Is marketing going to survive COVID-19?
The coronavirus pandemic has already changed business by and large, and marketing is no exception. According to Marketing Director Iskra Popović of Novaston Marketing Consultancy, advertising cannot be stopped, and the right projects always find their way to the end user.
“Adequate campaigns are now even more needed than in regular circumstances, particularly when it comes to corporate social responsibility. We have seen that big brands like McDonald's are changing their marketing approach — and even logos — in an effort to emphasize the importance of social distancing. The idea is not to stop everything, but rather to reorganize and adapt to the situation. This is the sole recipe for success. Budget cuts are imminent, and they will most likely affect marketing first, but it’s important that the process continues.”
The imposing question is whether online life, communication, and shopping will entirely replace their offline counterparts.
“We are witnessing that everything is going online — business and meetings, all communication, advertising, and even socializing. Being an agency specialized in retail marketing with investors and owners of large shopping centers and retail parks as our main clients, I believe that this form of shopping will continue to live after the isolation. People will be yearning for physical contact, entertainment programs, cinemas, and restaurants. Shopping malls and retail parks themselves will have to keep pace with the online trend and adapt to new circumstances through adequate marketing campaigns,” Iskra Popović notes.
A recent survey revealed that 61% of retailers are changing their short-term media strategies, while merely 9% are planning long-term changes.
Digital ads, social media, and online video are the formats that are set to surge in the media short-term. OOH advertising, like billboards, now have less exposure because most people are staying home. Marketing events are postponed or canceled, and some B2B brands are increasing their investment in digital advertising in order to make up for the benefit they would otherwise get from events.
We are seeing less consumption in the travel and retail industries, but other services are likely to amplify advertising — especially through online channels. Online food delivery services, streaming, and online news are using their online presence to take over a market share as big as possible and boost consumption.
Considering that many companies are downsizing their marketing budgets, CPM and CPC prices are expected to plummet (on account of reduced competition). This also presents an opportunity for some retailers to earn new customers at lower costs because consumers are spending more time reading or watching the news.
For brands, online presence has never been as important as it is today. In Serbia, watching television grew by around 20% compared with the same period last year, but in our country and in the region, websites have seen an increase in visits of as much as 50–60% during the first two weeks since the state of emergency was declared.
According to Kliping, Advertiser Perceptions’ April surveys suggest that changes are set to exceed the expected. Judging by the results, a month after the pandemic’s onset, the respondents realized the seriousness of its consequences — a staggering 86% think that the present situation will hugely affect advertising budgets in the second quarter. Forty-three percent believe that the trend will continue through the third quarter, while only one out of ten is inclined to think that the situation will improve during this time. Thirteen percent of respondents feel that the effects will spill over into the fourth quarter.
A survey conducted by Interactive Advertising Bureau (IAB) clearly shows differences between advertisers’ expectations on the one hand and those of the media on the other. The media expected digital marketing budgets to plummet by 21%, while advertisers set the figure at 33%. A possible reason behind the discrepancy is that the former centered on economic indicators (government orders 65%, stock market 61%, business continuity 57%), while the latter focused on pandemic-based indicators (quarantine 65%, government orders 62%, COVID-19 cases 49%).
Video campaigns — smaller budgets, but still predominant
The video format of digital ads was slated for a considerable upswing in this year’s budgets in the US — as much as 26.2% according to some projections. The new reality is that — in the first half of 2020 — budgets intended for this advertising form will climb by 7.8% at best and by 5.2% at worst, compared with the same time last year. The optimistic outlook would interpret this as a spending downslide of USD 3–5 billion. During the first quarter of 2020, video ads maintained the upward trend from the previous period, with spending jumping between 10.5% and 17%. Video campaign budgets are expected to decline at an annual rate of 1.3% to 21% during the second quarter. Considering that video has been prevalent compared with other formats, video campaigns can be expected to face the least consequences. The prices slipping on account of the plunge in advertising demand will make video even more appealing as a form of advertising compared with static advertising. This perfectly suits advertisers, many of which are aware that sales are hampered during this time and primarily centered on branding campaigns for which video remains to be the best option.
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