The devastation of the coronavirus outbreak that originated in China continues to unfold. As of now, there have been over 1,100 reported deaths (mainly in China) because of the virus. Travel and business have ground to a halt in parts of Asia, but the good news is that the reported rate of infections is beginning to fall.
The advertising and marketing communities have been affected as well. This year’s Mobile World Congress in Barcelona was canceled, and other event organizers are considering next steps as the full scale of the virus’ impact is assessed.
Agencies based in or with offices in China have seen the effects of the outbreak greatly affect operations.
Drop in activity
In IPG’s latest earnings call, CEO Michael Roth noted that most of the holding company’s 2,500 employees in China are working from home. And while its operations in the country account for about 2% of revenue, there is concern about what could happen in the future.
“What remains to be seen is what impact this will have on our suppliers, and what impact that would have on U.S. companies and other global companies,” Roth said.
According to Hylink managing partner Humphrey Ho, the China-based agency has seen a massive drop in activity as clients wait out the storm.
“[Everyone] is on full stop and has a wait and see attitude,” Ho said. “I can’t think of a business in marketing, advertising and communications that aren’t affected right now, both in China and abroad.”
Ho noted that advertising, especially in digital, has come to an almost complete stop. He estimates that 80% of digital advertising has either been replaced with messaging from the Chinese government or words of support elsewhere. In some cases, there are simply no ads on some of China’s most popular platforms like Weibo or news and video apps.
Agencies like Hylink have a great deal of domestic work to carry out in a highly complex market, as well as work that targets travelers, spanning foreign and domestic brands. Hylink has a number of tourism clients and, per Ho, so far total inbound travel to Japan is down by a third (China accounts for 40% of travel to the country), Korea has lost 60% of tourism traffic, and Singapore is lagging by 25%.
“The rest of the world doesn’t want to travel to a place with ‘coronavirus’ labeled on it,” Ho said.
After operations in Wuhan and Hubei were shut down, Hylink enacted a work-from-home policy with a 14-day self-quarantine of all employees. The agency’s Shanghai office has reopened but is running with about a quarter of the usual staff, rotating people in and out. In Guangzhou, which is in the southern part of the country and closer to Wuhan, some of Hylink’s staff are still effectively working from home with a skeleton staff going to the office.
For its part, Wieden+Kennedy’s Shanghai office has enacted similar measures, with staff working from home. The agency is currently closed but set to reopen on Monday.
According to an agency spokesperson, the office will hand out printed antivirus information sheets as well as masks, filters and protective covering for clothes and shoes. Additionally, there will be ample disinfecting supplies, with a daily plan to outline best practices for avoiding infection. Because of the virulent nature of coronavirus, HVAC will not be used to prevent recirculated air, and staff will be encouraged not to congregate.
In a heartening development for W+K, offices from around the network have been sending video messages in a show of unity, designed to boost morale.
Part of the issue slowing things down for agencies, as well, is the work culture in general. While working from home is a more common practice in the U.S., it is still largely a foreign concept in China.
“In China, we like to gather and work as a collective,” Ho explained. “Many times, people camp out in meeting rooms to work with a client for the whole day, and now they don’t have that.”
Another issue is that the internet structure in China is not as vast as other countries, nor is it consistent in terms of speed.
“Some of our staff don’t have the internet at home,” Ho said. “Or they’re stuck at their grandmother’s house because that’s where work from home is for them, and grandma doesn’t have internet.”