#1 Digital Marketing during COVID-19: Understanding the COVID-19 Economic Shock

Understanding the economical shock caused by COVID-19 and Digital Marketing

There is a lot of writing about COVID-19 in terms of the number of cases.

Very little is written about what companies should do in order not to go out of the market? 

This is a critical question for our economy, but also for us individually. Therefore, it is worth starting with the adopted assumptions regarding the new socio-economic situation.

 

Information that reaches us in the company – a marketing agency:

  • Since the announcement of the pandemic, we receive at least a few phone calls a day from entrepreneurs who tell us their situation and expect an honest conversation and presentation of possible solutions. In these stories, we carefully analyze the tactics they adopt, share our best practices that we have identified, and often reconnect to see “what works”? We conduct dozens of experiments during the week.
  • We are currently working closely with companies from Poland, Ireland and the USA, in which we are responsible for overall marketing. We are up to date – managing their advertising budget. As a result, we observe economic, social and business changes faster than others. We work with companies mainly from the IT and technology industries.
  • Despite the fact that we will not share detailed information about our actions here, we want to be general enough to answer the question of what can be done to win on the current market. And what we do, for ourselves and for our clients, to survive and win.
  • Additionally, in our team, we devoted a lot of time to the analysis of historical data, and we tried to observe business trends during such large social transformations (wars, previous plagues).

Together with the team, we accept the thesis:

The current time of the COVID-19 pandemic is a time of great changes, during which some companies will earn a fortune and some will go bankrupt.

  • We accept the conclusions: either you will find yourself on a growing trend, or you will be lost in the depths. There will be no middle ground in business. Some industries will die out like the dinosaurs (e.g. paper newspapers). We anticipate very strong consolidation processes in the markets. Those who best adjust to the changes will buy the weaker ones.
  • It will not be possible to position yourself – in the middle, on a straight line. We observe that maybe some percentage of companies will manage to maintain the status quo. The vast majority of businesses will go up sharply, or down sharply, with their profits.

Assumptions and observations

    • Social habits will change – we will start to be more online. We will learn to sit at home, buy online, use more social media.
      Match up or die. This will be a very difficult time for most off-line regional businesses. Most of them must change their way of functioning, and significantly. Either they learn to earn money in a new way, or they have to reckon with bankruptcy.
      The first to open up to new opportunities will occupy entire markets. The cost of advertising (CPC) for the keyword “marketing agency” decreased during the month (March) for 75%. The cost of entering the website from Facebook Ads, the same advertisement (which we ran at the beginning of February), decreased by nearly 80%. On Allegro, as many video cameras were sold in one week as in the last seven months. All outlets in the chain of clothing stores have been closed, and the online store has a turnover of 60 thousand USD a day. As for me, all this is very important information, you have to go online with everything that has been done so far.
      This is a change, not a crisis. Often in my conversations with entrepreneurs, there is a thread – “crisis management”. This suggests that everything will return to normal in a while. And now, they are taking various steps to respond to temporary “market disturbances”. In our activities, we try to find ourselves in the new reality, not to wait it out. We believe that the new reality that began in March this year will change the world and market conditions. Instead of trying at all costs to maintain the current status quo – the business model, in our opinion, more valuable are activities focused on discovering a new way of doing business, tailored to the new needs of customers.

 

Companies need support in attracting new customers as never before. However, they do not want to invest their resources in it. In such a turbulent time, strategic planning and customer opinion surveys will also fail – because right after their completion, these data will not be up-to-date. You have to re-learn a completely new market.

Behavior of companies in response to COVID-19

Business owners behave extremely, where they adopt two extreme attitudes, our observations show that:

Some (in our opinion 95%):
    • They cut everything – mainly costs, entire marketing departments are made redundant, many companies have terminated our contracts. They delete advertising budgets. Defensive Strategy.
Seconds (5% in our opinion):
  • These business owners believe this is the best time to take over the market. In many industries, advertising costs have dropped by as much as 80%, nobody buys them – there is practically no competition there. So is the best time to take over your competitors’ customers. Of course, if there is capital in the company that will be enough for this time. From these companies, we get “irrefutable” offers, either you will work for us 3-4 times as much as for what we agreed, or we are looking for another marketing agency. When the costs of PPC (Pay Per Click – cost of clicking / entering the website) drop, they “throw into the stove”, enter the US market, etc.
  • This is the perfect time for our clients who want to sell internationally. Foreign companies know that “lean times” are coming, so they are looking for subcontractors from “cheaper” currency systems. We see a renaissance in our activities: outsourcing, etc.
    Of course, the adopted strategy depends on the capital stocks held.

What is characteristic of all the companies we talk to is:

Extreme acceleration of the decision-making process and actions

    • One of our clients wrote the e-book within 14 hours – he mobilized all key employees, each wrote an assigned chapter on Google Doc, the next day the product was promoted from the site.
    • I have a lot of conversations, which in most cases end with signing the contract within one hour. The record holder managed to send me a signed confidentiality agreement via the HelloSign application in the 27th minute of the conversation, after the 30th he placed the order and paid the invoice in 10 minutes after receiving the e-mail.
    • In one day, I can have 8 conversations with clients, during which we only deal with designing new products, defining segments and analyzing markets. Often, on the second day, customers expect a ready website and a launched promotional campaign. They give us two days for us to come back with a Return On Ad Spend (ROAS) report. In the vast majority of cases, we manage to respond to such a challenge because we understand that it is the most important thing today.

Not the big ones will eat the small ones, but the faster, the slower ones.

 

    • I have never seen such speed anywhere, and never. In no country and no market situation. I believe that companies may not hit a new product the first time (according to scientific research, they hit the seventh time), but they will be the leaders of their industries in a few years.
    • Not only because today they will learn to attract new clients, but also because they will learn to be faster than the rest. They will become masters of the following process: build, measure, learn.
    • In our opinion: if, in a few years, someone will be looking at the changes that have occurred in 2020, he will say: it was a year of significant acceleration in acquiring knowledge.