As COVID-19 spreads around the world, a global economic crisis caused by the country-level shutdowns has started to outline. These restrictions are put in place to unburden healthcare systems, but consequently every industry is crushed with advertising budget expected to be heavily cut. How has the aftermath of the epidemic affected the advertising markets in Central and Eastern Europe so far, and how has it influenced the agencies’ everyday life?
COVID-19, or the Coronavirus has swept the world off its feet. And we don’t really know when it can stand up again.
The new Coronavirus, first identified in December 2019 in Wuhan, the capital of China’s Hubei province is a relatively highly contagious disease, and with sometimes severe respiratory symptoms, the number of people needing breathing or life support can easily overburden a country’s healthcare system. When this became known, along with the recommendations of WHO, governments initiated travelling and social restrictions, companies with millions of employees switched to online work, and slogans such as #stayathome, #flattenthecurve and social distancing were born.
Though the medical impact has been apparent for months, the immediate result of the measures aiming to tackle this pandemic, an economic crisis has recently started to take its toll on a global scale. First, travel restrictions quickly brought tourism to its heels, subsequently any form of entertainment requiring leaving the house or meeting groups of people was banned, in some countries partial curfew was introduced. Meanwhile the demand for goods deemed to be essential or worth having during a lockdown just skyrocketed, yet this can include a curious line of products: from canned food and bottled water to toilet paper and video games.
How has COVID-19 affected the advertising industry so far?
Not only companies involved in tourism, hospitality, entertainment such as concert, sports etc. were hit – their advertising and agencies were, too. Due to the unforeseeable end of the restrictions in place, clients have been rescheduling, postponing or sometimes cancelling campaigns, weCAN’s Czech partner Comtech_CAN has reported an instant 30% drop in the volume of orders.
The time of emergency has of course paved the way for new needs: communicating State and social responsibility messages became vital, and there is nothing more current, than educational, emotionally uplifting or donation-promoting campaigns. “Smart and fast brands can create a soft campaigns and gain the ‘lovemark’ points” says Petr Vlasak, Creative Director of Comtech_CAN, who also shared two examples from the Czech Republic: PRAHA DRŽÍ SPOLU is an information and general help site from the city of Prague, and #chranimtebe, an initiative to wear masks, by a consortium of banks and mobile operators.
This situation can also be used by less affected market players, if they are adept, as Vlasak put it: “More flexible agencies manage to stay updated by adding a face masks into a brand/product communication or offering a media space for good purposes instead of commercial campaign.” Ascanius Media Croatia shares this experience, as “serious and educated” advertisers stayed on the market with relevant and/or emotional messages.
E-commerce has understandably experienced a boom: Between February 24 and March 15, Croatian online sales were up by over 50%, also pushing previously ‘offline’ companies online, those who felt the need for their products or services, now creating extensive online presence.
But the havoc on the market is undeniable. Sonja Litaj, Client Service Director of PAN Communication Agency in Slovenia formulated a typical paradox of this time: “There are certain products, which are essential in this crisis, therefore they don’t need any advertising: shops run short on these all the time. In the meantime, other products became less significant, and as consumers stay at home, and later start to feel the economic consequences, they probably won’t be able to spend on these either.”
How are we all working during the pandemic?
Agencies all over the continent had the advantage of being able to quickly switch to home office mode and online work: our partners reported, that 65-100% of their employees is able to work from home, and that they all acted in moving home in the middle of March, generally before governmental restrictions.
Experts from Romanian partner Thegroup said one of the first challenges and tasks was to convince and calm clients: “We had to adapt immediately, to react in real time, to be supportive with our clients and reassure them that we are all in this together, to protect our brands and our customers so that everything is moving forward but is changing and adapting to fit the new times.“
Email, phone calls, Skype, Microsoft Teams, Zoom – the channels and methods are the same, but the impressions are ambivalent. As a current saying goes: “We’re about to find out which meetings could have been emails after all…” And experience shows, that with no physical meeting opportunity at our hands, some things got simpler, but working from distant places also brought some difficulties. Ljiljana Bojanić, Account Director at Serbian New Moment says that communication is slower in this form, and that she needs to be completely sure, that everyone got the message and understood their tasks clearly.
Pink Moon, Croatian creative agency admits, that they highly miss physical contacts and direct conversations, which are crucial in creative processes. And whether you believe it or not, working from home, amongst small children isn’t necessarily a nightmare – Tadeas Haager, Senior Copywriter at Comtech_CAN welcomes the new environment: “especially for creatives, contact with pure children minds is a huge source of inspiration, and we have everyday home insights literally everywhere around us.”
Remote working opportunities have already existed in the weCAN network, our partners say this time best practices can be set up for the future, especially in finance and administration. Unanimously they added that it’s believed their employees will all be glad to return to the office, once the emergency is over.
Can we stay positive?
As Vanda Virovecz, Regional Business Director of Café_CAN International says Darwin’s theory of evolution is proven in business life as well. Those companies that are not able to adopt to the changed era, will most probably vanish. Those who survive shall support clients in recovery. By choosing a positive perspective we can find the opportunities in this situation.
It’s safe to say, that attitudes, outlooks shift from week to week. On one hand, both advertisers and agencies try to stay optimistic, hoping that everything can go back to normal soon, but on the other hand no one really knows if this ‘soon’ is realistic. Uncertainty is seemingly the biggest restraint, and with budgets being reallocated, campaigns being postponed over and over, some harm is already done, though it’s not vital yet – being everyone’s health the primary concern, the question is how long we can remain optimistic.