Loss, loss, loss!... Almost everywhere; And those who deny the equation are also lost somewhere. Self-employed people, start-ups, and the MSME sector badly hit by this coronavirus.
Not surprisingly, but corona has forced us to rethink every small aspect of our business. First of all, let's have a look at the loss statistics. This loss can never be recovered.
We are talking about our country India. Yes, we have lost a lot during this pandemic. We have lost our people and yes, it is a non-recoverable loss.
THE LOSERS
IRRECOVERABLE LOSS (as of today)
1. Doctors [more than 1000 (748 in 1st Wave and 420 during the second wave)] (Report shows 300 by 20th May but it has risen to 420 by 22nd May)
2. Teaching Professionals (more than 1000)
3. General Public in India (approx. 700K) (increasing day by day around 4K daily as per govt records and 25K based on the number of death certificates issued)
4. Business & Financial Loss (Street Vendors and Labour)
5. Job Loss (approx 80M)
ECONOMIC LOSS
The outbreak of COVID-19 brought social and economic life to a standstill. A world that forever buzzed with activities has fallen silent and all the resources have been diverted to meeting the never-experienced-before crisis.
Micro, Small and Medium enterprises, which have created more than 90 percent of the jobs in India, employing over 114 million people and contributing 30 percent of the GDP are at the risk. Many of them have disappeared.
India cannot have real and sustainable growth without having a thriving MSME sector.
The COVID-19 crisis will also test the resilience of start-ups in India. Start-ups have to rely on cross-border fundraising. Several founders are seeing their businesses grinding to a halt.
The risk of recession due to COVID-19 in 2021 is extremely high. Protection of both lives and livelihood is required.
The recovery in the economy depends on the timings and magnitude of government support as well as the level of corporate debt and how the companies and markets cope with lower demand.
IMPACT ON THE ADVERTISING INDUSTRY
There’s a rule of thumb in the advertising industry that ad spend follows any rise or fall in GDP. Over the last decade, as global GDP has risen 3-6% each year, the ad market has grown with it to around $646 billion USD in 2019.
Pre-coronavirus, the ad market was forecast to grow to $865 billion USD by 2024.
Ad spends are down 9% on average across Europe, with Germany and France falling by 7% and 12% respectively.
The coronavirus pandemic has caused a considerable drop in advertising spending.
The pandemic has led to an immediate drop in advertising spending. First-quarter data from Publicis showed that year-on-year revenue in China was down 15%.
Countries in Europe saw an average reduction of 9%; Germany and France fell 7% and 12% respectively.
However, there is a deviation from the principle that companies cut advertising budgets during a recession.
In many countries, governments have emerged as advertising buyers to promote public health messages or support journalism.
Brands advertise to raise awareness, increase sales and build loyalty, using media appropriate to each objective. In general, small- and medium-sized enterprises are more dependent on channels that drive customer engagement.
Global brands, on the other hand, run multiple campaigns, including values-based marketing that builds an association with consumers’ identities.
The power of brands to choose where to advertise means that media reliant on advertising – or overexposed to certain categories – may suffer.
Analysis shows that all media are affected, though, for obvious reasons, travel and retail media are experiencing the worst.
Digital news publishers have been particularly impacted. Brands avoiding associations with coronavirus-related content are withdrawing spend and blocking keywords across programmatic channels on news websites.
THE EARNERS
In years to come, we will look back at 2020 as the moment that changed everything. The rapid spread of the unprecedented COVID- 19 pandemic has put the whole world in deep jeopardy and changed the global outlook.
This pandemic is not only a global health emergency but a significant global economic downturn too.
It has been the biggest challenge to the overall business industry this year. Some have been beneficial while whereas some have seen a major setback with the impact of this pandemic.
The government of India announced Janata Curfew on 22nd March 2020 and a lockdown policy to limit the spread of this deadly virus which has sent millions of people to death beds.
The Sensex fell by 3934.72 points on 23rd March after the announcement of lockdown. This was the biggest fall after the Harshad Mehta Scam news broke down.
The fall in Sensex was due to the stoppage of movement of goods and services which caused major challenges to business.
The most serious challenge was being mere Survival in this cut-throat business environment.
The market had fallen to death and has now again risen to stars. Let’s take a look at the impact on certain key sectors:
Pharma Sector
Health Care Sector
Consumer Goods Sector
Agrochemicals/ Fertilisers Sector
As lockdowns became the new normal, businesses and consumers increasingly “went digital”, providing and purchasing more goods and services online, raising e-commerce’s share of global retail trade from 14% in 2019 to about 17% in 2020.
