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The Coronavirus Effect on Digital Marketing – How Bad Will it Be & What to Do


The Coronavirus Effect on Digital Marketing – How Bad Will it Be & What to Do

DPBlogPost – Coronavirus1-2

I’m not writing this article to talk about whether the Coronavirus is being overblown or understated, I am certainly no politician! I’m also not a doctor, so any advice I provide here is strictly from a business ownership perspective and through 15 years of experience in Digital Marketing. I’ve also got family in Italy who are currently stuck in their home due to a city-wide lockdown in Sicily, so it helps to understand what the situation is like in an area affected worse than we are currently. They’re “ahead of us”.

That said, the economic impacts of the Coronavirus in the United States are already occurring even if the number of cases isn’t astronomically high yet. The fear has arrived, the stock market is feeling it, and consumers are clearly taking action.

Yes, there’s a toilet paper joke in here. Did you expect anything less?!

Case in point; one of our clients (EarthTurns) had hundreds of orders for hand sanitizer in a day and is heavily backordered. We’ve also had many clients reach out to us already asking about the best way to handle their digital marketing spend during this time. Thus, I want to explain what I know, what I think is going to happen, and what you can do to protect your business from heavy profit losses during this downturn.

What Do We Know?

So far, we have a good idea about which industries are being hit the hardest. These include, but are not limited to:

  • Brick & Mortar Retail
  • Travel / Tourism
  • Entertainment / Local Events
  • Dining
  • Oil & Gas
  • Supply Chain & Production
  • Etc,, etc.

In a nutshell, anything “offline” is being hurt directly by consumer driven behavior changes.

We also know that at the time of this writing there are around 1,500 diagnosed cases of Coronavirus in the United States and this number is expected to climb extremely quickly. Many schools are preemptively closing, Colleges are sending students home, New York has a gathering ban, and many conferences / concerts / etc. have also been cancelled. Even the NBA & NHL have suspended their seasons due to the virus.

People are going to be staying home more whether they’re able to work from home, their company temporarily shuts down and they can’t work, or their kids are home and they have no choice. We’re entering a tough period here in the United States.

What Do We Think is Going to Happen?

There’s no telling exactly what’s going to happen here, how long this virus is going to last, and exactly how much of an economic impact it is going to have. I want to focus again on the business perspective here though.

First, I think “offline” will continue to suffer for many months. The demand to fly an airplane isn’t going to magically reappear until consumer confidence does, and even then, it will take some time during a transition period to get back to where we once were. Retail physical stores will be hurt I think worse than expected because of two reasons

  1. I believe consumer spending will decrease fairly heavily overall, but more so in brick & mortar due to having to physically visit the store.
  2. I believe those not as comfortable with buying things online will now buy online and a portion of that audience will become comfortable with buying online in the future as a result.

On the positive side, my belief is that online sales will not be impacted as heavily as expected. It’s possible that the decrease in overall consumer spending is going to be largely offset by the shift from offline to online. Time will tell. This brings me to what you should do as a business to protect your bottom line during this time.

What Can We Do?

Ahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh!!!!!! Panic!!!!

There are three very different circumstances here that I think are important to differentiate. Under each, I’m going to outline my opinion on what you should do with your digital marketing dollars.

Situation #1 – Your Business Can Still Operate No Problem

You have an online business selling goods or services and are simply worried about overall consumer spending. Your digital marketing spend is going toward selling things online or driving leads to bring in customers where the service can still be fulfilled.

Do. Not. Overreact. In this instance, we highly recommend keeping your marketing spend going. Wait to see if your ROI or demand drops before making any knee-jerk reaction. We recently had a client come to us and ask us to drastically cut spend when they were achieving a 9:1 ROI – just out of fear. This is crazy! Why turn off profitable dollars that are still coming in, and when they may not even go away?

Because demand may drop, the one note here is that you may need to be realistic about your growth goals. While ROI may stay stable, demand overall may drop some. If you only grow 30% instead of 60%, be good to your digital marketing agency 😉. In our experience thus far though, we even have some clients raising budgets because they’re looking to capitalize on weakened competition!

Situation #2 – Your Business is Heavily Impacted but Can Still Operate

Your demand is way down or conversion rates are heavily down, but you can still fulfill your service. Maybe you’re a retail store that’s still open or sell online goods where half the inventory is out of stock, but you can still fulfill the other half.

In this instance we recommend reacting quickly to conversion rates and business economics, but also getting creative. While marketing is sometimes “the first to go”, that type of thinking is typically not the best for your business. Make surgical, calculated cuts and shift dollars into areas where you can remain profitable during the tougher times. This is what the smart companies do; they lean into the areas they can, test out-of-the-box ideas, and squeeze every penny out of them to try and make up for losses in other areas of their businesses. This doesn’t need to be an end-all-be-all marketing spend game, it should be far more data driven than that.

If you’ve got a good ppc agency, talk to them about it. They’ll be sure to have an awesome plan for you on exactly how to handle it and will keep you aware of what’s going on every step of the way.

Situation #3 – Your Business Can Not Operate

You can’t get inventory in the door, orders can’t go out, your services can’t be fulfilled. Maybe you own a restaurant that’s closed, or an online store that can’t get inventory.

In this circumstance, we recommend cutting everything except branded spend (to communicate that you’re down and WILL BE BACK) and focusing on your SEO plan and other tactics that can bear long-term fruit (you can’t “pull down” SEO spend anyway). This is an opportunity – you can still work on your website and improve your rankings, such that when things return to normal, you return on top of your competition. 💪 Remember, you can always allow the ability to take backorders on your website, or future bookings with refund ability to try and get some of that cash flow in the door during the blackout period!

It would be a shame not to mention the classic story of Post vs. Kellogg. In the 1920’s, Post was the king of cereal and when the economic depression arrived, Post cut their advertising spend while Kellogg wisely left theirs running. When the better times came (as they will), guess who came out on top?

The amount of Froot Loops I ate growing up decreased my lifespan by at least 10 years

All in all, I hope everyone stays safe and profitable as we head into some uncertain territory and move through this together. If all else fails and you run out of toilet paper, here’s the best toilet paper shortage solution money can buy.

About the Author

Roger 1

Roger Parent

Hey there, I'm Roger a.k.a. Chief Marketing Dad. I founded Digital Position in 2014, built it until 2023, and then handed the reigns to Grant as CEO. Now I consult the team and spend lots of time with my family!

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