29 Feb

How coronavirus could impact marketing

Coronavirus is spreading at an alarming rate around the globe, unsettling the stock market and causing operational disruptions to industries spanning retail to travel and hospitality. In a year where analysts expect to see an uptick in media investments from marketers eager to capitalize on events like the 2020 Tokyo Olympics, the outbreak could have a cooling effect and perhaps some less predictable consequences distinct to the digital age.

“As travel is curtailed and supply chains are impacted, [and] if you can’t get your products to market, what do you do? You stop marketing,” Bruce Biegel​​, Winterberry Group’s senior managing partner, told Marketing Dive. “Short-term marketing dollars can be wasted, so you watch people start to pull back a little bit.”

Advertising reverberations of coronavirus —​ which causes the illness COVID-19 — are already evident on platforms like Amazon, where many merchants rely on Chinese suppliers. Some sellers spent 6% less on Amazon advertising in the last two weeks versus that period in 2019, according to a Quartile Digital analysis cited in Bloomberg. Tech giants like Microsoft and Apple have begun to issue warnings that coronavirus could impact their sales outlook for 2020, and Facebook on Thursday announced the cancellation of its closely watched F8 conference.

As bad news snowballs, some analysts remain cautious in adjusting their advertising forecasts, especially as the status of events such as the Olympics will depend on whether the worst of coronavirus burns off with the summer season. One thing to keep in mind, Biegel said, is how the particulars of today’s unprecedented digital connection impact marketing, especially if consumers decide to stay inside en masse.

“We’ve never been through this type of GDP slowdown or crisis environment in this type of e-commerce market, with so much direct-to-consumer and so much focus on ordering and shipping” Biegel said. “What happens if, all of a sudden, your commercial audience is going to be at home more? It doesn’t mean they don’t want to buy those things … they’re going to turn online.”

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