Covid-19. What will the digital industry face in 2020?

Amid the health emergency and mandatory quarantine, the economy has become the second most major concern. What are the consequences of the coronavirus on business?

The current state of affairs generated by COVID-19 has direct consequences on people’s lifestyles. It isn’t only about health risks; routines are changing, purchasing modalities are altered, and even the hours dedicated to consume digital content have been affected. The impact is so big, that some studies estimate 8 out of 10 people have already drastically changed their habits.

In this context, the market is seeing how the pandemic has affected the natural flow of businesses, and among them, the advertising industry is showing its own reaction. “The coronavirus generated a macroeconomic irruption of all markets and, within this situation, we also see particular movements in the advertising universe“, explains Hernán Arzoumanian, CEO of E-PLANNING. “Today, for example, we notice extreme stillness in the campaigns of brands dedicated to tourism, sports or commodities. We are facing a scenario where many agencies and advertisers are seeking to preserve investment and decide to wait to see what will happen after April 15 or 30 ”.

Uncertainty prevails because today nobody has the capacity to project how long the economic crisis generated by COVID-19 will last. There are specialists who speak about two years and others who consider that the reactivation of the economy will take place from July”- Hernán Arzoumanian, CEO of E-PLANNING

Just as some markets are suffering a great negative impact, there are also others that have widely benefited, such as pharmaceutical companies or hygiene product companies. Similarly, on-demand content providers (for example, Netflix shares rose more than 0.8% on Wall Street), digital carts, and home delivery or courier companies are thriving. Downloading shopping and delivery apps has grown 200%, and according to a report published by Techcrunch, the Walmart Grocery app was downloaded about 54,000 times in the same day. Alongside these success stories is another great player, the communication technology industry. “I think one of the best cases is ZOOM, an application that allows you to organize massive meetings through video calls. Ten days ago, its development had no weight within the industry and almost no one knew it. Today -thanks to the growth of downloads and their intensive use- we are facing a company that is worth 30 billion dollars”, declares Arzoumanian.

Impact, projections and consequences

  • Google and Facebook are likely to take an additional economic hit due to lower advertising spend by other industries, which have been affected by changes in consumer behavior. The combination of this with the reduction in tourism could represent a drop of 30-45% of Facebook’s general advertising revenue.
  • It is estimated that once the coronavirus is passed, it will take at least nine months for people to get back to the idea of ​​traveling abroad with non-refundable packages.
  • Following the consumption reports from Italy and China, the trend is clear: today people prioritize isolation and social distance, and prefer to shop digitally. The growth of this habit is notable and has resulted in market increases of 51% in China and 31% in Italy. But there is also a fear of shortages and that consumers are making larger purchases than usual. For example, in England, an average family is believed to be spending £467 more than their usual budget.

“We are facing a very complex moment since it is not only an issue of investment, but companies are being forced to reformulate their strategies, their budgets, their approaches and their products.” – Hernán Arzoumanian, CEO of E-PLANNING

  • In terms of creative content, there was also an interesting change. Pattern89 analyzed more than 1,100 active brands and advertisers on Facebook and Instagram and found that there are 27.4% fewer image and video ads that show human interactions like hugging or shaking hands.
  • Leisure time has also been transformed and people are spending much more time in the digital ecosystem. It is estimated that 50% of users increased their consumption of streaming services, 45% are spending more time consuming and generating content on social networks, and the activity of messaging applications grew 50% in the past month.

What is the scenario in Argentina?

“For some months now, in Argentina, there has been a drop in investments caused by the fluctuation in the value of the dollar; an intrinsic situation within our economy. However, we believe that, with the coronavirus, there will be similar behavior to what happened after the 2019 elections: when there was a clear picture of what was going to happen, the markets surged again and Q4 results were very good ”, says Arzoumanian. “I think that, with the pandemic, the situation will be similar and we are now at a time where it is necessary to stop, observe, analyze and reformulate ”.

“It is clear that Q2 is going to be very difficult, but as the situation resolves, the quarantine begins to lift and people resume their normal routines, we will also see a resurgence. Leading to, if everything goes well, a very good Q4. ” – Hernán Arzoumanian, CEO of E-PLANNING

E-PLANNING’s role in this situation

In addition to promoting the importance of the mandatory quarantine among its employees and prioritizing healthcare, E-PLANNING is actively working to stand with its clients during the pandemic. “We understand that publishers need us to work closely with them in order to create as much revenue as possible,” says Arzoumanian.

“E-PLANNING is working hard on optimizing our accounts with the aim of generating more revenue for our publishers” – Hernán Arzoumanian, CEO of E-PLANNING

With that goal in mind, the company has accelerated an integration project – which was planned to be carried out during Q2 and Q3 – with the goal of continuing to add new sources of demand. “For us, being closeby is essential: To be able to support publishers and work to offer new solutions that collaborate with mitigating the impact of the pandemic”, stresses Arzoumanian.