As the number of confirmed cases of coronavirus continues to rise globally, the knock-on effects for businesses and the economy are already proving significant. Wall Street experienced its worst crash since the financial crisis, airlines have suspended flights to zones impacted by the virus, and companies are sending home employees in a bid to prevent an outbreak. We look at how the digital marketing industry could be affected if current trends continue.

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Traditional retail faces more challenges

Attempts to contain the spread of COVID-19 have resulted in some authorities (most notably China’s) imposing quarantine measures to restrict people’s movement. This puts pressure on brick-and-mortar retailers, as well as restaurant, bar, and café owners, who suffer financially when foot traffic drops. Advertising and marketing budgets are usually the first to be cut when this happens.

Online shopping from home booms in popularity

The UK government recently announced its coronavirus action plan, part of which involves businesses encouraging their employees to work from home. Several major global employers, including Twitter and Google, have already enacted this policy in a bid to avoid an outbreak. With people confined to their homes, online shopping for groceries and other household essentials is on the upswing, which is good news for online retailers… or it would be except for the fact that many of them rely on supplies from China (which now represents about 16% of the world GDP). With the global supply chain disrupted by current events in Asia, effects on manufacturing and transportation are likely to be significant. Ranking highly in search engine results means little if the products you are promoting aren’t available to purchase.

Major events are put on hold

With the likelihood of the virus spreading when large groups of people gather, conferences, sporting events, concerts, and school trips are being cancelled as a precautionary measure. Google has switched its CloudNext conference in San Francisco in April to a streaming-only event, while Mariah Carey, Avril Lavigne, and Green Day are among a number of artists who have postponed their shows, citing international travel restrictions. These cautionary measures are creating knock-on effects within the travel and hospitality industries – even movie theatres are likely to feel the impact.

Demand for online industries rises

Not every industry is suffering as a result of the global panic – for online education facilities, telecommuting businesses, entertainment streaming services, and some health and fitness companies, business is positively booming. In China, this may have a beneficial long-term effect on the e-commerce industry in the same way the SARS virus did in 2002, launching companies such as online wholesaler Alibaba to new heights and forcing late adapters to get online.

Considerations for marketers

Although the long-term implications of the coronavirus scare aren’t yet known, marketers should be aware of the potential implications for the industry and how they are perceived when they represent a brand:

  • Sensitivity to the global situation is essential and using the virus as a selling opportunity or making off-colour jokes on social media is likely to be very damaging to a brand. Facebook CEO Mark Zuckerberg has announced that the company will block people from running ads that seek to exploit the global health crisis, in addition to providing the World Health Organisation with free adverts to ensure the spreading of accurate information. Many global companies have stepped up to show their support by donating money to charities such as the Chinese Red Cross, believing it to be a more effective long-term strategy than focusing solely on maximising profits.
  • Brands that primarily offer offline services should focus on promoting online aspects of their business (for example, gyms can livestream fitness classes for people to follow at home or offer tutorials for safely using home fitness equipment or making healthy meals).
  • Evaluating the target audience settings for social advertising is crucial if you are putting out ads that could be insensitive in certain locations. For example, tourism adverts in countries with travel bans would be both ineffective and potentially inflammatory. Advances in natural language processing can help brands avoid poor ad placement by analysing content more thoroughly than surface-level keywords and phrases.
  • For clients facing logistical delays, keeping their customers updated on estimated delivery times using multiple channels (website, social media, in-app messaging, email, etc.) is vital for maintaining customer loyalty and keeping one step ahead of the crisis.

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