There is no business as usual anymore.
That is to say, companies and industries across the globe are being faced with an unprecedented challenge of trying to find the new “usual”.
COVID-19’s international presence has left significant impacts on advertisers and publishers alike. However, in the same shadow, the pandemic is opening doors for innovation and pockets of new revenue streams. Information and news are coming in rapidly and changing daily. It’s more than just having all the information. It’s about how brands and companies are responding.
First and foremost, we’re seeing industries whose business models relying on brick-and-mortar outposts taking some of the hardest hits. Restaurants, retailers, department stores, theme parks, movie theaters, and other ticketed events saw 35% decline in spend as of March 13th. For natural reasons, the campaigns and information spreading about social distancing has encumbered foot traffic as states across the country are announcing “shelter-in-place” procedures. Consumer redirects are being seen across these industries as large upticks in online ordering, curb-side pickup, and delivery are recorded.
In short, companies are pivoting in response to the pandemic. Major retailers are offering sales and discounts in efforts to drive consumers to their online stores. According to Comscore, web traffic to retailers Amazon, Target, and Walmart climbed in March.
Still, the declines across major industries are palpable. Travel taking one of the largest hits, next to QSR/casual dining, both of which are actively cancelling media due to the spreading restrictions and necessary social distancing measures cities are putting in place. Auto has seen a huge revenue drop of 13% this month compared to 2019. J.D. Power has reported they expected sales to slump even further as the pandemic worsens. J.D. Power’s Tyson Jominy indicates, “we are seeing roughly 100 million consumers living in states where dealerships are either totally or partially closed.” Cities hit the worst, like Seattle, are being used to measure the expected sharper declines across the nation. Falling in line with this pattern, consumers are less inclined to make any big-ticket purchases right now, such as new household items, furniture, or electronics. Consumers are tightening their wallets and focusing their attention on stocking up on non-perishables and essential food items as they await the oncoming storm.
Other industries are seeing major surges in revenue as consumer behavior is reshaping expectations of where people are spending their dollars. Grocery spending, especially on essential items and housewares have seen sharp inclines over the months as the outbreak continues to spread. As cities are under lock-downs, there is an inherent need to seek safety and protection in times of uncertainty. Firearms and ammunition sales have drastically increased, with a discount ammunition site (Ammo.com) reporting 4x revenue increase between Feb. 23rd and Mar. 15th, compared to the previous 22 days. People seeking comfort during times of economic and social strife is not foreign to large food distributors such as General Mills either. AdAge reports the Minneapolis-based food giant is “trying to maintain a sense of normalcy in its marketing” while ensuring their brands and messaging attracts the right attention. Harkening back to the Great Recession, products like cereal and canned goods did well as people gravitated indoors. Impacts and surges such as this are expected to be short term while demand is expected to ebb in the coming months as the curve flattens.
What of “essential” industries? Healthcare springs to mind first, where we are seeing a mixed-bag of marketing reactions and strategies. Some have risen to the occasion, others have pulled their campaigns completely. Overall, there is a distinct attitude of “wait-and-see”, leaving both advertisers and media holding in a state of limbo. While several healthcare providers have pulled advertising for their seminars and speaking events, there is the expectation that these campaigns will come back. Just later in the year. Still, others have elected to change their creative strategy by focusing on other services and establishing a solidarity with customers in the present. Healthcare providers being on the front lines should no doubt be the leaders in ensuring the correct information and advice is being spread about how to best prevent the spread of the virus as well as providing next steps for those who believe they may have it. There is room to be sensitive, consistent, and helpful in the current climate. Many practices are opting for branded messaging, pivoting their strategy towards posting safety advice on their websites, encouraging telehealth calls before coming into the doctor’s office, as well as taking to local media to communicate directly to the high-risk population.
Pharma is finding themselves in a unique bubble as well. While in any marketing, there are slow-downs and upswings, a report from FiercePharma suggests that for the most part, pharma marketing is staying the course given the current context of the world. Some clients are even finding bright spots as there are new opportunities to communicate how COVID-19 can impact patients and healthcare specifically targeting certain states and specialties. Oncology and Immunology being critical areas during this time. Predominately occupying the digital space and social media, pharma is seeing an increase in requests centering around content for websites, emails, and mobile. However, significant losses have taken place with the cancelling or postponement of live marketing events and medical conferences which are major plays for marketers to unveil data, speak directly with physicians, and talk-up the drugs pre-launch. Similarly to several other industry campaigns, while these are expected to return later on, several advertisers and clients feel there is still too much beyond anticipating at the moment to know their next moves.
Growing concerns among advertisers and consumers alike have drawn out an alarmingly paradoxical consequence in the advertising world. Vox.com analyzed that while media consumption is on the upswing, advertisers are shying away from promotion and brand messaging. Twitter reported a jump of 23% in daily usage as people flock to the platform for news and updates. Facebook noted several of its services, especially the messaging services, are seeing increased engagement. Newsrooms, amid the rampant reports of staffing cutbacks and closures in some cases, are reporting over 100% increases in site visits with people searching for information and updates on the crisis. Boston Globe digital subscription orders nearly tripled during the week of March 16th, compared to last year’s numbers. Reported from MediaPost, the Washington Post and the New York Times have even suspended the paywalls for certain information amid the coronavirus scare to give people free access to updates important information. Local news sources have always been key pillars for community outreach and are especially critical during times of hardship. With a public hungry for reliable accurate information, local dailies are the trusted avenues people naturally turn to whether in print or online.
Yet, brands just aren’t biting. Even when “the issue and need for ad-supported media is clearer than ever right as ad budgets get cut and ad tech is shaky,” in a recent tweet from Jonathan Mendez, partner at Arkle Advisors. The indication being that marketers are cutting spend across the board. This presumed forced pause on advertising has led several industry experts to point out that may not be the best approach to take during this time. A brief presented by MarketingDive dove into the consumer reaction to the COVID-19 crisis, as well as the reaction to brand messaging and responses. Overall, consumers want to hear from trusted and known brands and how they’re handling the outbreak. 43% of consumers find it reassuring to hear from brands they know and trust. Another 40% want to hear how brands are responding. Navigating these uncertain times, brands should focus on the right message over driving a response. Messaging targeted towards the younger demographic received positive reviews when focused on the brand’s involvement in community support while ads aimed at older audiences should highlight plans to keep online customers safe from the virus.
With the virus changing consumer behavior, experts agree now is the time for marketers to remain present. It’s not only expert opinion but the verdict of history. Compliments of the Hartford Courant, this infographic lifts open the shutters on the results of marketers who considered the long-term over the short-term. Tough decisions will be made. Businesses will need to weigh all options without being indiscriminate when it comes to the long-term impacts.
Campaign US gained insight from Havas Media CIO, Jason Kanefsky who’s advice echoes this sentiment, “There is a risk of losing brand equity when advertising goes dark, and an opportunity to use this time to build and reinforce a brand’s relationship with their customers and prospects”.
With so many questions still up in the air, answers won’t come easily. Collaboration and innovation have always stood to propel us forward as we are all working to support positive outcomes as the global health crisis will eventually fade.
Additional Reading:
https://www.wordstream.com/blog/ws/2020/03/23/covid-19-business-trends
https://www.campaignlive.com/article/one-worst-things-brands-right-go-dark-warn-experts/1677743
https://www.hartfordcourantmediagroup.com/blog/marketing-during-crisis-then-now-and-always/
