COVID-19. The very name, shrouded in mystery, makes us panic a little. Born in China and initially met with lukewarm attention, it quickly put the world on emergency mode. For a month now, we've been overwhelmed by news about the virus's spread and all its consequences.
Verseo was also affected by the anxiety. It's natural that when a company has to close its stores, points of sale, hotels, or restaurants, it also suspends or limits its advertising activities. And that's just us. Fortunately, many of the businesses we run operate entirely or partially online, and these are generally holding up very well.
Because we've always shared data, and being one of the largest SEM agencies in the region obliges us to be accountable, we analyzed all our campaigns. Below, you'll find both general and industry-specific conclusions.
Coronavirus and trade
March 11th was a key moment for e-commerce recently, when the decision to close schools was announced. It was then that Poles flocked to stores and began to become more aware of the impact the virus would have on our daily lives. These two facts were reflected in lower online traffic.
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The consequences of the decision to close schools were devastating for e-commerce for the first five days. The total conversion rate (i.e., purchases) dropped by approximately 20% across all Verseo campaigns . This was very bad news. Fortunately, as the infographic shows, after a week-long slump, everything returned to normal.
Yes, we're buying relatively less, but we're still doing it willingly. In the final days of the period under review, it's clear that we've returned to the internet, returning to the norms of February and, for example, January. This brings a sense of sobriety back to both consumers and advertisers. The enforced quarantine also made us more willing to visit online stores.
Who does it hurt the most?
We compared the results of our campaigns from the last week of February with those from the first week of school closures.
B2C and online stores are clearly holding their own. Growth in some industries is offsetting declines in the restaurant and hospitality sectors. We'll discuss each industry in detail below.
B2B and services, on the other hand, will have a lot to catch up on once the dust settles. Looking at the infographic, you'll surely notice that we're seeing a significant increase in clicks in services. How is this possible when services are currently at a standstill? This massive increase was influenced by online currency exchanges, whose campaigns we're running – it turns out we flocked to buy currencies, and no wonder. Their prices skyrocketed, so many people wanted to get even lower rates.
This somewhat distorts the results – if we cut them out from the summary, it would turn out that clicks in services dropped by 10% and campaign costs (i.e. advertising expenses) by as much as 30%.
As you can see, advertising spending (cost column) has declined across all industries , meaning that, like consumers, advertisers have begun to spend less, fearing the future and under pressure from information. Unfortunately, these decisions were often based on emotion, not rationale. A significant number of businesses continue to sell the same or more. In times like these, budget cuts are a mistake. Each case should be considered individually.
There's hope, however. The week chosen for analysis was the worst time for any comparisons to previous months. Now we see that the situation has stabilized, as the first graphic with the total number of conversions demonstrates. While the quarantine is still in effect, it's difficult to expect a return, but we're quickly adapting to the new conditions.
Overall, we can say that COLLECTIVELY, our clients are selling 20% fewer goods and services compared to February. Of course, this is a statistical estimate. There are industries that have seen a 100% decline, as well as those that have seen a 30% increase.
The virus and trade in individual industries.
It's time to take a closer look at individual e-commerce sectors. All percentages below compare the period March 16-22 to the week of February 22-28. In total, we've managed over a thousand campaigns across various industries.
architecture
In construction, we saw a 6% increase in advertising spend and a 12% increase in clicks. There were also significantly more conversions—e.g., purchases—but of lower value. Therefore, we were buying more small items.
Home / Garden
Similar to construction, the home and garden sector also saw growth. Conversion totals increased by 30%, and conversion value also increased by 15%. Here, we both bought more and spent more.
Children / Parenting
In the parenting industry, our advertisers spent a staggering 36% less on advertising, while seeing a 10% increase in conversions and a 42% increase in conversion value. This means that this industry spent less on advertising and earned more.
Finance / Insurance
Growth is clearly visible in this industry, partly due to the situation mentioned earlier in this article – the purchase of foreign currencies. It appears that the virus has also influenced the willingness to purchase life insurance, as well as credit and loan agreements – at least in the short term. This industry invested a whopping 137% more in advertising and saw a similar increase in conversions.
