While the full marketing impact of COVID-19 (Coronavirus) on consumer buying habits, brands and agencies are largely unknown, there are many factors that will guide short-term decision making. There are still many uncertainties as to how the next few months will impact the global community, both professionally and personally, so it is essential to look at both spectrums to make educated decisions regarding marketing investments.
When making decisions on advertising campaigns, the two primary areas to consider are changing consumer behaviours and impacts on individual industries (from supply chains to point of sales). Strategically thinking through the below thought-starters will be crucial in making the right decision for your brand or clients.
CONSUMER BEHAVIOR SHIFTS AND IMPACT
- Increased “work from home” periods will naturally lead to an increase in the time spent online for personal use. With all else equal, this will potentially lead to an increase in ad inventory across several platforms. As a result, it is possible to see the cost per thousand impressions (CPM) decrease across auction-based platforms, especially as some businesses scale back on their marketing spend during this time. If ad inventory increases and ad purchasing stays the same or declines, then the cost to buy that inventory will naturally fall.
- As many people opt to remain in their homes, delivery services like Amazon, UberEats, and DoorDash are likely to see increases in demand due to their ability to provide products and services directly to the consumer’s door.
- With the economic downturn, consumer behaviour is likely to change drastically. For those without significant disposable income, those planning for or are in retirement, and for small business owners, an economic downturn might result in a sharp decline in their propensity to spend. While consumers could take a “wait and see” approach, advertisers should consider their target audience and how their buying habits may change as a result of the current economic climate. Marketers should continue to look at their performance data and quickly adjust campaigns as needed.
HOW INDUSTRIES ARE AFFECTED
- As events or, as Twitter would say “Everything”, is cancelled, a trickle-down effect on the businesses participating in or located around those events is likely to occur. After major conferences, sporting events, and other large gathering events have been called “off” and travel restrictions are placed globally, travel and local-based businesses are struggling to generate previously anticipated demand. Additionally, as consumers are less likely to go into malls, movie theatres, and other public entertainment venues, the ability for brick and mortar businesses to generate profits becomes more challenging.
- While there is a potential benefit for delivery companies previously mentioned, other services such as Uber, Airbnb, public transit, air travel, and companies that put people in close proximity to others will potentially face challenges, as users are choosing to avoid close contact in exchange for staying home. This will not only impact those company’s bottom lines but also their employees’ work schedules and employment status.
- Industries or companies that are supply-chain reliant on Asia, Europe, or other highly affected areas might encounter shipment slowdowns. Understanding current product inventory and future production ramifications will be important in planning marketing campaigns throughout the next few months.
- Businesses need to produce clear direction on how they will proceed in light of the Coronavirus. As the overall concern for personal health continues to grow, brands will be forced to communicate how they are not only taking precautions with their own employees but also how quality control mechanisms are increasing to ensure no contamination or spread of the virus to their consumers.
HOW MARKETING WILL NEED TO SHIFT
- Overarchingly, marketers will have to do what they have always done best – adapt. Staying on top of the latest trends, watching the data for insight, and understanding new consumer behaviours will be key in driving successful marketing strategies moving forward.
- As mentioned, in-store traffic is non-existent and demand is rising as NZ is forced to stay home. As this trend grows, in-home online and TV activity will increase and advertisers can reach their target users during this time by investing more heavily in television (traditional or Connected TV), digital, and direct mail advertising over in-store, out-of-home, and physical advertising due to decreases in public foot-traffic.
- As the world pushes through this challenging time, compassion in advertising will be critical to ensure that brands remain in a positive light. Businesses should be a resource for their employees, consumers, and other key stakeholders. Ensuring that brands take a compassionate approach to advertising will ultimately lead to long-term consumer trust, satisfaction, and loyalty.
As the impact of COVID-19 continues to unfold, brands, agencies and business need to keep a close eye on the changing consumer behaviours and impacts on individual industries to ask the right questions, ensure they are prepared for any outcomes and find new opportunities.
WHAT TO CONSIDER FOR YOUR BRAND OR CLIENTS
- What industry is your business in?
- Is your business brick and mortar, eCommerce, or both?
- How are your core target markets or users impacted by COVID-19?
- How is Coronavirus influencing your consumer’s buying habits?
- How can you provide more value to those customers at this time through your products or services?
- Is this an opportunity for your brand to go above and beyond to give back?
- Are your employees safe and are you offering safe consumer experiences?
Our team at Fire Media is working to adjust all current and future campaigns to best fit the needs of brands and consumers in as close to real-time as possible. If you are looking for support during these challenging times, please contact us and we can help you prepare for the coming months.
Above all, we urge everyone to be as safe as possible and refer to http://covid19.govt.nz/ for more information.
Kia Kaha New Zealand!