How does the epidemic affect the advertising industry?

The impact of the epidemic on industries such as catering, hotels, tourism, and movies has been very obvious, but what about the advertising industry?

Very few advertisers think that the situation is not serious and has little impact; most advertisers believe that the impact of the epidemic on the advertising industry is not yet very obvious, but many projects are adjusting briefs, canceling delivery and delaying filming.

Yesterday, most advertising companies have started working online, and are using February 10 as a node to provide employees with multiple protective subsidy measures and actively prepare to resume work.

During this special period, we urgently launched a special observation and interviewed 7 heads of leading advertising companies in Beijing, Shanghai and Guangzhou, including Beijing (TOPic, Weihan Group), Shanghai (Sky and Sky, Youmen, F5, Not Just Advertising), and Guangzhou (Waiwai Creative), trying to find answers to some key questions for advertisers on the front line.

What impact will the epidemic have on advertising companies, advertisers, brands, and the trend of the advertising industry, and how to respond in extreme situations? We asked all of them for you.

In addition to the candid record of the difficulties faced, I also unexpectedly received a copy of Tianyukong's epidemic prevention guide and TOPiC's epidemic working principles for your reference.

Don't create anxiety and don't panic, but being calm in the face of things comes from being prepared. Consider this special observation as a preparation in the hope that you will never encounter these problems or need these suggestions. Now let’s start with the main content.

Responses from top advertising companies

Note: The responses are sorted alphabetically by company name and question.

Q1: What impact has the epidemic had on the company’s operations?

Ding Hezhen, founder of Not Only Advertising, said: The current impact is that it is inconvenient for everyone to go to work and they can only work from home. The future impact is as unpredictable as the epidemic itself.

F5 founder Fan Yaowei: Creative agencies are asset-light enterprises. We can say that there is no direct impact, but it seems acceptable at the moment. In addition, F5's business is concentrated in two areas: one is digital marketing, and the other is overseas promotion. The former team can complete it online, while the latter team can do it overseas. In the long run, it depends on the duration of the epidemic. If it drags down Party A, the agent will also have a hard time.

Yang Yexin, founder of Tianyukong: It won’t have much of an impact, especially for leading creative hot shops like us. We just need to be down-to-earth and use creativity to serve our customers without overthinking it.

Over the past six years, Tianyukong has actively explored marketing fields such as product innovation, strategic consulting, brand stories, event marketing, and social responsibility, and has accumulated a lot of experience and cases. We believe that we can help all types of companies provide different solutions based on different problems during the epidemic.

In the short term, some projects may have to be postponed, and the epidemic may also lead to the abortion of some projects, but it will also give rise to new project opportunities, such as health, environmentally friendly appliances, medicine, remote work, and public welfare and charity. From a long-term perspective, China's economic upward trend remains unchanged, Chinese brands need to step onto the international stage, and the Chinese consumer market will be further opened up. Therefore, there is still huge room for development in China's advertising and marketing industry.

At the same time, I expect that there will be a consumption peak after the epidemic. After all, consumers have been suppressed for so long during this long holiday and need a certain outburst.

Li Xue, founder of TOPic: The current impact is not very large. Since we have hotel brand and e-commerce brand businesses, we predict that these two businesses will have different degrees of adjustments, but the specific next step depends on the adjustment of the brand's business plan.

Li Ji, Managing Director of Weihan Group: Business will definitely slow down or even partially stop in February and March, projects will be cancelled or postponed, and the company's revenue will most likely be affected.

Ren Xuanning, co-founder of Youmen: At present, the main impact is that the time to return to work has been delayed. Other impacts are difficult to react in a short period of time, and we will have to look at the data later.

In addition, Zheng Daming, founder of Creative, said: Mainly, the official working hours need to be postponed for 10 days, and all work plans need to be rearranged. Colleagues in the company have spontaneously started working online, holding online meetings, issuing briefs, discussing strategies, ideas, and communication plans, and advancing various tasks. In-depth discussions and exchanges may not necessarily be achieved through online work. But the impact is not significant at the moment.

