Weathering the COVID-19 storm
Credit -Neilpatel.com blog
COVID19 without a doubt will cause long lasting changes in the way we live and especially how we work. Businesses will transform to match changed consumer behavior and consequently so will the Advertising industry.
Right now, we are at the cusp of the situation, with several countries entering phase 3 of the pandemic. We can view the possibilities in terms of the short term (near future) and the long term (post event). Timelines and consequences are really hard to predict and this McKinsey article does a thorough job of guessing what might lie ahead.
For marketers there are a couple of points of note:
- A recession approaches as per McKinsey’s note, there were strong feelers pre COVID19 and now in the midst of it, its turning into a certainty. We can expect at least 3 quarters of financial tumult before things get back to normal
- Neil Patel highlights that except for eCommerce, Finance, Food, Healthcare, Media and Pharma, all the other verticals are currently experiencing a digital slowdown and is a likely indicator of how the short term will look like (graphic credits to Neilpatel.com)
- Brands (Clients) are now forced to do more with less, which is what small agencies are used to and will shine in the coming quarters. Large advertising companies which are overly reliant on hefty retainers to fuel inflated overhead costs, suffer in a recession
- Ad prices on digital medium could decline, as per John Lovelock, IT analyst at Gartner – People are less likely to buy something, less likely to consume a new service, less likely to sign up and they would pay less for those services
- A slowdown can also be an opportunity – for brands to cut the red tape, experiment and take bold steps. A recent E&Y article details this topic in detail. There will be more focus on cause based marketing in the short term and a shift away from the usual seasonal approach
- The traditional media relationships will transform from opaque interpersonal interactions to more open, efficient and measurable media
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