Expecting a global economic downturn, why businesses should continue spending money on marketing? Shouldn’t everyone be reducing their business expenditure?

Pandemic and economy

The WHO has officially announced coronavirus COVID-19 as a pandemic, meaning the globe should now brace for significant health impact, as well as the associated economic influences.

Over the past weeks, the global economy was not optimistic with coronavirus fears and price war on oil. The 20% drop on Wednesday officially showed signs of the bear market while more economic and social activities are being suspended.

Following the suspension of Serie A games in Italy, sporting events in the world is slowing grinding to a halt with the more games played in closed doors and the NBA just announced suspending games indefinitely.

The sports industry is a huge business throughout the world with numerous associated businesses, notably apparel, travel and gambling. The recently suspended National Basketball Association has a net worth of USD$49.5 billion. On the apparel side, Nike and Adidas worth USD$15.9 billion and USD$6.9 billion respectively.

Since the beginning of the 21st century, human has gone through quite a few disease outbreaks, including Severe Acute Respiratory Syndrome (SARS), 2009-H1N1 influenza A (Swine Flu) and Ebola. While those outbreaks were epidemic rather than pandemic, economic losses to the relevant local market were extensive.

The economic impact of the SARS outbreak, for example, has led to a 10 to 50% drop in sales for retail outlets depending on their industries. And land transport has also seen a 10 to 20% decline. Ebola, on the other hand, has cost a USD$2.2 billion lost of gross domestic product (GDP), estimated by the World Bank.

The amplitude of economic impact by Coronavirus pandemic

There is no accurate estimation of how extensive the Coronavirus pandemic could be. When addressing the media on March 11, German Chancellor Angela Merkel expected up to 70% of Germans could be infected by Coronavirus.

Experts have begun to compare COVID-19 to the 1918 Spanish Flu with their extensive infection rate and covered geographic. To note, the Spanish Flu killed at least 50 million people worldwide with patients all across the world.

Despite culprit of the economic downturn in 1918 cannot be solely aggregated to Spanish Flu as World War I was also in fierce action; a pandemic is never unlinked to an economic crisis.

Marketing in adverse society

Some argued that the potential impact of Coronavirus should not be compared to the pandemic 100 years ago as technology, public health and general knowledge were enhanced during this time. On marketing terms, this is inconveniently very true.

Due to the spread of Coronavirus in China and Southeast Asia, an immense rate of technology adoption was seen. While the benefits of education were believed only to be effective when teaching face-to-face, this method of knowledge transfer is now accepted with online teaching platforms.

As most cities of China were in lock-down, the reliance to the Internet in receiving news and consuming entertainment increased exponentially. And this traffic is great resources for marketing.

This means, while COVID-19 will inevitably affect every part of our life and every type of businesses worldwide, businesses can still thrive in downtimes as long as you have a good digital marketing strategy. For example, you can engage with the establishment of online presence and deepen customer relationships without face-to-face. When it comes to digital marketing strategy, generally it will be divided into two parts- short-term and long-term.

Short-term digital marketing strategy

Short-term digital marketing strategy is based on getting ‘quick-wins’ for your business which encompasses daily, weekly or even monthly planning. In response to coronavirus, many marketers are forced to switch gears and think of alternative outlets, away from event marketing, and seek for online presence while keeping the health of others in mind. Hence, Google Ads and social media are good options for your short-term strategies.

Google Ads

Search engine ads drive targeted traffic to your website’s landing pages through Pay-Per-Click (PPC) campaigns for a certain period or festivals.

For example, if you manage a website of a flower shop, it is a good idea to increase PPC budget for 1-2 weeks prior to Valentine’s day. Through Google Ads campaigns, you can expect online traffic to remain at an all-time high for a period of time and acquire highly qualified leads who intend to purchase your products or services.

Social media

Since people have spent more than two hours a day using social media, giveaways and social media ads are also part of ‘quick wins’ as it potentially helps brands increase followers and conversions.

Long-term digital marketing strategy

Long-term digital marketing strategies typically take 6 months to 1 year or even longer to evaluate the outcome accomplished through an extended and consistent marketing strategy. People may feel frustrated or confused to not see immediate results or an ideal performance. But please remember it can be expected only when it comes to a short-term strategy.

The long-term haul requires continuously adjustment and patience, and the ROI on a successful long-term marketing strategy will pay off.

Now most businesses are facing a dilemma and havoc caused by coronavirus with more and more people working from home. But it presents many opportunities to business owners as consumers are turning to online shopping to get goods they need.

Therefore, from the perspective of a long-term digital marketing strategy, spending money on your SEO and online presence is a brilliant investment. Why? Why you should not top SEO efforts during COVID-19? Because there will be more searches on the internet, and you would not want to miss this opportunity.

Our bet is that consumers will be searching more if they stay home as even if they are self-quarantined for 14 days, they still need products and services. With online traffic rocketing, brand presence is now more important than ever, and it also presents a good opportunity to increase brand recognition, awareness and reputation.

For instance, when COVID-19 broke out in Australia in March, people in Australia have been experiencing a huge demand for toilet paper. As we can see the graph below from Google Trends, the keyword “toilet paper online” searched by people has dramatically increased in March, meaning when goods are scarce, consumers will search for them, if goods are not available, consumers will search for alternatives.

CEO of White Space Marketing Group, Ilene Rosenthal, wrote this post on LinkedIn:

History Lesson: Maintaining marketing spend during a downturn

If you happen to be married to a financial risk analyst, who moonlights as a historian, you have to turn an eye toward history in order to gain perspective on what’s happening today.

Here are a few of those tidbits, culled from a Forbes article from last year.

Yes, last year:

• During the Great Depression, Post Cereal, the category leader, significantly reduced spending. Kellogg Company doubled its spending, increased profitability by 30%, and became the category heavyweight.
• During the 1973-75 oil crisis, the 17-month recession brought about the US’s first miles-per-gallon report. Toyota Motor Corporation stuck with its long-term growth strategy and overtook Volkswagen as the best selling foreign car by 1976.
• In the 1990-91 recession, McDonald’s reduced marketing spend while Pizza Hut and Taco Bell filled the gap. Sales grew for Pizza Hut by 61%, Taco Bell by 40% and McD’s suffered a 28% drop in sales.

Obviously, old data doesn’t guarantee success. All we can do is look back for reference, and move ahead creatively.

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Start with SEO

We encourage all businesses to either continue or start aggressive SEO efforts as SEO will still be one of the most effective ways to reach consumers. Now is the time to do link building, keywords searching, content production, blog writing and more. If people stay home, there is no better time to focus on your website and online presence.

In addition, if you want to provide a new service or launch a new product, it is suggested you build out a page on your website with supporting content. Make sure you have internal links, qualified backlinks, and encompass relevant keywords to support your rankings on search engines.

Digital marketing during a pandemic seems like something to scale back. Here at WeBOOST, we’re helping existing and new clients figure out the best digital marketing strategies suitable for them and do everything they can to remain their website rankings on search engines. With extensive experience in the SEO and digital marketing industry, we work together and help defeat your challenges effectively and successfully.