No Panic: The Impact of Covid-19 on Digital Marketing

Returning to blogging after a long break, I must start with the topic that defined a specific era and about which everyone has had their say: Covid-19. Specifically, how the coronavirus crisis, in my opinion, impacts digital marketing.

A few data points

Before writing this article, I searched Google for "covid impact on marketing" and scanned the most popular articles. Here are some key insights to start with:

• Due to the coronavirus, the global retail decline in 2020 will reach 2.1 trillion (!) US dollars
• Buyers trust brand names more than generic products
• Amazon sales have increased by 26%
• Buyers are not ready to return to physical stores en masse and prefer to shop online
• Email marketing is getting a new lease on life (BounceX study)

Overall, the data is quite pessimistic, and there is a reason for it: a decline in indicators is dominant, and it is clear that companies are currently cautious and are not prepared to invest extra in marketing this year, rather than investing more.

The apple doesn't fall far from the tree

If the apple tree has a bad harvest year, there are no apples, and vice versa. It cannot be that the tree is doing poorly, but apples are growing in abundance. If the tree in this case is the economy and the apple is marketing, then it is clear that the marketing industry as a whole is suffering. However, there are many trees in the orchard, and not all of them have a bad harvest year; perhaps the majority do, but not all.

As mentioned before, this is a golden age for Amazon, and similar trends exist for many other e-commerce players, both large and small. If we look at general trends by industry, the image below shows an approximate distribution of the crisis impact.

Wait, what was Maslow's Hierarchy of Needs?

In the mega-graphic above, the relationship between less/more affected industries and the legendary Maslow's hierarchy of needs is clearly readable. In crisis conditions, people first begin to realize their basic needs: physiological needs, fundamental requirements, and only then, as circumstances allow, do the others follow.

In principle, what is happening right now is that humanity is re-evaluating its values, becoming more aware of basic needs, and getting rid of everything superfluous. Of course, when the crisis ends and is somewhat forgotten, everything will return to the old ways, but in the next crisis (and there will certainly be one), exactly the same thing will happen: a greater focus on basic needs.

Shooting yourself in the foot, or sawing off the branch you are sitting on

What does this mean from a marketing perspective? Companies that work in a niche and only care about the highest level of needs - Self-Actualization - will suffer in any case, and then it remains to adapt to the circumstances. Can I provide some other value to society, closer to basic values? If not, then all that is left is to "hibernate" and wait for better times.

Marketing agencies, in turn, have the opportunity to first evaluate their client portfolio. With a long-term view of the future, agencies, to mitigate crisis conditions as much as possible, must evaluate which clients from which industries are partners and which others should be attracted so that crises can be survived as easily as possible.

Secondly, this also applies to the range of services offered. During a crisis, there is a "sudden" increase in demand for in-depth work, a personal approach, and core services that are easy to measure and provide the desired return. You need to analyze in which direction we are digging, what we are offering, and what my position in the market is. When everything goes bad, won't clients run away to a competitor?

Every crisis is a new opportunity

What I personally like the most is that during this crisis, not only companies but society as a whole is getting to know the digital world and digital tools better, using them more, and becoming more interested in them. Ultimately, there is more trust in the online world. The older generation is starting to shop online and is more actively using online communication tools.

Likewise, companies are becoming more interested in opportunities to digitize, adapt, and transform. If anyone was previously doubting the need to focus more on the business side of online, this is a reminder that it will be safer not only now but also in the future. Accordingly, these are opportunities for people in the marketing industry.

Do it with quality and you will survive!

Yes, there is a decline in the economy; yes, there are many marketing agencies in Latvia, and there may not be enough room for everyone. However, it is clear that the marketing industry is far from dying; digital marketing will only become stronger. If you do your job in marketing with quality, you will definitely survive. And it doesn't matter what you do: building websites, dealing with data, or being in the creative or advertising business; if you provide added value, you have every chance to become even stronger.

And conversely, if you have been "getting by" on something worthless, sales, promises, or created illusions, you will likely suffer. The marketing industry is also cleansing itself.