Q2: Normal communication plans have been disrupted. How much impact has this had on cooperation with customers? What adjustments have been made?

F5 founder Fan Yaowei: Some projects were originally planned to be promoted at the end of February, involving offline activities and video production. Customers are still discussing internally how to respond. As far as I know, activities that require gathering of crowds are not allowed at present, and domestic film and television production has been stopped by official documents. I think there are two ways. One is to wait until the epidemic is over if conditions permit, and the other is to change the original offline activities to online ones. You can learn from the operation of "Lost in Russia".

Li Xue, founder of TOPic: Specifically, about 25% of the projects were affected and adjusted, which can be roughly divided into three situations:

The first is the cancellation pending situation. The original plan to do social media advertising during the Spring Festival was cancelled and entered the Pending status.

The second is the postponement of the shooting. The celebrity endorsement shooting originally planned for mid-February has been postponed and will be notified separately.

The third is the re-briefing situation. Because the original brief requirements are not in line with the current social public opinion, the brand will revise the brief direction and then develop a new plan.

Li Ji, Managing Director of Wei Han Group: It is not very clear at the moment, but the planned communication campaigns and activities will definitely be postponed. It is not known how long the postponement will be, and it is also very likely to be cancelled.

Ren Xuanning, co-founder of Youmen: The monthly fee projects have little impact, and the projects launched in March and April are also progressing normally. Our own production capacity has not been greatly affected in the short term. It is possible that the timing of customer campaign type promotions will be postponed and the scale will be reduced in the next few months. The specific impact remains to be seen.

Zheng Daming, founder of Beyond Creative: It is mainly due to the changes in the communication environment that all plans passed years ago may need to be reconsidered. This will generate a lot of new workload. For shock wave marketing, the difficulty and workload of each plan are relatively high.

Not only the advertising founder Ding Hezhen: the cooperation with customers was also affected. They had to cancel face-to-face meetings and switch to all online communication. Clients have also reduced their broadcast plans and adjusted their plans depending on the development of the epidemic.

Q3: How long will the epidemic last before the company faces extreme situations? What kind of chain reaction will it have on employee retention, benefits, wages, customer cooperation, etc.?

Li Xue, founder of TOPic: TOPic's operations are relatively stable and its cash flow is also healthy, which is sufficient to support us through this extraordinary period. All decisions made at the company level are based on the principle of protecting employee interests first and taking good care of every employee.

Li Ji, Managing Director of Weihan Group: It depends on the company’s financial and cash flow situation. It is estimated that if the epidemic continues for another three months, many companies will not be able to survive financially.

Ren Xuanning, co-founder of Youmen: It should be said that only if the epidemic continues to worsen will it have an irreversible impact on the company, and probably on the entire industry as well. It is difficult to judge the chain reaction at present. All parties should support each other and overcome the difficulties together.

Zheng Daming, founder of Waiwai Creative: Waiwai Creative has always been relatively prudent in its operations, focusing on customer quality and cash flow, and on creating value for customers. The company's scale is also very lean, so its ability to resist risks is relatively strong.

On the surface, advertising companies need to strengthen cash flow management. In fact, the fundamental ability to resist risks still lies in what value the existence of a certain advertising company brings to customers? This is basic business logic. If an advertising company can help sales. I think adhering to this basic logic and possessing this fundamental ability are the cornerstones of resisting risks.

We are currently responding actively based on the assumption that the epidemic will end in July.

In addition to creativity, we will continue to look for outstanding talents in various fields to strengthen the team. To be honest, the epidemic will definitely pass. I am not too worried about it. This is just a short-term fluctuation. What I always worry about is whether the external creative team is strong enough and whether it can really help customers and solve their problems.

I have always felt that, relative to this era, relative to the problems that our customers need us to solve, and relative to the destination we want to go, our creative team capabilities need to be comprehensively strengthened. Therefore, in addition to creativity, we are eager to have more outstanding partners and talents join us.