Nowhere else has unprecedented and unforeseen growth occurred as in the digital and e-commerce sectors, which have boomed amid the COVID-19 crisis.
The pandemic has mostly benefited the world’s leading digital platforms.
UNCTAD Acting Secretary-General Isabelle Durant said: “Businesses and consumers, those were able to ‘go digital’ have helped mitigate the economic downturn caused by the pandemic."
Mahesh Vyas, Managing Director, and CEO, CMIE, said: "The lockdown has taught business managers lessons to manage with lower stocks."
The corporate sector clocked bumper profits in the September quarter (Q3) of 2020 mainly due to significantly lower spending on inputs compared to sales, according to the Centre for Monitoring Indian Economy (CMIE).
Both sales and expenses plunged sharply during the lockdown quarters of June and September 2020, Mahesh Vyas, Managing Director, and CEO, CMIE, said in an article, adding that expenses fell more sharply than sales did during the said period, which helped the corporate sector record bumper profits.
Based on an article published by Fareeha Ali for digital commerce 360. The coronavirus pandemic has put e-commerce at the forefront of retail.
These charts show the impact of the COVID-19 outbreak on online retail, including U.S. online sales growth, retail bankruptcies, curbside pickup, and traffic on Amazon.com.
Consumers spent $861.12 billion online with U.S. retailers in 2020, up 44.0% from $598.02 billion in 2019, according to the latest Digital Commerce 360 analysis.
Online spending represented 21.3% of total retail sales last year, compared with 15.8% the year prior.
CONSUMER BEHAVIOR SHIFT
The pandemic is likely to shape the industry in the long term. Businesses are prioritizing survival for now, but in the future will have to find new ways of brand-building.
The change in people’s media and consumption habits will force a rethink of how best to do so.
Wherever consumer behavior has shifted, advertising spend has adjusted in response. It makes little sense for advertisers to spend on media that have no audience.
As confinement measures were introduced around the world, out-of-home and cinema advertising shrank almost instantly; print advertising also fell.
Meanwhile, in-home media usage went up. TV viewership has climbed, but digital consumption has increased even more: use of social platforms and streaming services have risen almost everywhere; gaming has also grown dramatically.
Advertisers have adapted by following consumers, which means prioritizing digital advertising. The online environment is favorable for “direct response” campaigns – those encouraging quick purchases by consumers – an attractive proposition for brands spending cautiously and looking to drive sales.
In the first quarter, Facebook and Google saw better than anticipated first-quarter revenues.
Does this imply that digital-first markets are better positioned to withstand the effects of the pandemic?
Uncertainty about people’s spending and consumption patterns makes it hard to determine if China is a test case for the rest of the world.
As Brian Wieser explains, “One could argue that many elements of human behavior are going to change permanently. The products we want could be radically different in the future – so data that was used previously to inform advertising and marketing spend is not necessarily going to be useful.”
Indian advertising spends recorded a 21.5 percent drop in terms of value in 2020 due to the pandemic, but total ad expenditure is expected to register a 23.2 percent rise in 2021 to Rs 80,123 crore, indicating a strong recovery is underway, it said.
Print media is expected to recover smartly in 2021 with a projected ad spend growth of 23 percent at Rs 12,731 crore, while digital media will see a sharp bounceback with ad spends registering 28 percent growth to touch Rs 27,700 crore during the year, according to the latest GroupM forecast report ‘This Year Next Year 2021.’
Tushar Vyas, president, growth, and transformation - GroupM South Asia said, “There are multiple advancements happening in technology which is transforming digital advertising and other mediums.
India being a diverse country, digital will keep growing, especially with the rise of content platforms and its availability in multiple languages powered by the growth of 3Vs.
From a predominantly ‘at home’, ‘urban’, ‘English print’ & ‘TV’ consuming market, the Indian media consumer evolved to include ‘on the move’, ‘rural’ & ‘regional’ counterparts, experimented with digital media in the early 2010s’, adopted social media in the middle of the decade and started consuming digital videos voraciously after 2016.”
THE LEARNERS
The pandemic has caused advertisers of all sizes to rethink the type of campaigns they should run.
For many, this means focusing on spending: in a survey, lifestyle advertisers reported that acquiring customers is now their priority, and other consumer categories are also adapting their marketing strategies.
