For several businesses, the spread of COVID-19 made it challenging to maintain net positive cash flow. As governments are enforcing strict travel and social distancing measures, customers may no longer be able to visit physical stores for some time. Businesses will need to adapt to the changes in the market, to come out of the crisis without taking a significant hit.
If you want your company to survive the economic effects of COVID-19, you need to evolve with the times and adopt the new-age style of advertising – digital marketing. Its effectiveness in the market, coupled with its extensive and global reach, gives you a taste of what to expect in the future.
How is COVID-19 Affecting Businesses?
To understand the importance of digital marketing and its effectiveness, you need to take a look at the impact of COVID-19 on businesses:
1. Decrease in revenue
Unless you are an essential business, continuing to run your store during the COVID-19 outbreak comes with significant obstacles. Social distancing may be a good measure to keep the spread of the virus in check, but for companies, it means little or no face-to-face meetings with customers.
You can’t run your business at its full capacity due to the lack of demand for your products and services. Even online companies are finding it challenging to keep up with this crisis, as disruptions in the supply chain are affecting their logistics. According to a survey,
“close to 75% of the participating companies reported interference in supply.”conducted by Institute for Supply Management
2. Focus on cutting down on costs
Due to the current nature of the market, companies are going into overdrive to keep their costs low. They use techniques such as laying off their employees or forcing their staff to take unpaid leave until the end of the crisis. On the other end, there is a decrease in the spending power of consumers, as customers have to face pay cuts and unemployment.
3. Increase in restrictions on face-to-face interactions
Brick and mortar stores that rely on consumers walking into their establishments for business are facing immense challenges. With social distancing and quarantines in place, customers are wary of spending time outdoors. As consumers don’t want to risk catching the virus, offline stores cannot depend on face-to-face interactions to generate revenue.
COVID-19 and its Impact on Industries
Although certain businesses will survive the crisis without taking a significant dip in their revenue, some industries are struggling to see the light at the end of the tunnel:
As the expansion is no longer a priority for companies, this industry will be on its toes due to the sudden decrease in demand. While larger businesses may be able to shut their operations for a couple of months, small players will need to take extreme steps to survive.
Physical distancing prevents large gatherings, which is a significant obstacle for manufacturing companies. They have to cease manual operations and rely on automation, which may not be possible for their entire workflow. With the decrease in demand, the decline in sales will decrease revenue considerably.
Service-based businesses such as business auxiliaries, office support, customer service, and event planners are going through challenging times. As governments consider these organizations to be non-essential during the pandemic, they have to comply and halt their operations temporarily. Companies that operate on tiny margins won’t have the capital to sustain their businesses without generating revenue.
Tourism and hospitality
While restaurants can provide takeaway and delivery services, they still have to downsize their operations to keep costs low. The restrictions on travel spell disaster for the tourism industry, as companies will not be able to generate sufficient revenue during the crisis.
Due to government orders, retail stores are unable to open their brick and mortar stores during the quarantine. Even companies that depend on imports for generating revenue will have to find solutions that allow them to maintain a stable supply chain.
COVID-19 – How it’s Transforming the Digital Landscape?
The biggest impact of the COVID-19 outbreak is the way companies allocate their marketing budgets. Offline advertising mediums such as billboards, publications, radio, and TV, are witnessing a reduction in the capital due to the decrease in spending power. Not to mention that during a lockdown fewer people are out and about furthering the ineffectiveness of offline and traditional marketing.
As people are remaining indoors to keep themselves safe, they are spending a large portion of their time online. E-commerce companies are observing a significant increase in digital growth, as consumers are flocking to their sites to purchase products. “The latest figures indicate a 25.4% increase in online traffic for 20 industries. The same report also shows online transactions rising by 42.8% during the pandemic,“ according to a study by Statista.
With COVID-19 taking the center stage, it is forcing companies to take a look at their digital marketing strategies. They not only need to shift their priorities, but also adapt to the changes and manage their resources accordingly. Working towards short and long-term goals is becoming a necessity, as it increases the chances of surviving in the market.
