With the ever-changing events as the country slowly walks into lockdown to protect against Coronavirus there is an interesting dilemma in that even successful companies, during this period, are rethinking their marketing spend.
As the world started to self-isolate the hospitality and travel industries laid off thousands of people across the UK as they struggle, if at all possible, to survive. There is hope that there will be a bounce back once the virus is under control but the ability to scale again is going to be slower than the speed we went into the crisis, especially if the capacity has been dramatically reduced through redundancies.
One key enabler to our economy is marketing spend and over the past few decades more and more businesses have harnessed its power to support the growth of their business. With the current shutdown marketing money has quickly dried up and not just from the businesses most struggling from the crisis. I heard the other day that even media outlets are facing crisis point as most of their income has evaporated in the past few days.
This hasn’t just come from businesses in the hospitality or travel industries but also from supermarkets and delivery companies that are holding spending because of too much opportunity, not too little. They are inundated with demand, so one they don’t need to spend money to advertise their wares, but two they have to divert all resources internally to deal with the existing demand, not drum up new business.
So you have something of a perfect storm where traditional businesses such as magazines, newspapers and radio are going to fold in the wake of the drop in marketing support from not only failing businesses but also thriving ones. Ironically this comes at a time when consumption for media goes through the roof as millions self isolate at home. More modern online and digital outlets I am sure will also feel the pain. Even the likes of Google, who are doing a great job – like many in the tech industry, in supporting many millions to work from home, are paid by the marketing dollar. The new reality, as I predict, is going to see more industries affected by the change in marketing spend. The challenge is the rate at which whole markets are being affected, and so quickly, gives me concern that the bounce back will be difficult, if at all possible.
If businesses who are profiting from the current situation are rethinking their marketing spend, we all need to worry. Soon the huge amount of us working in services industry from IT through to finance that have been largely unaffected by the need to work from home are going to see that while our companies can cope, our customers businesses can’t. The recovery will be a lot slower and harder if the marketing engine breaks down completely.