The coronavirus will not ‘change marketing forever’

The Drum 02 Jun 2020 12:05
By Samuel Scott-02 June 2020 13:05pm

The Promotion Fix is a​n ​exclusive biweekly column for The Drum from Samuel Scott, a global keynote marketing speaker who is a former journalist, newspaper editor, and director of marketing and communications in the high-tech industry. Follow him @samueljscott.

Countless marketing pundits have been proclaiming that the coronavirus and resulting global shutdown will change everything in the industry forever. But if the 1918 influenza epidemic’s trend repeats itself today, the economy will recover and return to pre-crisis normal quickly, writes columnist Samuel Scott.

That result will surprise many. Hannes Weissensteiner, a managing partner at Artefact, wrote that “traditional marketing will finally die.” eMarketer principal analyst Victoria Petrock thinks businesses will use virtual reality to hold events and conferences.

Martin Lindstrom wrote that “when we’re released, everything will be different. We’re not going to travel, eat, shop, or exercise the same way… perhaps forever.” Of course, someone had to write about “the Covid generation”. Lastly, a New York Times headline summarised the situation with “it’s the end of the world economy as we know it”.

How the Spanish flu affected the economy

First, the bad news. In one city, merchants in Little Rock, Arkansas, saw their total business decline from between 40% and 70% because of the mass shutdowns. Those companies together lost $10,000 a day ($133,500 per day in 2006 dollars).

“Most of the evidence indicates that the economic effects of the 1918 influenza pandemic were short-term,” Garrett writes. “The influenza of 1918 was short-lived and had a permanent influence not on the collectivities but on the atoms of human society – individuals. Society as a whole recovered from the 1918 influenza quickly, but individuals who were affected by the influenza had their lives changed forever.”

“The Spanish flu left almost no discernible mark on the aggregate US economy,” they write. “The coronavirus arrived to the US at a time of booming stock market values. By contrast, the influenza outbreak in the spring of 1918 occurred right after a downturn: the Dow Jones Industrial Average had actually declined 21.7% in 1917. Yet the stock market recovered substantially during the pandemic, with the Dow index increasing by 10.5% in 1918 and by 30.5% in 1919.”

The findings are even more encouraging because the Spanish flu’s estimated 675,000 US deaths were disproportionately young and middle-aged people in the prime of their working lives. Today, the coronavirus seems most harmful to the elderly. And do not forget that the US recovered quickly from the influenza epidemic even at the end of a world war.

Human behaviour does not change quickly

In the second world war – which had far greater societal effects than the coronavirus today – the US sent 16 million soldiers to fight. One million were black, and they served in segregated units while defeating and then democratising post-Nazi Germany and expunging all types of racism there. Back at home, women went into offices and factories to replace the men who had volunteered or had been drafted.

Of course, that did not happen. We should remember history whenever people predict today that the coronavirus outbreak and economic shutdown will “change everything forever”.

As Swedish strategist JP Catlin (né Hanson) recently tweeted, people lined up for a McDonald's drive-through in the UK the moment that it reopened. Here in Tel Aviv, people packed bars and pubs the night that they reopened after 11 weeks. University students want everything as it was. 82% of festival attendees in Europe want to go to live events again. In the US, restaurant bookings are up.

My point is not to state that economies should or should not open right now – that is for the medical experts in individual countries to decide. My argument is that people will joyfully return to their routines as soon as they can. So, if 1918-1919 repeats itself, economies should rise just as quickly as they plummeted. This artificial and forced downturn should stop when the pandemic does.

For as much as many marketers say our lives will move online, UBS analysts found that 15% of retail sales happened online before the epidemic. During isolation, that amount has risen to 25%. I will put it another way. Even when faced with the risk of a painful Covid-19 death and with the ease of ordering online, people still bought 75% of their stuff in physical stores.

Overall media consumption does not change quickly either

A former colleague in her late 20s once told me that people her age no longer go out – they just sit at home and watch Netflix. Plus, people can do multiple things at once. We can go on the internet on our computers while listening to the radio. We can use our smartphones while watching live television.

Second, we can see that average consumer behaviour changes little on a year-to-year basis but can change significantly over a long period of time. US adults still spend roughly half of their media time with live television and radio – they have simply added a lot of smartphone activity on top of that. Human beings do not change quickly, and media consumption is just another human activity.

So, what happened after the coronavirus outbreak in March? We do not have a lot of concrete, official data yet. But Nielsen referred me to some information that the company has so far.

Comscore has also reported the following changes in device usage.

How human beings do change

America did not magically desegregate after the heroic efforts of black soldiers in the second world war, but the experience of de-Nazifying Germany did lead many to join the civil rights movement in the 1950s and 1960s. Women returned to their traditional roles after working during the conflict, but those experiences directly inspired the feminist movement years later.

Airports are starting to implement a new layer of security checks that include thermal cameras to check body temperature. Turkish Airlines, the airline I usually use to fly to speaking events, is going to downgrade its famous business class catering as well as board planes one-by-one from back to front and ban carry-on luggage.

Still, the world will likely return to mostly pre-coronavirus normal once the crisis has passed. After all, remember that the advertising industry has consistently averaged 1.0% to 1.5% of US GDP for a century – through growth and decline and through war and peace.

The Drum’s readers, especially in this time, want information that is immediately useful. So, in this regular column, I will now offer concrete suggestions as relevant.

Make adjustments only as truly necessary. Most likely, little of significance will change. Most things will continue with minor or moderate adjustments, usually to adapt to new health codes and regulations.

In the meantime, wear a mask, wash your hands and do not leave home unless absolutely necessary. The warm, sunny beaches in Tel Aviv opened last week only because Israel shut down quickly and completely a long time ago. I hope all of you will see such freedom again soon.

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fluUSSamuel ScottHannes WeissensteinerVictoria Petrock
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