Needless to say, the new coronavirus has taken over the world by storm. It has not only affected the health of millions on earth but also has weakened the backbone of the world economy. Even the powerful countries like the USA, UK, Australia could not save themselves from its attack. The global pandemic has posed a major threat to domestic and international businesses. Whether you have a small business or an established one, the impact of this virus could be massive.
As the disease is exceptionally contagious, the governments of various countries have announced a nationwide lockdown to contain the disease through social distancing. This has put immense pressure on industries like advertising, marketing and travel and tourism. With the increasing number of affected patients and deaths, the disease is showing no signs of improvement.
In this situation, a lot of questions like how long the pandemic will be with us? How badly it would affect the economy? What kind of impact will it have on the advertising and digital marketing industry? May haunt you and frighten you but it is better to prepare yourself for the worst. Things will get back to normal again, once the situation comes under our control.
But the time duration is uncertain. Although we cannot give proper answers to these questions, the information that we have gathered here will help you understand the current situation and find ways on how you can sustain your business in this.
Both the private and public sectors are struggling hard to handle the situation. Even the governments and reserve banks are taking the necessary steps to bring the economy back on its track. Unfortunately, we are fighting this disease without any vaccine which is the reason why it will take time to stabilize.
In this article, we will be focusing on the issues and the impact of the Covid-19 crisis on different industries and how they are planning to handle it.
Problems faced by the marketing and the advertising industries-
With a growing number of corona positive cases, most of the companies have reduced their ad expense forecast by almost 692 billion in 2020. The main reason behind this reduction is China as it is the second ad market in the world.
Besides the advertising and marketing sector, the global pandemic has not even spared schools, colleges, factories, travel and tourism and other places of work. The recent crisis seems to have a more severe impact on the world economy than the 2002-2003 SARs pandemic.
A Statista report recently revealed that the advertising sector is bleeding badly due to the Covid-19 pandemic. US ad agencies have witnessed a massive loss since March and their revenue reduced to 10.6%. The percentage could even drop further if the situation continues for a long.
However, the scenario is different when it comes to digital media. As people are spending most of their time at their homes, the usage of digital media has remarkably increased but the full impact of Covid-19 on consumer behaviour, brands and agencies are still not known.
While deciding about the advertising campaigns, the areas that need to be given attention are the changing consumer behaviour and the impact on individual industries.
Change in consumer behaviour and its impact
- As most of the employees are working from home, it is obvious that the time they usually spend on the internet for personal use will increase. This will eventually lead to an increase in ad inventory on various platforms. In case the rate of ad purchasing remains the same or gets reduced and the inventory increases then the expense to buy the inventory will go down.
- Again, when people are locked in their homes, their dependence on home delivery service providers like Amazon, UberEats will gradually increase. As a result, these supply channels will witness sudden demand pressure because of their ability to deliver products and services at the doorsteps of the consumers.
- It is expected that the economic depression can radically change consumer behaviour. People who do not have a disposable income, or those who are planning for their retirement or retired and small business owners are likely to see a sharp decline in their propensity to consume.
- So, it is important for advertisers to pay more attention to their target audience and their purchasing practices that may change considering the current economic scenario. So, marketers should be aware of their performance data and adjust campaigns according to the need.
How marketing will need to shift
- Marketers should focus on doing what they are best at, like following the latest trends, understanding consumer activities and keeping a close eye on the data for insight. These will be the keys to building effective consumer strategies to move ahead.
- People’s growing inclination towards online purchasing will inevitably reduce the in-store traffic in affected countries. This trend will simply increase the demand for online and TV activities and advertisers could get their target audiences’ attention by spending more on digital, television and direct mail advertising than in-store advertising.
- As the world is going through an extremely tough time, it is important to focus on advertising to make sure brands stay in a positive light. Maintaining a compassionate approach towards advertising help build a relationship of trust and loyalty with the consumers.
Final words
Although it is too early to specify what changes the global pandemic will bring in the future in the advertising industry, but the current trend shows the following
- It has exceptionally improved the demand for news as people rely on the news for the latest updates on the virus. Evidently, the sector witnessed a significant increase in ad spend.
- Besides media, the eCommerce industry is also dealing with an increase in demand due to the continuous lockdown. As a result, their sales and ad spend have also gone up.
- A sharp rise in the demand for purchasing groceries online is also prominent
- It won’t be wrong to say that the travel industry is the worst affected due to the long-term ban on trains, flights and other means of public transports.
- As the disease is highly contagious, people are now avoiding cash transactions and depending more on online payments.
- There was a growing trend of buying clothes online before the pandemic touched the world. However, the trend has shifted from clothing and other luxury items to essentials and supermarket shopping.
