News about COID-19’s wide ranging impact across almost every industry is making headline every day. Global marketing and advertising forecasts and analyses are being modified and tweaked based on factors ranging from supply chain disruptions, effects of social distancing and changing consumer behavior, to global recession.
There are generally two kinds of forecasts for marketing and ad-spend emerging across the world: There are many analysts that are optimistic in the sense that the COVID-19 outbreak will be contained in the second half of 2020, which would result in a rebound in consumer sentiments, demand and hence the marketing and advertising activity. Part of this bounce back is also based on the fact that the bulk of ad spending takes place in the latter part of the year in the holiday season. But then there are those who believe Covid-19 will be worse for advertising and that the marketers and agencies will adopt a wait and see approach.
But what’s more important here is that the pandemic will significantly alter consumer behaviour, which is what marketers should be focusing more on. More people are sitting at home, avoiding public places, shopping malls, eateries and non-essential shopping. As lesser people are out on the go, traditional out-of-home advertising is expected to take the biggest hit. On the other hand, digital advertising is expected to be better than other mediums. While some are still clueless and overwhelmed, there are some marketers that are tweaking their messaging strategy, audience targeting, and device targeting.
WARC’s Global Ad Trend Report highlights a grim bigger with looming global recession with advertising market likely to follow in the first half 2020. The Purchasing Manager’s Index has declined for China, UK, USA, Europe and Japan with all economies revising down their GDP growth forecasts, which has raised the probability of advertising recession significantly.
Justifiably, advertising slump is likely to be much higher for sectors like travel, tourism and entertainment than for food and drink sectors that also reduced at a softer rate than the other sectors in the 2008-09 financial crisis. The report highlights a key insight that consumers are adjusting to ‘living a new normal’, which may prompt permanent shift in behaviour. And part of this new normal is the rise of the e-commerce and digital marketing, which will be a key for brands in these precarious times.
At home, though the number of coronavirus cases are relatively small, the trajectory is not sanguine for reasons already discussed at length in this sector. And while the decline in ad-spend is not as significant as some other countries, industry experts are seeing some common changes. These include increase in Gross Rating Points (GRP) or more commonly known as TV ratings are increasing as many parts of the country enter into the second week of lockdowns. An industry insider points out that despite the spike in media time, ad spending has started to go downward as the lockdowns are causing business disruptions and cash flow problems.
Overall, the FMCG products that include food, beverages, health and hygiene have actually seen a spike in sales. Marketers are of the view that this short term spike will be followed by limited demand contraction of these essential items if situation in Pakistan gets worse.
Marketers are shifting from creative content to more reactive content in the ongoing crisis. The digital content creators and digitally driven businesses can be seen to take the lead to switch to reactive mode, focusing on useful content like tutorials, online cooking lesson, home works etc.
The challenge now for the brands and the marketers is to strike a balance between exploiting the consumers and remaining relevant and poised for a recovery. There are various types of empathetic marketing during a crisis as severe as the Covid-19 pandemic. Marketers need to decide what should be paused and prioritized; evaluate imagery and reframe marketing language; focus on being sensitive and compassionate yet not ignorant; and look at the bigger picture that includes recovering and bouncing back when the situation improves.