Coronavirus creating disruption, uncertainty for digital marketing ecosystem

The news cycle has been dominated by discussion and speculation about the coronavirus or COVID-19. That’s also true in the tech press, as major industry events cancel and companies such as Apple, Facebook and Uber say revenues will likely take a hit because of supply chain issues or declining consumer demand.

Online publishers have indicated that COVID-19 is starting to impact ad revenues. In particular, the NY Times made a filing in which it said (via Axios) that ad revenue would be down about 10% this quarter. The company attributed that to “uncertainty and anxiety about the virus.” Analysts said they expect to see Facebook’s ad business take a hit in the near-term (it would follow Google’s could as well).

Indeed, uncertainty and fear are having a real-world impact. That in turn is affecting the digital ecosystem. How that will play out in the short and longer-term is a question we put to a range of digital marketers. Their responses are diverse but share some themes: the cancellation of conferences, how ecommerce may benefit, the impact on the supply chain and logistics, working remotely and how specific verticals will suffer more than others.

Tom O’Regan, Madison Logic

Industry conferences are either the number one or number two expense line within marketing budgets for enterprise companies. These events are relied upon to generate net new accounts but more importantly, in this environment of product commoditization, retain and grow existing ones. The alignment of sales and marketing teams and their success in executing virtual events and digital engagement will be the difference maker in maintaining growth rates within their organizations. With the right strategy focused on the accounts that matter most, I believe organizations can take advantage of this new environment and potentially excel even more.

Amy Barone, Splash

Even before the current risk with coronavirus, we’ve noticed event marketers choosing to invest in repeatable, local events rather than just one or two larger annual events. Local events are faster and easier to scale up (and down), encouraging more meaningful personal connection, attracting a broader group of attendees, including those who can’t or won’t travel. In just the past few days, we’re seeing many more companies quickly shift to this approach in the face of many large event cancellations.

Amanda Martin, Goodway Group

Coronavirus is top of mind for all executives worldwide. The supply impact is the first thing we are preparing to see based on how inventory is hitting shelves and affecting marketing budgets and advertising dollars. One topic of discussion when speaking with clients is understanding how their industry will be impacted, for example, we’ve seen a decline in hospitality already, but also a surge in spend around incentivizing travel.

Sean Buckley, SpotX

While it is too early to understand the long-term impact, we see the Coronavirus outbreak having the largest impact on the travel vertical to date. Airlines and cruises are, in some cases, starting to reduce, postpone, or pause their advertising campaigns given the current climate.

Tony Rindsberg, Thankful

The wave of trade show and conference cancellations or delays like Shoptalk are significantly altering our spend allocation. I plan to leverage digital channels more aggressively, but strategically and with a watchful eye on the CV spread. If the current trend continues, I would have to seriously consider shutting down some campaigns until brands are ready to discuss implementing new products again.

Jonathan Kagan, MARC USA

In my mind, a few things will happen, and it all comes down to the vertical. Travel especially international will likely plummet in spend, as advertisers work to prevent spending on what is likely just trip cancellations. We saw something similar in 2016 with Zika. Any advertiser driving traffic for brick and mortar locations will likely see a decline in effort, as confidence to go outside may even decline. I do however believe we’ll see an uptick in CPG efforts, grocery delivery, food ordering and all similar efforts, as folks’ ability to avoid panic buying will likely begin to fall. If this leads into an economic downturn, then I see automotive/luxury goods taking a hit on their investments (similar to 2007-2008). However, whenever there is economic downturn or widespread fear of health, pharma/healthcare and vices (i.e. alcohol) seem to thrive and grow.

Frederick Vallaeys, Optmyzr

If we come to a point where we must avoid stores or other public places, it could boost ecommerce, especially for CPG and those purchases we can’t postpone by a few weeks. That would of course have a big impact on digital marketers who could compete for the purchases of consumers who are not frequent online shoppers.

Samantha Barnes, bounteous

The short-term impact of the new coronavirus will probably result in a downturn for many industries, but we’ll see a spike in audience reach with the frequency of online touchpoints. Measurement strategies and goals should be adjusted for uncertain times and it’s a chance to build long-term relationships for the next upswing. I also see that shady advertisers, bots and content sites are sprouting up to take advantage of peoples’ fears, so the right message at the right time will be even more meaningful now. As for the long-term, I have no doubt that marketers and analysts will innovate with considerations that customer journeys can be filled with stressors and experience to acknowledge and be mindful of.

Tony Verre, The Integer Group

What I see as short-to-mid range impacts (1 – 4 months) for ecommerce specifically — we’re already starting to see it across major marketplaces like Amazon — is a massive increase in online orders as people avoid person-to-person contact of in-store retail. Not only for disinfectant and cleaning supplies but for all goods and services: grocery delivery, everyday item delivery, etc.

The long-term effect of this massive increase in online orders, in my opinion, will create stress on the logistics system that will cause both marketplaces and DTCs to renege on 1 and 2-day deliveries, and could potentially grind the system to a temporary halt as delivery windows stretch back out to pre-Prime days of 5 to 7-day windows.

Eric Enge, Perficient Digital

The primary impact will be as a result of the fear that it causes. We have already seen that with an over 1,000 point drop in the Dow, companies canceling major conferences, and companies reporting it as an earnings risk, and these will extend to digital marketing companies (though it may benefit entities such as Zoom, LogMeIn, Skype). As for the long term, it’s hard to say, as that depends on just how widely it spreads.

Emil Alon, Resonai

It’s important to have remote work policies in place during a pandemic like this; even if there’s not an immediate concern in your geographic area, work travel is frequent and often unpredictable. Immersive technology like AR training can be developed and scaled across multiple locations, enabling traditional offices to accommodate a remote working strategy when needed. Content can be injected remotely, using admin tools, to update tutorials and save time and money when it comes to developing new training.

Dana Tan, Under Armour

We were scheduled to meet with a vendor who was traveling over from the UK to meet with us in person. There was some question whether or not we could proceed with meeting as there was a corporate policy stating we shouldn’t meet with anyone coming over from outside the U.S. unless they had been in the country for at least 14 days. So, there is definitely an impact on face to face meetings. I am also wondering what the conference scene will look like for the rest of the year. I imagine attendance may be down.

And what does coronavirus mean for e-comm new product line releases and supply chain? I don’t think we know the answer to that one yet. While there is certainly diversity in the industry, the coronavirus is no longer isolated to a few countries.

I am very happy that as a digital marketer I can do my job from home. Grocery store clerks, food service workers and many other people don’t have this luxury. They also often don’t have any paid time off, meaning they have to go to work to get paid, which in turn means they often go to work sick because otherwise, they won’t be able to pay rent or provide for their kids. Maybe if any good can come out of this epidemic it might be that we re-examine some of these issues.

Natalie Barreda, T-Mobile

In the short term, I think the uncertainty about how to move forward is going to cause marketers to spend a lot of time doing contingency planning. On a similar note, consumer behavior is different right now than it would normally be; we’re already hearing about the impacts to the travel and hospitality industry. I think these industries are going to have to find ways to encourage consumers to think past this current situation, into a hopefully COVID-19 free world.

In terms of long-term impact, we’re already starting to see how this is affecting the economy from a stock market perspective. And if this continues, it’s going to trickle down to employees and will impact how people purchase and engage with brands. Marketers will need to have very honest conversations about the likelihood of hitting goals and the value of their investments. It might be a time to dial things back and do some spring cleaning. Additionally, brands should also start thinking about how they can leverage their marketing to address issues caused by COVID-19, such as store closures. Having a great customer service and ecommerce experience is imperative during times like this.