Six changes for the advertising industry after the coronavirus crisis

For the advertising industry, the effects of the corona virus will be felt for a long time after the crisis. Right now, many marketing activities are going nowhere - either because consumers are no longer receptive to them, or because it is too big a risk for brands to spend money in such a volatile situation. Facebook and Google have already announced that they could lose more than $44 billion in advertising revenue due to the coronavirus.

By the time a large proportion of brands start spending money on advertising again, the global situation will have changed fundamentally. Already, the crisis has significantly changed consumer behavior, especially with regard to the use of technology, e-commerce, live streaming, e-learning, gaming and online grocery shopping.

But instead of complaining about lost sales, it's important to learn from what happened and use this lull to prepare for challenges ahead. As the digital sector is certain to play a role in the market recovery, brands need to be prepared accordingly.

Based on our observations over the last couple of weeks, here are six things we expect to happen once the crisis is over:

1. in-housing becomes hybrid working

In-housing has been one of the biggest trends in recent years, and companies are increasingly turning to management consultancies to successfully assemble new teams. This will change, according to Corona. Not to be misunderstood, companies will still need in-house experts (and if they don't have them yet, they will still need management consultancies to transition as quickly as possible).

However, the crisis has taught us that advertisers are more flexible to economic changes when they work with agencies. It is much easier to terminate activities via an agency partner than to close a specially tailored in-house agency.

Forecast: According to Corona, In-Housing will continue to be relevant and grow, however, companies will also increasingly partner with agencies. The hybrid model (in-house marketers working and coordinating with service providers) will grow and evolve.

2. traditional marketing will die out as far as possible

The Corona crisis impacted many countries with incredible speed, affecting consumers' lives as well as advertisers' marketing activities almost overnight. Campaigns were ended, events canceled and launches postponed.

While it is possible for companies to adapt digital campaigns accordingly, this is difficult to do with traditional campaigns - with pre-produced OOH, print, and TV advertising released unchanged, wasting both valuable time and money.

MGM Studios' decision to postpone the release of the latest James Bond film, "No Time to Die," has far-reaching consequences.

As a result, the company is reportedly suffering a loss of $30 million to $50 million from wasted advertising dollars - including the $4.5 million cost of the Super Bowl TV spot.

In turn, companies were able to respond much more flexibly online to the restrictions caused by the virus. With creative ideas such as live streams, podcasts, webinars or even virtual reality experiences, they stayed in touch with their customers. Disney was even able to Market launch of new streaming service Disney+ to be brought forward in the UK and Europe and inspired many people who are currently stuck at home.

Traditionalists often talk about traditional marketing being particularly crucial to building a brand. But the reaction to the virus clearly shows that digital marketing can take over this role with ease, as it works cheaper, faster and better.

Forecast: Companies will increasingly allocate budgets to digital marketing. Many will increase their digital presence and develop new digital business models tailored to specific target groups online.

3. data remains the heart of marketing

"If you torture the data long enough, it will confess," Ronald Coase once said. This quote is particularly apt for the advertising industry, where data plays a central role - so start torturing it! Correctly interpreting data means understanding your own customers and their behavior. This is especially essential during a crisis like this one, when there are rapid changes in consumer behavior.

Those who interpret and understand data correctly develop a detailed understanding of existing and future customers and gain a significant competitive advantage. Companies should base their marketing on data and learn to adapt their marketing measures and communications to the behavior of (potential) customers using appropriate data. They need to respond quickly to external changes and optimize their spending to achieve short- and long-term goals. This is impossible for someone who is not data-driven.

Forecast: Advertisers will rethink their marketing strategy in the months following the Corona crisis. The majority will decide to become more digital, data-driven and technology-oriented in the future.

4. brands will increasingly undertake "real" transformative projects

As a reminder, when the crisis is over, advertisers will try to become more data and technology driven. This is not about a bit of ad tech here and a few MVPs there. It's about a long-term transformation that needs the full support and willingness of all C-levels. Counterproductive, political games such as conflicts between IT and marketing have no place here, because becoming a fully data-driven organization requires commitment from all sides.

Artefact has developed a model to help companies successfully implement this transformation. It's not easy to make the move from small projects that just make you feel "data-driven" to truly transformative projects that prepare the business for the future. The sooner you start doing this, the better. Brands that started this a long time ago will have an easier time coming out of the current situation stronger than those that were unprepared.

5. brands will be forced to become truly customer-centric

Many consumers are currently adhering to what is known as "social distancing," either voluntarily or by force. They are isolated, in quarantine, in the home office or bored at work. Probably many have a greater need for social contact than normal, since they can't leave the house at all or can only do so to a very limited extent. So where do they go with that unmet need for contact and closeness? That's right, they go online. Since the outbreak, Facebook, for example, has had a Increase of 70 percent for video calls recorded with Facebook Messenger.

Social media channels have always been a great way for brands to connect with consumers. Especially now, brands should use these channels wisely and help their community through the crisis period. They should be responsive, offer them support, and be present - either doing good or providing entertainment.

For example, jeans maker Levi's has acted quickly to entertain fans stuck at home, by launching daily online concerts on Instagram Live. Every day at 5:01 PM - 5:01 PM, a nod to its signature blue jeans - Levi's streams a live performance by one of its brand ambassadors, including Snoop Dogg, DaniLeigh and Kali Uchis.

Once again, the importance of flexibility and the digital side of marketing is evident here. Marketing is not just about marketing and selling products, but also about building and taking care of your customer. This is difficult to do with traditional marketing alone. Brands need to understand and also address how their customers' needs are constantly changing.

Forecast: Advertisers will increase their budgets for social media and community building. Even more money will be shifted from TV to digital channels.

6. brands will rethink their social responsibility

If the coronavirus has taught us one thing, it's that we all have to look out for each other and act together for the good of society. Whether we are on the front lines at the hospital, stocking the shelves at the supermarkets, or practicing "social distancing" and staying home, we are all in the same boat. Each of us has a function to perform and a responsibility to do what is in the best interest of society.

Advertisers are also playing their part. They are in a special position because they have direct contact with communities and consumers. They should use this position to address the changing needs and concerns of their consumers and have a positive impact on them. One brand that has risen to this challenge is EE, the UK mobile operator. It provided vulnerable customers as well as those with disabilities with minutes, SMS and data volume available free of charge, to help them stay in touch with their loved ones during the coronavirus lockdown.

Brands that do not behave responsibly, on the other hand, may face a consumer backlash. In Germany, for example Adidas was criticized , because the company is refusing to pay rents during the crisis - a move that could damage the brand's reputation in the long term.

Forecast: Consumer behavior will change. Consequently, it will also change the interaction between brands and consumers.