What Should Your Company Do?
While uncertainty is the central theme of the COVID-19 crisis, it is also creating new opportunities. Focusing on digital marketing can help mitigate a portion of your losses. Once the market starts to pick up, you will be in the best position to make the most of the situation.
Online traffic will only continue to increase, as the virus is forcing this change to take place. The rise in the number of users on various internet platforms such as Twitter is highlighting this transformation. As per Twitter, “we have reported 164 million to be the average daily active users. This translates an 8% rise in traffic when compared to the figures from the fourth financial quarter of 2019.” Sports, travel, education, news, finance, and business are subjects of importance among consumers.
Given that there is a sudden increase in online traffic and users, you need to pay closer attention to digital marketing. Providing relevant content is the equivalent of finding a gold mine during the crisis. At the same time, consumers are also looking out for entertaining and comforting media.
As a business, you can’t afford to miss out on this opportunity. Investing in digital marketing right now will give you the edge in the future. Think of it like a seed that you plant today. Not only will you benefit from the short-term gains, but it also places you in an advantageous position for the times to come.
Keep in mind that platforms that rely on online advertising are taking a hit due to the decrease in marketing budgets. As a result, the cost of doing business is going down, a golden opportunity for your business. From the click-through-rate statistics reported by Wordstream, the average figures for Google Search and Bing Search stand at 5.90% and 3.24% respectively. As these numbers hover around 2%, you can see how COVID-19 is driving change.
Fine-tuning Digital Marketing for Maximum Effectiveness
Your goal should be to sharpen your digital marketing strategies so that you can strike when the opportunity presents itself.
1. Join the digital marketing bandwagon
Before the pandemic, you didn’t want to invest in digital marketing, as your offline sales generated sufficient revenue for your business. However, with COVID-19 breaking conventional norms, adapting to the changes is not only fundamental but also necessary to survive.
Don’t worry if you didn’t pay attention to your digital marketing strategies, as you can always resolve this situation. As the online world is becoming the new normal, so should you focus on going digital. Think about it, the lack of digital marketing can be the missing link in your business strategy, preventing you from becoming a dominant market player.
2. Integrate empathy into digital marketing messages
With everything that is taking place globally, you have to understand how people are feeling at the moment. Due to the strong presence of uncertainty, you should be sensitive about your customers.
Go through your digital marketing messaging and determine its tone and relevance. Look at different ways you can change the effectiveness of the content. The focus should be to make it helpful and considerate, as it will resonate with consumers.
Take your time to understand the requirements of your consumers during the crisis. It will give you ideas on how you can change your digital marketing messages. Use this information to increase awareness, while promoting your brand and products simultaneously.
3. Review traditional marketing mediums
Industry events such as exhibitions and trade shows are no longer a priority – the main reason why companies are canceling them. If you participate in these activities or host them, your business should redirect your budget.
It may make sense to decrease your advertising capital to cut down on costs. However, if you pump resources into digital marketing, you will be able to transform your situation. The low cost, coupled with an excellent return on investment (ROI) is a game-changer.
Being on the defense may seem practical, but it can hamper your ability to regain your momentum once the economy picks up its pace. An example of a giant that is still struggling to compete due to the measures they took during the 2008 recession is Sony. Laying off workers, closing factories, and slowing down investments created significant problems. Their competitors, such as Samsung, Nintendo, and Microsoft introduced new products, changing Sony’s stance in the market forever.
It is crucial to remember that this crisis won’t last. Like the drastic changes it introduced, there will be a time when everything bounces back. Focusing on implementing search engine optimization (SEO) techniques, revamping your branding and messaging strategy will give you the edge. If you don’t have in-house expertise, relying on a third-party vendor can help you make this transition.
Find out how we, Eight Media, assist our clients to make the online transformation. Get in touch with us to get access to tools and strategies which will help you take advantage of this situation!