Ding Hezhen, founder of Not Only Advertising, said: It is still relatively stable at present, but I dare not imagine how long the epidemic will last and the company will face extreme situations. Big companies like Xibei say they can only last three months, and the situation for small and medium-sized advertising companies is not optimistic. Because rent, wages, and insurance are all hard costs, they must be paid for every day they exist.

F5 founder Fan Yaowei: Since F5's business is concentrated in digital marketing and overseas markets, it will not be greatly impacted in the short term. Our cash flow can sustain us for a long time. But in the long run, if the domestic market is severely impacted, it will affect customers' marketing plans. Their budgets will surely be reduced or even cut outright.

How to achieve big things with little money is a topic for agents in 2020. The cost is low, creativity is more important, and this is also a good opportunity to produce works. We encourage Party A to adopt new marketing methods, such as digital experience marketing, public relations events, product innovation, etc.

This question is actually very sharp, but thinking of the crisis that Xibei’s boss had to endure for three months a few days ago, Gui Gui still specifically asked a question: If the company’s revenue fluctuates due to the epidemic, will the employees’ wages be adjusted accordingly? All responsible persons responded readily that employees’ salaries would not be adjusted due to the epidemic, but some also said that performance bonuses would be affected or that the last-in-first-out system would be initiated.

Q4: During the epidemic, what should brands do to avoid chaos and mistakes?

Li Ji, Managing Director of Weihan Group: The epidemic has affected almost all industries, especially the retail, catering and tourism industries. Brands should now start formulating response strategies for their 2020 marketing plans and make plans based on the possibility that the epidemic will continue in the short, medium or long term.

Zheng Daming, founder of Beyond Creative: Sincerity. friendly. Persist in having positive intentions.

Ding Hezhen, founder of Not Only Advertising, said: Brands should just go with the flow and never try to be clever.

F5 founder Fan Yaowei: Don’t take advantage of the epidemic. When doing charity, just focus on doing charity and don’t think about taking the opportunity to hype it up. The onlookers have sharp eyes. The whole country is fighting the epidemic, human lives are at stake. We should have less pranks, less depression, more sincerity and more positive energy.

Li Xue, founder of TOPic: Regardless of whether there is this epidemic or not, an important trend last year is that more and more brands began to link their brand value and social responsibility more closely together, whether it is Kuaishou and Tencent in the Internet category or Procter & Gamble in the traditional industry. This epidemic will make brands pay more attention to social responsibility and closely combine their brand value propositions, product function development and shaping of a better Chinese society.

In the past few years, some of the short-term, quick, sensational hot marketing that has emerged due to e-commerce and seeks to increase fans and sales in the short term will be restrained. Because there is only one hot topic in 2020: the China we live in becomes better.

Q5: What advice do you have for advertisers who are unemployed at home due to the epidemic?

Ding Hezhen, founder of Not Only Advertising: It’s time to give yourself a chance to think carefully and think deeply about your career, profession and industry. By the way, spend time with the people around you.

F5 founder Fan Yaowei: Advertisers should always be on the road of seeking knowledge and always maintain information asymmetry with clients in order to gain their respect. Spend more time learning new skills and expanding your knowledge base. Due to the impact on the economy, competition in the job market will be more intense this year, so be well prepared to face the challenge.

Li Xue, founder of TOPic: If this epidemic accelerates the upgrading of the advertising industry, then the same is true for advertisers. Advertisers who have the ability to carry out a complete project from planning to implementation are the ones who are hired by all advertising companies at high salaries. Advertising agencies can no longer accommodate screw-type personnel.

This is also the change we have been going through from “Creative” to “Creator”. This requirement has always existed, but it has become more obvious after this epidemic.

In addition, one aspect that advertisers need to focus on strengthening is the ability to understand the macro aspects of society, economy and business. If the keyword for business in 2019 was “growth,” the keyword for business in 2020 is “survival.” It is hard to imagine that an advertiser who does not understand the world situation and business can have any meaningful communication with clients.

Li Ji, Managing Director of Weihan Group: First of all, health is the top priority and we should pay attention to protection; secondly, we should maintain a good attitude and learn to coexist with the epidemic and restricted movement without being anxious or impatient; thirdly, we should get used to working from home and communicating online, and not let our mobility be affected too much.

