Looking Back to Move Forward: Navigating COVID-19
Below is an excerpt of Looking Back to Move Forward: Navigating COVID-19, a POV authored by ForwardPMX SVP of Strategy, Tim Lippa.
For many of us, the “R” word has likely been a looming thought in our minds as of late. And we probably feel conflicted about it, given that this time, it isn’t caused by a fundamental economic slowdown, but rather a serious global health crisis happening as a result of the COVID-19 virus. The coronavirus pandemic has been taxing on businesses of all kinds and sizes, on families, and on communities all around the world.
But rather than focus on the current news coverage, we’d like to spend more time on what could come next, and how we can collectively stay ahead of it as marketers. Downturns always involve uncertainty, but companies can manage and grow through uncertain times if they learn from history. While COVID-19 is a unique situation, we can look at past recessions and the strategies utilized to realize growth and gain share to help shape the strategies that will help us get through the current economic environment.
The Current State
Experts agree that given the current slowdown, the economy will decline, at least in Q2 2020. Consumers are moving online for shopping, and local shopping for staples such as household goods, toiletries and essential food items continues to increase dramatically. A few major industries including travel, luxury and tourism are some of the first to take a hit. Local and State governments continue to shut down bars and restaurants and require consumers to purchase food via online or takeout.
How can corporations and retailers adapt to rapidly changing consumer habits, and what does this mean for their marking strategy and budget allocation? eMarketer revised ad spending for 2020 down a few fractions of a percent to $691.7 Billion from $712.02 Billion, suggesting an approximate $22B decline in ad spend for the year from original forecasts. This still represents a strong increase from 2019 ad spend, and digital seems poised to gain ground even with the overall contraction of ad spend. Some advertisers might consider spending less, but should they? Where should brands’ marketing dollars go, and how should they plan for the inevitable uptick that will happen as the world economy comes out of this health crisis?
What Does History Tell Us?
Looking at past recessions can help corporations understand how to deal with our current situation. GDP growth has been positive for over five years in the US, and all indications before the virus hit showed a strong 2020 with low unemployment rates and continued sustained growth. The last major recession in 2009 can guide businesses on how to deal with the current economic state.
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