Media – such as TV – that work well for identity-based marketing may not be the priority in the near term.
For others, however, focus means changing the message. IAB data shows that 73% of advertisers have modified or developed new assets since the start of the pandemic.
Of these, over half (53%) are increasing messaging that emphasizes the mission of the company.
Unilever, one of the world’s largest advertising buyers, is adapting on both fronts. According to Conny Braams, Chief Digital and Marketing Officer, “Unilever is guided by three beliefs:
Brands with purpose grow,
Companies with purpose last and
People with purpose thrive.
The pandemic will not waiver our commitment to the purpose-led business, nor will it change how we position our brands. More broadly, we are witnessing a change in consumer behavior.
We know that life in the time of coronavirus is increasingly a life lived online which has led to an acceleration of digital adoption and e-commerce.
Time spent with certain media channels has increased during the lockdown, so we are adapting to these changes, shifting to a greater focus on in-home channels versus out-of-home.”
As Brian Wieser Global President, Business Intelligence at GroupM describes, “Companies will find that there’s never been a better time to pitch ideas that involve real transformation.
People will be more open-minded and we’re going to see businesses find ways to push transformation even faster.
For corporate decision-makers, this is going to be radically cheaper than it was a few months ago.”
The second transformation is the decrease in the value of Pay-TV to the benefit of ad-supported streaming video services. Over the past decade, advertising on Pay-TV (subscription services covering linear and digital television) has increased.
This is in contrast to the medium’s decrease in viewing hours across almost every age group, and the widespread adoption of smartphones and tablets that make it less likely that consumers devote attention to adverts on TV.
Some TV viewing has moved to other distribution platforms, notably Over-the-top (OTT) providers.
As a result, many of the largest media companies have increased investment in their OTT services in recent years; this trend appears set to continue, with coronavirus accelerating consumers’ growing preference for D2C content.
Combined, these factors are likely to expedite large brands’ shift away from Pay-TV.
That said, TV-style advertising is far from over. There is clearly, consumer demand, for ad-supported streaming video services – evidenced by their proliferation around the world.
Their so-called lean-back TV environment, alongside the targeting, that digital media offers, is perfect for attracting advertisers that would once have looked first to Pay-TV.
Thirdly, as confinement measures relax and out-of-home advertising grows back, these typically offline channels will accelerate their shift to digital.
This will increase pressure on the advertising industry to improve how it measures the return on investment across different media, devices, and platforms.
Direct response marketing has been prioritized by many advertisers, many of which rely on it for revenue generation. As ad spend reduces in general, spending on digital platforms has reduced more slowly.
In the longer term, this may strengthen the position of digital platforms in two ways.
First, they appear to be suffering less relative to others in the advertising ecosystem, enabling them to emerge faster and stronger from the crisis.
Secondly, they own behavioral data collected during the pandemic. In an industry where all players are trying to understand consumer habits, this will give platforms a competitive edge going forward.
Also, the research shows that half the money brands spend with online publishers is lost in the programmatic advertising supply chain – and 15% is unattributed.
This underlines problems with the media industry’s business model, where a “publisher’s paradox” can see traffic increase, but not revenue.
These challenges are exacerbated by the pandemic and suggest that greater transparency in the value chain is required.
It is likely that technology companies, with analytics and ad auction technologies, have a head start about how to do this compared with other players in the industry. Indeed, the expectation is that digital advertising will continue to grow in the future.
Conny Braams outlines Unilever’s position: “The current trend of online shopping will continue in the medium- to long-term, with e-commerce becoming an increasingly important channel within the marketing mix.”
Clients and agencies have always sought the best way to invest. Any move towards business outcomes and what constitutes value to the advertiser will need to be managed as effectively as before.
GOVERNMENT RESPONSES
Most governments prioritized short-term responses to the pandemic, but some have also begun to address longer-term strategic requirements for recovery.
Several governments in developing countries have intervened to protect businesses and individual incomes.
In Latin America and the Caribbean, for example, Costa Rica's government initiated a platform for businesses without an online presence, and a smartphone app and texting service to facilitate trade among producers of agricultural, meat, and fish products.
In Africa, Senegal ran a piece of information, education, and awareness campaign on the benefits of e-commerce across all segments of the population.
In Asia, Indonesia launched a capacity-building program to expedite digitization and digitalization among micro, small, and medium enterprises.