Gastronomy
30% fewer clicks, over 60% lower conversion rate. Needless to say, the food service industry, which is currently struggling to transition online, looks like it's been bombarded. The sooner these businesses migrate online, the better for them.
Games / Applications
We saw impressive growth in games and apps. Clicks doubled and conversions nearly tripled compared to the same period in February. It's no surprise – you have to do something at home.
Hotels
No comment. This industry in Ads has temporarily ceased to exist.
Electronics
The significant drop in traffic and clicks, almost 20%, did not affect the cumulative conversion rate, which increased by 16%. Therefore, the crisis is not yet being felt strongly in this industry.
Books
A very large drop in traffic, a slight drop in clicks and an overall reduction in purchase value by 20%.
Fashion / Clothes
22% more conversions and 29% higher conversion value. We bought more clothes and didn't skimp on it. At the same time, the industry spent 12% less on advertising, meaning not only did we earn more, but we also saved money.
Automotive
40% fewer conversions and 20% lower conversion value. Moto was hit hard.
Real Estate
Traffic and clicks in the industry haven't dropped dramatically, by about 10% to 20%, but conversions have plummeted by 45%, and their value has plummeted by 66%. Well, the opportunity to invest in real estate diminishes when the future is uncertain.
Travel / Transportation
Due to the suspension of tourist traffic, everything has dropped by 60-70%.
Work / Education
The massive increase in views suggests that we've begun to think about self-development and job prospects at home. However, this hasn't translated into a significant increase in conversions in this area. On the contrary, we've seen a 44% drop.
Legal
80% increase in traffic and 40% more clicks.
Industry
The industry is fighting back beautifully, with conversions increasing by over 70%.
Agriculture
No surprises, sharply up. 🙂 More traffic, more clicks, and an increase in conversions and their value by over 150%.
Electronics / Household appliances
Conversion value dropped by 20-30%. We probably postponed more expensive purchases.
Sports / Recreation
But we decided to stretch our legs instead. 🙂 We spent significantly more money than usual on sports and recreation. 168% more, to be exact!
Arts / Entertainment
Conversions decreased by 20%, but the value of the remaining conversions increased by 20%.
Technology / IT
A 40-50% drop in most indicators.
Telecommunications / Internet
Chances are, those who didn't have internet in our country already do. 🙂 But seriously, everything is up. A 64% increase in conversions and a 107% increase in their value.
Beauty
Declines in each indicator by approximately 30%
Business services
It's similar here to beauty. Companies have begun to cut corners, and subcontractors are often the first victims. Conversion rates have dropped by 40 percent.
Health / Medicine
For this category, we received similar data as for business services.
Animals
Dogs and cats are family members, so we stocked up on supplies for them, too. Conversions increased by 50% and conversion value by 20%.
Phew, we've made it to the end. So the question remains: what's the takeaway from all this?
First of all, things are different. Some industries are booming, others are struggling. If you run online advertising campaigns , this is definitely a good time to talk to specialists and ask for recommendations on further action. Whether you're working with an agency or a freelancer, you need to keep a close eye on your campaigns right now, because the situation is changing daily. You could miss a moment when there was a chance to earn money, or you could miss a situation when there was an opportunity to save your advertising budget. Therefore, the current situation requires in-depth attention. However, it's definitely not worth panicking, as emotions are a bad advisor.
Please remember that all the data presented above refers to the worst week of March. The situation has stabilized now, but we won't make any predictions about what will happen next. We'll give a damn to anyone who predicts the situation in April or May. 🙂 However, we will keep you updated – especially on our fanpage on Facebook. : )
Summary
The above article covers the following topics:
- the process of adapting consumers and advertisers to the new market situation,
- comparison of campaign results from the end of February and the first week after school closure,
- e-commerce shopping trends in the first weeks of the pandemic,
- how lifestyle changes (working from home, quarantine) have translated into demand in product categories.
