Navigating Your Marketing Strategy During COVID-19

Post by 
Kenneth Shen
Published 
March 20, 2020
T

oday is March 20th and it's tough to have a conversation that doesn’t circle around COVID-19. This crisis is changing the world day by day and showing few signs of slowing down.

With talks of extended social distancing, large scale quarantines, and significant economic repercussions, how should this situation be understood and acted upon? Things will change; the question is what and by how much?

1. Expect an Extended Shift in Consumer Activities

Any competent marketer will tell you that understanding how your product fits into your customer’s life is critical in guiding your marketing strategy. But now, your customer’s life is changing, and if possible, so should you.

"Social distancing" is the term dominating nearly every public discussion around COVID-19. People are urged (or mandated) to work from home, stay at home, and avoid social gatherings. Ultimately, this means spending more time indoors in small groups of people. Currently, we are seeing and expect to continue to see:

  1. A shift from in-person activities to digital ones 
  2. An increase in time spent with family and household
  3. An increase in overall screen time, across all devices

In the short-term, this will benefit sectors that operate in the digital realm such as telecommunications, digital content, and digital experiences. This will also increase the demand for stay-at-home and delivered-to-door products. We expect the leading consumer value propositions of the coming weeks or months to be: 

  1. The ability to socialize digitally
  2. The convenience of not having to leave the house
  3. A supplement to a now limited part of everyday life 

Conversely, this will negatively impact any areas that heavily rely on in-person experiences, obvious ones being hospitality, retail, upscale dining, in-person entertainment, and event services.

2. Adapt Your Customer Acquisition Strategy

We expect shockwaves to be felt through traditional customer acquisition channels for the coming months. The primary drivers being:

  1. Growing uncertainty around economic health
  2. A shift in consumer way of life
  3. Supply and logistical disruptions

Brands benefited by ‘social distancing’ may see a lift in acquisition and engagement, though most other brands will likely see the opposite.

Brands that can adapt to the situation will benefit from doing so. Adjusting your value propositions and outreach methodology to address the situation on everyone's mind will boost engagement metrics. We advise shifting short-term positioning to: 

  1. Associate your value proposition with the at-home and/or digital experience.
  2. Get creative in messaging to address the situation in your brand's voice.
  3. Lower friction to conversion by offering lower-priced options and prioritizing existing traffic (through CRO).

On paid advertising platforms such as Facebook, Google, and Bing, we are observing a slowdown in efficiency as uncertainty around financial health rises. Alternatively, agile brands can take advantage of this opportunity to revamp messaging strategies and fill prospecting funnels while CPMs are low. The trends we are currently observing with our clients vary by industry but can be generalized as:

  • Decreasing ROAS
  • Decreasing CPMs
  • Decreasing CTR
  • Increasing Clicks

3. Get Conservative on Supply Chain and Logistics

Supply chain disruptions have been a major concern since the start of China's outbreak in January. Supply chains with heavy exposure to China will take the brunt of the short-term impact, disproportionately affecting products and companies that are lower on the ‘totem pole’ as manufacturing ramps back up.

We also suspect that many manufacturers in China with the ability to pivot away from producing non-essential goods to producing medical supplies and equipment are currently doing so, or are planning on doing so. Though China seems to be in the recovery phase of their COVID-19 event, we expect most supply chains to be impacted through at least Q2 and Q3. Larger organizations with leverage over their suppliers will see recovery sooner than smaller organizations with less priority.

Staggered behind China, U.S. manufacturing is being significantly disrupted as GM, Ford, and Chrysler-Fiat halt production and the U.S. enacts “war-time” manufacturing policies focused on supporting front-line medical infrastructure.

We advise companies producing non-essential goods with low leverage over their suppliers to immediately adopt a more conservative outlook to mitigate the risks of a significantly disrupted supply chain. 

The Bottom Line:

It’s hard to tell how long it will take for the world to come out of this event. As of now, there does not seem to be much of an exit strategy from global policymakers aside from working full-speed ahead on a treatment or vaccine. Optimistic timelines focused around ‘successful’ social distancing, mitigation, and treatment forecast 2-4 weeks of significant disruption. Less-optimistic timelines focused around extended social distancing and vaccination forecast 6-18 months. At Half Past Nine, we are recommending our clients to prepare for a minimum of 2-3 months of significant supply and demand-side impacts.

The fact is the longer we stay in a ‘shelter-in-place’ mode, the stronger these trends will become. Time will tell whether this is an event that blows over quickly as a blip in our long-term horizon or ends up with more severe and prolonged repercussions.

Now is the time to focus on having the cash flow to weather an extended event, ensuring outreach strategies match supply and demand concerns, and preparing to capitalize on the eventual rebound.


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