The coronavirus pandemic has caused a decline in turnover for many companies. The marketing industry has also felt the effects of the current crisis intensely. Companies offering marketing, public relations, and advertising services have been hit by the problem of both acquiring and retaining clients. Particularly difficult were the snap decisions by companies to terminate cooperation with marketing agencies, motivated by fear and a desire for rapid cost optimization.
Worldwide, the industries most affected by the COVID-19 pandemic have been service industries, including passenger aviation, tourism, food service, leisure services (such as cinemas and fitness clubs), and transport, as well as the fashion industry and automotive corporations. Companies forced to temporarily halt production, close sales outlets, or reduce staff are first looking for savings within their own enterprises, abandoning activities that—in the opinion of management—are not a priority. During quarantine, many companies suspended marketing activities for economic reasons or in the belief that they would not bring the expected results.
- It can be said that the worse our economy is doing, the more strongly it affects the advertising industry. Marketing activities have become additional activities for many entrepreneurs, ones that do not fit within a company budget optimized by the pandemic. For many, advertising activity is perceived as an add-on, not as one of the main features of a thriving business – says Hanna Gehrke-Gut, owner of the GutPR agency, and adds - The pandemic is a time of great uncertainty, which is why it is now harder for representatives of the marketing/advertising industry to acquire new clients. This is connected with companies from many industries suspending investment, as they cannot predict what fate awaits them with the arrival of the last quarter. It is worth remembering, however, that public relations activities are long-term and do not concern individual promotional campaigns, but instead teach companies how to effectively manage their image.
What to do to survive?
What to do to survive?
Companies with a stable economic situation or from industries less affected by the pandemic are still investing and will continue to invest in marketing or PR. However, the current situation is an ideal opportunity to reformat many strategies that may prove valuable in the longer term and bring the company many benefits. It is also worth mentioning that the current communication and image silence on the part of competitors has encouraged many smaller companies to take advantage of this opportunity and showcase their brand on the market.
- An economic crisis is not the best moment to disappear. Companies that are present in consumers' awareness in terms of image are perceived as stronger. And the pandemic will not last forever, so it is worth being ready at all times. Of course, the strategy should first be remodeled, but existing activities should not be abandoned. Communication activities must be carried out continuously, though with consideration of the current situation – adds Hanna Gehrke-Gut.
A new strategy
A new strategy
The ability to cope in the current situation requires exceptional flexibility and openness from companies. In the present circumstances, communication activities should be remodeled so that they support the efficient functioning of the enterprise during the economic crisis.
How is the economic crisis changing the advertising industry?
The dynamic changes we have been facing since mid-March have also meant that representatives of the broadly understood communication industry had to prepare strategies based on new channels. Communication—both with clients and business partners—moved into the virtual world. In a short time, companies had to move their operations online. Webinars and live streams enjoyed great popularity. The coronavirus pandemic also encouraged the use of newsletters and social media.
Flexibility, readiness to act, and ingenuity are the main qualities that marketing, PR, and advertising companies must stand out for. Despite the crisis, it is worth proposing to clients that advertising activities be incorporated into the company budget.
- The economic crisis of 2008 showed that brands that suspended all communication activities regained their pre-crisis position at a much slower pace. However, it should be remembered that when setting a new strategy, one must not forget to properly ground the communication being conducted in the context of current events. Educational activities or CSR activities will be a good move as an alternative to textbook promotion of products and services. In the current situation, representatives of the PR industry are to be a partner for conversations, a business advisor who will help find one's way in a situation difficult for everyone – summarizes Hanna Gehrke-Gut.
Summary
The COVID-19 pandemic hit the advertising industry, forcing companies to make budget cuts and suspend marketing activities. Experts emphasize that a crisis is not the time to disappear completely from the market—brands present in terms of image are perceived as stronger. Remodeling the communication strategy becomes key, with an emphasis on digital tools such as webinars and live streams.
As the 2008 crisis showed, companies that suspended communication regained their position more slowly. Therefore, it is worth focusing on educational and CSR activities, and PR agencies should act as business advisors, helping clients during a difficult period.
