The companies are supposed to support their stakeholders, especially, in this time of vicissitude when the economy is at a standstill and earning a bread has become more difficult. The nations are raging towards an impending stagflation and hence, a declining GDP. Such a situation is considered to be stagnation of inflation. The phenomenon is characterized by high unemployment (taking into account the ruthless sacking of employees), high rate of inflation with halt in demand, looming over a long period of time. However, the company themselves are incurring heavy losses. The domino effect results the entire supply chain to get adversely affected.
When it comes to advertising companies, we cannot say that it has been all bad for them or otherwise. Some aspects of it are somehow positively affected since so many people are spending their time inside their homes during the quarantine days. Since more and more people are getting dependent on the internet, specifically the online streaming sites, music portals like Spotify, YouTube, gaming and television, the spending on their advertisement must have sky rocketed. But the games such as the Olympics or any other outdoor event had been cancelled which did not do any better for the advertising companies who had already spent a fortune in charting out their plans of publicity, PR and commercials.
According to the Global Ad Trends report (by World Advertising Research Center) forecast the advertising spend would have reached 660 billion dollars this year if there had been any intervention from the virus which will now be re-allocated for later in the year of 2020.
WARC Data’s managing editor, James McDonald is an interview told that on account of a major disruption from coronavirus long-term restrictions on movement and large gatherings would be unavoidable. On the contrary, if more time is being spent at home, people would eat at home rather than restaurants. A senior analyst, Collin Colburn, said delivery services such as GrubHub might amp up advertising in this case. However, consumer-packaged goods or manufacturing-related companies might decrease ad spending if there are inventory issues due to constraints on the supply chain.
Small and local companies have their doors shut for an unfathomable period of time. So, local advertising hardly will yield any results in a situation where they simply need the enough money to suffice their daily requirements. Delores Tronco-DePierro, owner of a West Village restaurant claimed that she had celebrated her highest week of sales ever at the ‘Banty Rooster’. Now, she had to entirely lay off the 33-person staff and has been constantly dealing with her stakeholders like loan agents, insurance companies and suppliers to try to stay afloat during the pandemic.
Even tech giants like Microsoft and Apple have issued warnings that Covid-19 could impact their sales outlook for 2020, along with Facebook cancelling its F8 conference.
Co-Founder of Kirin Crayons (the integrated marketing solutions provider to Chinese brands in India), Sukrit Singh, said, “Chinese brands are intrinsic to our country’s fabric. Over 8,000 executives (who had travelled for Chinese New Year) are stuck in China. This will have a domino effect not only on the brand and media industry but the economy at large.”
Nevertheless, hardly hit areas of travel and tourism in the stock market have not entirely lost hope and are still spending on advertising, including Carnival Corporation and its cruise ship brands. They claim, “…we are able to quickly move our cruise ships as needed to alternate destinations. We have thousands of guests sailing with us each and every day. We continue to advertise and promote cruising through all our channels with all our brands.”
The future is volatile, unforeseeable and uncertain but the companies are trying to go strong with changing their techniques of advertisement. Most companies are going online and introducing stay-at-home working conditions. Everyone is trying to manage themselves so as not to hit the rock bottom.
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