin said. “That’s going to slow down spending.”

Campaigns that can be pushed out to a later date will be. But budgets and campaigns tied to a static event, like the 2020 Olympics, are sitting in limbo.

Regardless of uncertainty around the situation, marketers should be careful not to lose their share of voice by going dark in the market completely as the impacts of the virus play out.

“If you don’t advertise, any one of your competitors can eat your share of voice,” Ho said.

Canceled meetings, delayed pitches

As the virus spreads, industry constituents are cancelling global conferences and issuing non-essential travel warnings. But in a relationship-driven business such as advertising, the inability to meet face-to-face and can be severely disruptive to the flow of business.

A global travel hiatus could result in delayed pitches, which are generally made and closed in person. That’s good for incumbents, who get to eke a few more weeks of revenue out of the client, but not so great for challengers.

“Clients in Europe are pushing back reviews,” Ho said. “They’d rather do that than do a virtual pitch because that doesn't work.”

As more agencies close offices, it opens an opportunity to see what remote work looks like in a heavily office-driven culture. Agencies, struggling to find affordable talent around the globe, are already starting to experiment more with a remote workforce, said Jay Pattisall, principal analyst at Forrester.

Ho, however, is skeptical that digital collaboration will adequately facilitate agency work.

“We are tribes,” he said. “We need to coalesce around a problem. Doing it virtually is possible, but significantly more hampering.”

Conference crunch

Those planning to go to F8, Adobe Summit or Facebook’s global marketing summit this year have already put away their suitcases as global travel gets shut down. But with so many events cluttering the industry’s calendar, will slowdown this spring lead to a culling of the conference circuit once and for all?

“[Companies] might realize there were conferences that didn’t have a major impact,” Martin said. “Some of those inferences were already being seen in attendance at larger events.”

While it may be attractive to return conference dollars to the bottom line in the short-term, events play a major role in relationship building and employee development and retention, Pattisall said.

“Given how tight the labor market is, it doesn't seem practical for companies to let go of opportunities that are helpful in developing talent and retaining employees,” he said.

The coronavirus impact might shift the industry toward more virtual summits, but smaller events likely don’t have the infrastructure to support that, Ho said.

The long-term impacts on the conference business will be more impacted by shifts in the economy than one-off cancellations. While the number of industry events may contract, those that continue to bring value will survive.

“The ones that accomplish business goals will always stay on the radar,” Martin said. “The ones that don’t might fall out of favor.”

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