As the coronavirus pandemic hits businesses and their ad spend, advertising companies worldwide are preparing for a drop in demand, and some are telling their employees to expect staff cuts and furloughs, as CNBC reported. Moreover, the advertising industry is bracing for the wider impact of any economic fallout on client spending, since marketing is often one of the first areas businesses tend to cut during a financial downturn. Some brand advertisers have said they’ve already dramatically reduced their spending.
By Romanita Oprea
According to Business Insider, JPMorgan Chase analysts said that the largest and most heavily leveraged companies, like WPP and Publicis, and those most exposed in Asia, like Dentsu, are the most at risk from advertisers cutting spending, while IPG could fare better because of its data and healthcare business.
But how is this impact seen and felt in Romania and what will the advertising of the future look like? According to Stefan Iordache, COO at Publicis Romania, we are already seeing big changes and not just in the communication industry, but in all sectors. What we are experiencing right now is unprecedented for most of us – and we are not just referring to the business/economic side, but also to the human impact.
“At this time, it is impossible to accurately evaluate the overall impact; we are all working on multiple scenarios, bearing in mind the safety of our employees and the sustainability of the business. A great example of the instant impact is digital behaviour. In less than a week, almost every part of our day-to-day life (both professional & personal) was moved to digital platforms. Fortunately, for our Group, this did not rock our boat, but rather accelerated all the digital projects we had going on and confirmed the relevance of the digital transformation process we have been going through in the past two years. Powered by the synergy between creativity, data, and technology, our aim is to offer to our customers access to the most advanced services and tools on the market, concentrated in four areas of expertise: Communication, Media, Data, and Technology,” said Stefan Iordache.
In turn, Dana Nae Popa, owner & managing director at pastel, thinks that this period has brought about both good things and bad things. Sadly, deadlines are even tighter, and so are budgets. But this is understandable considering the context. “I would love for us to recover as soon as possible and for this dreadful context to become history. I also hope that during these atypical times we do not develop any nasty habits that stick with us, like we saw after the last crisis. The 90- or 120-day payment deadlines were invented back then –and those have not become history, but are still part of today’s reality. And since I mentioned that good stuff has also happened, I’m happy to notice brands’ mobilisation and mobility. The campaigns have much more sense, they are really moving things, and many of them really speak to people – something which will become common sense, I hope,” she noted.
As for the biggest changes they have seen among their clients, pastel’s representative said that one can’t talk about a big change that applies to all clients, because the impact has been different from one company to another, and from one sector to the next. Working with clients from very different industries, pastel’s employees have understood and discovered various ways in which companies could be affected which they couldn’t have thought of before. “For most of our clients the watchword was adaptation. From communication to working from home where it was possible, to stopping and resuming activity, to migrating online in record time, and so on. What pleasantly surprised me was the agility of huge companies to adapt or approve actions or campaigns that would normally take months, maybe years, and, especially, lots of signatures to be approved. I hope this flexibility becomes a habit, and that we will never again speak about stiffness, rigours or processes that block good ideas or actions that can bring real value to the company, to people, to society,” said Nae Popa.
“During this time, our clients are not simply looking to buy campaigns, media plans or consultancy – they want to buy growth, to make sure they can save their businesses and prepare for an uncertain future. Our initial work included reviewing commercial and corporate messages to realigning media plans to be much more dynamic and deliver short-term ROI. They are more careful with budgets and media campaigns, which is normal in this context. This is what we set out to do over the past two months. We have worked around the clock to make sure that in addition to our day-to-day tasks, we could bring to life an innovative, data-driven approach. Which is why we developed and presented in-house products created specifically for this context to help our clients and partners,” said Teddy Dumitrescu, CEO at Publicis Romania.
