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The Impact of COVID-19 on B2B

April 07, 2020
Kara Alcamo
Kara Alcamo
ROI'er
Kara Alcamo
Kara Alcamo
ROI'er
Russell Holm
Russell Holm
ROI'er
Russell Holm
Russell Holm
ROI'er

Many clients are asking us about the impact of the coronavirus or COVID-19 on advertising and what we are seeing. This blog focuses on key insights gleaned from our portfolio and broader industry research—and the emerging speed bumps and opportunities within the B2B landscape.

The good news? We have seen minimal portfolio-wide impact on advertising performance, and in some areas, we actually see improved performance.

And the bad news? Some channels, like out of home (OOH), will need to be reallocated as they are not effective in this environment.

Using these insights, we are proactively working with clients to help them determine their strategy for the next 3-6 months. We are monitoring and benchmarking performance to deliver data-based recommendations for each client, based on their unique situation.

So, how are other companies adjusting digital investments due to the novel coronavirus?

It varies across verticals and focus areas. Most clients are maintaining or increasing investments and are seeing better than average returns. However, some in harder-hit industries (e.g., retail/CPG) are pulling back on spend due to C-level or board mandates.

A few other highlights:

  • Many clients are transferring incremental funding from Field Events to upper-funnel awareness tactics and direct response to make up for the gap in leads from canceled events.
  • Many clients are pivoting to virtual events to replace in-person ones.
  • Fresh new content is key. We are seeing great performance on LinkedIn for virtual events, including in EMEA, but older whitepapers and assets are lagging. 
  • Clients that focus on full-funnel tactics, including awareness, are being more aggressive in the market as inventory costs have dropped due to divestment from large B2C spenders.

Here are some Common Questions and Answers:

Note: The following insights exclude China, which has seen drastic reductions in ad spend.

What impact are you seeing on Search/Audience volume and conversion rates from COVID-19?

It’s truly a mixed bag.

We saw a decline in search volume within the B2B technology space, but as of the week of March 23rd, it appears to be picking back up. Furthermore, CPCs are dropping while conversion rates have held steady, resulting in better than average CPLs. For other clients, conversion rates have dropped and CPLs have gone up. Because of this variance, we are assessing each client individually and making recommendations based on their first-party performance data rather than aggregated industry data.

Some content syndication partners are struggling to deliver in full, but social, SEM, and programmatic have picked up the slack.

One exception: remote working and teleworking queries, which have seen significant upticks. Per Google research, “in the past week alone, searches for “telecommuting” in the U.S. reached an all-time high on Google and YouTube, with no sign of slowing down.”

YouTube has also seen an increase in traffic, specifically within the following categories:

  • work from home essentials, including remote team collaboration 
  • study with me 
  • pantry meals
  • stress relief
  • in-home fitness

Although your business may not relate specifically to those topics, we are still able to leverage the increased inventory.

Is there an impact from COVID-19 on down-funnel metrics (SQL, Opportunities, Closed)?

Due to the long sales cycle of many of our clients, it’s too early to measure, but we are keeping an active communication line to get as much feedback as possible. Many sales teams are having trouble connecting with in-person meetings due to shelter-in-place mandates, and they are looking for support from digital to reach them virtually. In those instances, we recommend updating email nurture streams, exploring LinkedIn InMail, and leveraging ABM-targeting display to maintain some level of engagement.

What opportunities should we be looking into?

  • SEM: If your performance falls into the category of declining CPCs with a steady conversion rate, you may consider increasing investment in SEM to take advantage of better than average CPLs—even if overall search volume has fallen.
  • Virtual/Live Events: LinkedIn Live has come out of beta early and is now available. It doesn’t have the ability to register and capture leads but you can account for this by building a registration landing page.
  • Programmatic Display and YouTube: Digital media consumption has increased, resulting in an increase of available inventory. This can help get reach and frequency and replace OOH advertising which has taken a hit (more on that below).
  • News media publishers: People are checking the news more often, which means more potential eyeballs on news media sites.
  • Connected TV: More people are at home and watching TV versus going out. There is more inventory on Connected TV, making it more accessible from a budgetary standpoint than linear TV.
  • Social media: Twitter is a critical news channel. While we have not seen specific usage numbers, our assumption is that users will be more active as they look for updates in their feed and, therefore, there will be more inventory for advertising in-feed. For obvious reasons, we would not recommend advertising based on COVID-19 hashtags unless there is a specific use case. Similarly, Facebook/Instagram may offer larger than normal inventory at lower costs due to traditionally large spenders pulling back.
  • “Fire Sale” Inventory: Traditionally large spenders in hard-hit industries like hospitality are pulling their advertising spends, leaving unpurchased inventory which may be bought at a discount. This applies both to programmatic media and publisher direct, although publisher direct would apply primarily on broader reach sites like news media vs. niche industry players.

Outside of media channels, the biggest impact comes from having a strong message or business case. Running a stale ad during this time is more difficult than normal because we have to break through all the COVID-19 news. Wherever possible, we are recommending that clients revisit their creative and messaging and look for opportunities to tailor it to this environment. For example, one client has tweaked their creative to emphasize their products’ flexibility and use cases for remote workers.

What should we stay away from during this pandemic?

Out of home (OOH): Billboards, airport advertising, bus shelters, and wraps, etc. Across the board but especially in areas with shelter-in-place mandates, we are shifting investment from OOH. If you have existing contracts, we recommend that you seek to change the timeframe for the buy to later in the year and instead put that investment into digital.

Direct mail: If you are marketing to consumers, this would actually be a time to increase investment here. However, if you are marketing to businesses, we recommend avoiding direct mail as most workers will not be in the office to receive the mail.

Any parting thoughts?

A strong brand, defensible positioning, and an integrated, data-driven go-to-market strategy are the cornerstones of a successful company.  They require a focused effort, which can also make them challenging to get to under normal circumstances. This is a unique opportunity to leverage any downtime to develop and refine your key business deliverables.  

Additional questions? Curious about what we might recommend for you? Get in touch.

Additional resources and reading material for COVID-19:

https://searchengineland.com/reducing-digital-marketing-due-to-covid-19-read-this-first-331310

https://www.emarketer.com/content/how-coronavirus-affects-global-ad-spending

https://www.emarketer.com/content/covid-19-impact-b2b-events

https://www.emarketer.com/content/coronavirus-event-cancellation-b2b-marketers

https://www.emarketer.com/content/the-biggest-business-impacts-of-the-coronavirus-pandemic-according-to-business-insider-intelligence