Q6: What changes will the advertising industry experience in 2020 due to the epidemic?

F5 founder Fan Yaowei: What F5 is currently thinking about is not its own survival, but how to help our customers survive in the uncertain epidemic. We let our clients know that no matter how big the challenge is, we will always stand behind them. Creating value for the client beyond service fees is the way to survive in our industry. Let’s work together for a better 2020!

TOPic founder Li Xue: We are not yet in a position to make very comprehensive estimates. There are already many predictions about the economy. As a barometer of the economy, the advertising industry is bound to be closely aligned with economic development trends.

In general, the question above is in the same direction as the question about brand. Integrated creative companies with strong brand building and content creation capabilities will be more favored, but they must strengthen their content execution capabilities and even be able to produce their own ideas. Companies operating social media must strengthen their ability to maintain and build brands and not rely on hot topics and KOLs. E-commerce creative service companies must break away from the routine of e-commerce promotion, reduce reliance on labor costs, strengthen cooperation with new technologies, and adapt to the changing lifestyles of consumers.

From a positive perspective, for the advertising industry, it is both a process of eliminating the weak and retaining the strong, and an opportunity for upgrading and replacement.

Li Ji, Managing Director of Weihan Group: The epidemic may create some opportunities, such as new demands in health-related industries. In addition, the impact of the epidemic on physical retail stores will stimulate the further development of e-commerce. But these opportunities are far less than the impact on the overall industry. Due to the unprecedented epidemic in 2020, the economic situation will further deteriorate, the advertising industry will become more difficult, and the profit margins will be further reduced. Advertising agencies should prepare for winter, and a colder winter at that.

Ren Xuanning, co-founder of Youmen: It’s hard to predict, but I will share some expectations: I hope that good talents will return to the company for stability; I hope that the brand will accumulate strength and sell well after the epidemic.

Zheng Daming, founder of In addition, said: It is impossible to predict now. Don't panic too much, this is just a short-term fluctuation. As long as we can truly solve problems for our customers and create value, we can weather all kinds of storms and keep moving forward.

Ding Hezhen, founder of Not Only Advertising, said: Although January and February of 2020 are probably going to be wasted, the joke on the Internet is right: Aren’t all big things accomplished in the second half of the year? At this time, confidence is gold.

I don’t know what changes will happen to the advertising industry, but what is certain is that there will be significant changes.

Ten Measures for Epidemic Prevention in the Sky and Air

Yang Yexin, founder of Sky and Space, gave us his observations and views on the advertising industry during the epidemic. At the same time, we were sent the Tianyukong Advertising Company Epidemic Prevention Guidelines for the First Half of 2020. The ten points are as follows for your reference:

1. Increase revenue and reduce expenditure, and prepare sufficient cash flow;

2. Provide more training to employees to improve the company's combat effectiveness;

3. Cherish every creative opportunity and strive to do your best;

4. Clarify the company's core competitiveness, sort out representative cases and company introductions;

5. Create exclusive marketing tools, strategic tools, creative tools, and form methodology;

6. Enhance the effectiveness of creativity, analyze consumption trends, and help companies increase sales;

7. Use limited marketing budget as much as possible to achieve maximum business results;

8. Take the initiative to dig for treasures. Special periods often hide special market opportunities.

9. Take some social responsibilities for the industry and society and export your own brand;

10. Insist on creativity and do not compromise it, and creativity will not lose its value.

TOPic's working principles during the epidemic period

TOPic's internal letter to employees provides a detailed template for advertising professionals to ensure the health of their employees when working from home or returning to work. It is also for your reference:

Excerpts from TOPic internal letter

Thanks to the heads of advertising companies such as Not Only Advertising, F5, Sky and Sky, TOPict, Wei Han Group, Youmen, and Waiwai Creative for accepting the interview. I hope this special observation will give you some inspiration.

Author: Gui Gui VS Advertising Company Manager

Source: Advertising Common Sense (ID: adernous)