When it comes to the impact of the pandemic on agencies, in Publicis’s case the impact has been huge first in terms of how people work. Even before the state of emergency, they decided to move all teams (+400 professionals) in Romania to work-from-home mode. At the global Group level, currently there are +80,000 people working from home and successfully managing the communication of some of the most important global brands. This is not an easy task when the whole world is in crisis. “People first was not a cliché. It was (and is) the reality of the past months. Keeping the teams safe, healthy, and close to their families was our first priority. This has led to some fantastic responses from the team,” said Publicis representatives.
In an effort to provide their clients with all the essential information during this challenging period, all agencies within the group joined hands and developed two in-house products: the Strategic Daily Bulletin and White Paper Reports. The Daily Bulletin is a product that was updated and sent daily to clients and included analysis, reports and the most relevant news in the COVID-19 context. White Papers are essential guides that contain recommendations and vital information for industries such as automotive, beer, finance, FMCG food and non-food, oil & gas, retail, and telecom. They also provide details about business and communication during this period, recommendations, and actionable ideas for this specific context.
“Secondly, most of the ongoing communication for our clients had to be adapted, campaigns lost their relevance and we had to find our new voice. We have seen so far a direct correlation between the health crisis peaks, the subsequent confinement measures, and the impact on the brands we work on,” added Stefan Iordache and Teddy Dumitrescu.
“They say that advertising lives in a bubble, but we at pastel have our own bubble inside the industry’s big one. We should seem covered and protected, right? But this time we weren’t, either. Working with clients from various sectors that have been affected in different ways also reflected on us. It has been a period that involves even more work, even if this isn’t necessarily reflected in revenues. We have had to adapt some campaigns overnight, let go of others entirely or build things from scratch. I’m happy that we adapted so quickly and efficiently to working from home. Still, I admit that I really wish we could get back to the office and resume work as we knew it. I don’t know when or how this return will happen, but what I do know is that I’ll put the safety and comfort of my colleagues first,” pastel’s representative added.
A look into the future
Looking ahead, Publicis Groupe CEO Arthur Sadoun said: “…we’re facing a crisis that is unparalleled in terms of its magnitude, its complexity and most probably its length.” Right now, the group is focusing on the same two things they’ve focused on since the beginning of this crisis: their people (keep them safe) and their clients (keep them close). “It is complicated to assess what will happen to the market both in the short and long term, as we do not know whether we have seen the worst of it. Traditionally, the advertising/marcomm business mirrors the overall economic trends. This will likely not change. Everything else will most probably do. We ask our clients for what we ask from ourselves: resilience – this will not be a one off; transparency – the more we understand the better the solution; data-driven approach – informed and data-based solutions are compulsory in these times; and trust – mutually beneficial, great collaborations are based on it & our teams know exactly what to do with it. We are facing unique times when we can develop together, experience new ways and open doors,” concluded the Publicis representatives.
In his turn, Marian Costache, the founder of Motion Vision Communication, believes that clients should wait, listen, and learn this lesson, because it’s unlike anything that has happened before. “Communicate, because it’s weird to suddenly become completely quiet, but do it in a smart way. In fact, rate cards are going down these days and this waiting will benefit you a lot. For 2020, I’m very curious if our clients will reactivate their campaigns, because most of them are in the retail sector. As this crisis isn’t mainly economic, I hope that in a year and a half we’ll be back on track,” said Costache.
“There are hundreds of reports, studies, analyses about what the communication market will look like, about the way brands will communicate, about how consumer behaviour will change, etc. These only show trends. Of course, we can relate to or rely on them, but I think we need to preserve our reactivity and adrenalin to the maximum amount in order to adapt to any change that may come. I believe that now, more than ever, we must actually learn from mistakes – whether ours or others’. According to the EY Global Risk Survey in 2020, 79 percent of board members in major companies involved in the study said they were not ready to face a crisis. And it’s not been long since the last one. So, let’s learn as much as we can from this period, so that we can be as prepared as possible for anything the future brings. And as far as communication goes, I hope that brands will get even closer to people,” concluded Dana Nae Popa.