Will marketing ever return to normal?
It’s been a difficult few years, hasn’t it?!
With marketing being seen as a cost centre for most businesses, marketers have been amongst the most affected by the pandemic. However, for the same reason, by and large, this has drawn less attention from the mainstream media.
With this in mind, we felt it might be worthwhile to add to a wealth of trade articles and consider whether the marketing industry will ever return to normal. Throughout the pandemic, we’ve spent our time at Posito researching the impact on jobs, online advertising budgets, investment trends and multiple industries.
Let’s take the best case scenario
We can start with the short answer to this question: life and by extension marketing simply can’t ever return to normal. Even if COVID-19 completely removes itself from our lives, it will have a lasting impact not only economically but also socially and behaviourally.
Of course, the longer answer is much more nuanced. The reality is that COVID-19 is likely to remain in society for many years to come, which means that, even in a best-case scenario, we will still have a few restrictions. In this case, COVID-19 would become non-fatal, but would still be a part of society long into the future.
The long-term impacts on society
Perhaps the greatest sign of this impact will be the way that we work and travel. Clearly, even if COVID-19 only creates a mild disease thanks to vaccines, its infectiousness will still create some degree of concern. This will place restrictions on crowds and gatherings long into the future. This by extension will make working from home more pervasive, and business travel extremely difficult.
Global cities depend on travel and tourism. Without this, they aren’t economically viable in the same way. With this in mind, even if bars, clubs, and festivals can reopen and reach capacity (let’s hope), they will struggle with fewer tourists. Until quarantine is off the table, which feels a long, long way off, then cities like London face serious hardship.
Furthermore, following a strong bounce in economic growth resulting from pent-up frustration as lockdown eases, spending will go down to before pre-lockdown levels. It’s hard to see the majority of people having more money, given the losses the lockdown caused. This may not be even across society, but collectively we will be spending less.
This, of course, will affect small businesses and particularly those on the high-street the most e.g. shops, restaurants, hairdressers, bars, and gyms. After the short-term bounce back, it’s hard to see things returning to pre-Covid levels. Even if the government changes interest rates to encourage spending, this is likely to be more of a reactive measure to mitigate the risks.
The next thing to consider is innovation, which often provides hope for the economy and by extension marketing. Many investors have taken a break due to COVID-19, which will have a longer term impact on innovation. Furthermore, the uncertainty of the market is likely to make it harder to model the risks. This will be particularly relevant in the real-world, where innovations are generally harder to implement and scale.
The implications for the marketing industry
With societal changes taken into consideration, it makes it much easier to understand how the marketing industry will be impacted. For starters, it will be a long, long time until businesses in the sectors most affected will have marketing budgets anywhere near to pre-pandemic levels. These sectors include travel, entertainment, leisure, restaurants and so on. After a short period of bounce-back, marketing budgets are likely to lag behind for some time.
In tough times, companies do their best to save their in-house people, which will result in agency budgets being hit more significantly, and agency people. As we’ve profiled previously, there are hundreds of agencies competing for the same budgets. It’s hard to see them all thriving. We could see growing consolidation, and in some instances, the bigger agencies taking work from the mid-market. This is because for CMOs working from home, having one agency to manage for multiple tasks is likely to be seen as more favourable than before.
The other way to consider this is by evaluating the impact on marketing disciplines. It would be naive to think that marketing budgets and people can all be easily redirected online. This is because marketing, and particularly brand marketing, requires an integrated approach that relies on an offline element. We covered this when we evaluated how the best businesses start. Pre-pandemic, a typical growth strategy would include advertising on the tube, using events and creating media stunts to add to a digital presence. Without these initiatives, digital activities can easily be lost in a sea of online noise.
So, the reality is that the marketing industry won’t simply move online. Furthermore, even if digital budgets are doubled or tripled, there isn’t double or triple the available impact. As we’ve shown when modelling digital advertising costs, the largest platforms will still be the same by and large. Furthermore, we’ve all reached a saturation point for digital advertising’s effectiveness.
The marketing areas most affected long-term
Perhaps we should zero in on the long-term marketing impacts offline. If we consider events to begin with, the industry is likely to change dramatically based on what will and won’t be possible. Small events such as media lunches, workshops, networking events and so on could actually become bigger than ever, while larger events may never recover if there are still some restrictions. They’ll become more costly to run and less enjoyable. That said, virtual events are unlikely to ever replicate the sounds, sights, and smells of live events.
The same can be said for outdoor advertising, which, of course, depends on footfall. To understand this, we can consider the cost of advertising in Time Square. Pre-COVID-19, this would have had thousands and thousands of people visiting every day. Without global travel and tourism, these numbers will drop dramatically, making the costs simply not viable. The same can be said for print advertising, for obvious reasons.
Beyond this, there will be a lasting impact on content, influencer, and social media marketing as much of this relates to aspirational lifestyles. Of course, we’ll see nice sunsets, views and so on, but the really aspirational event content will be much harder to get.
Even if festivals can go ahead and crowds can gather, there will be more protocols to follow. Hopefully, we will not be able to perceive this at a societal level, but from a budgetary perspective, it will have a noticeable long-term impact.
In summary…
We can’t know exactly what life will be like in five years time, but we do know that it won’t be like the time before the pandemic. If there is a glimmer of hope, out of the ashes always comes opportunity, and hopefully, much of this will happen in the real-world.