ACTION PLAN FOR E-COMMERCE INCLUSION
E-commerce offers immense potential across the SDGs. Efforts, therefore, must be made to harness this rapidly emerging tool.
Building an enabling e-commerce ecosystem requires changes in public policy and business practices to improve the digital and trading infrastructure, facilitate digital payments and establish appropriate legal and regulatory frameworks for online transactions and security.
The approach must be holistic. Policies should not be made in silos.
To capture value from digital trade, digital entrepreneurship must become a central focus.
This requires faster digitalization for smaller businesses and more attention to digital entrepreneurship, including reskilling, especially for women.
Countries also need better capabilities to capture and harness data, and stronger regulatory frameworks for creating and capturing value in the digital economy.
Governments need to prioritize national digital readiness so that more local businesses can become producers in the digital economy, not just consumers.
Lastly, the international community needs to find new, bold, and smart ways to work with governments and the private sector to leverage these opportunities.
Better dialogue and collaboration are needed to identify new pathways for the digital economy.
Since the outbreak of the pandemic, more than 30 eTrade for all partners have worked together to raise awareness of the e-commerce opportunities and risks emerging during the crisis.
They have also identified ways in which businesses in developing and least developed countries could overcome the challenges.
The COVID-19 repository launched in the fall of 2020 and the new COVID-19 and e-commerce report are the initiative’s latest collective efforts to build a sustainable digital future.
MARKETING STRATEGY
Corona is everywhere! Yes, it's not only our lungs or exposed surfaces where it might be but our business, ads, conversations are infected by the virus.
We mean whether we talk about business profits or losses, or watch Tv commercials (Sanitation, Health Insurance, Health Care products, etc.), we listen to this Corona Virus everywhere.
No doubt some of those ads are awareness-based, but few of them are unethical having no scientific evidence behind their content.
You can be tricky at times but always consider customer emotions.
During situations like these, there is a great tendency to find loyal customers and also chances to lose them forever.
It is well understood that not everyone or every company can start manufacturing against its product line but how can they fit themselves in the situation is a matter of smart marketing strategy.
As said earlier, the pandemic has caused advertisers of all sizes to rethink the type of campaigns they should run. We need to plan out:
What we can offer to society for their well-being.
How can we provide some add-ons in addition to our regular services?
How can we add emotions to our campaigns?
How can we make a friendly impact (including awareness, not fear) with our sales pitch on the user?
How can we have the best guess of consumer behavior?
These are only a few things, that are constantly wandering in my mind. Corona has killed the Cold calling.
Making an effective cold call is tricky because of the variety of possible responses from your prospect.
Many times, the recipient will simply hang up; in the worst-case scenario, you might even receive verbal abuse.
And, yes we have experienced it. We don't hesitate to share my experience of making such a silly mistake in times of crisis.
We were not aware of the current situation of one of our old clients and we inadvertently sent him a Gift card; and we were sent a picture in response instead, in which a cylinder was attached to fix the oxygen level of that client.
Also, that incident has changed our perspective towards the current marketing scenario & we started out to work out new strategies after some analysis.
Even that incident led us to write a blog on this issue, as we don't want someone else to make the same mistakes we did.
Analytics tools can give you an idea of how effectively your campaign run & what you can do to improve it in the future.
But as mentioned earlier in a report by "publisher's paradox" your revenue may not be generated.
So need to decide what should be the frequency of the ads you need to run during the crisis.
You can't exhale the budget unnecessarily whether you are promoting your own brand or during advertising for a client if you are running an agency.
You have to plan according to your business, product, target audience, niche & most importantly as per the consumer requirements.
What we have noticed is that most of the telecom companies are missing a big opportunity.
We are well aware of the thing that we are not their advisors, but what we can suggest them they should think of providing special internet packs for students for online studies to keep them as loyal customers in the future.
SALES PITCH
"Empathy is the art of understanding someone else’s circumstances". Our suggestion is very simple: Always think from the perspective of the user, especially in difficult times. You need to work on the consumer benefits instead of defining yours.
If your product or service benefits the customer it benefits you automatically. If any user or customer senses or smells that your pitch is not effectively synchronizing with their emotions, you are on the verge of losing that customer.
CONCLUSION
However, every crisis brings about a unique opportunity to rethink the path undertaken for the development of a human being, community, and society.
The COVID-19 pandemic has a clear message for the Indian economy to adopt sustainable developmental models, which are based on self-reliance, inclusive frameworks, and are environment friendly.