Brands Pivot On Marketing Efforts Amid Coronavirus Cancellations

    • Marketers may choose to remain quiet and absorb losses as COVID-19 response intensifies.
    • Impact of billions of dollars in media, sponsorship, and fan activation investments remain up in the air.

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A global outbreak of Coronavirus has brought much uncertainty to the sports world, and by association the brands that use marquee events to build a rapport with fans.

The consensus is the financial impact of COVID-19 will not be known until a future date, but losses due to leagues’ postponement and cancellation of events are already in the billions of dollars – between media rights deals, brand sponsorships, ad buys, and planned on-site activations.

FOS REPORT: 54.5% of industry executives believe that it would be at least 60 days before leagues resume play.

Marketers are now expected to mobilize contingency plans that rely heavily on digital and social media channels to target consumers where applicable. Some may choose to remain quiet altogether and take any financial hits.

“I think there’s going to be some understanding that now may be the right time to support your neighbor and make sure the world is sort of steady back on its feet before putting a whole lot of brand messages out there,” Tyson Webber, president of experiential marketing firm GMR Marketing, said.

There has been no shortage of sporting schedule changes or cancellations due to Coronavirus. But until this week, events have been smaller in scale, Webber said. 

The NCAA announced Wednesday that this year’s men’s and women’s DI basketball tournaments would be played with only essential staff and family in attendance. The NBA also became the first professional sports league to suspend regular season games. The NHL, MLB, and MLS all followed suit on March 12. 

Coronavirus’ impact has also been felt across global esports competitions and in international soccer leagues, with UEFA – Europe’s official governing body – said to be considering the cancellation of both the Champions League and Europa League, SkySports reports.

“I think you’re starting to see that tide turning a little bit when we talk about the NCAA potentially holding its tournament without fans and the NBA suspending its season,” Webber said. “This is evolving so quickly that it’s going to be hard to understand the impact of it until some time. In consulting conversations with our clients, they all feel that what is happening is right in the face of what the country and the world is going through.”

READ MORE: NCAA Faces New Challenges Following Decision to Hold March Madness Without Fans

Most media sponsors have already sent checks to TV Networks in advance of sporting events impacted by Coronavirus, Webber said. However, almost all of these contracts have majeure clauses built in that allow terms of a contract to be renegotiated in the case of unforeseen circumstances.

Chances are that not all of marketers’ experiential and ad buying funding has been used. Brands can now choose to either pivot by shifting dollars to network offerings outside of sports or by using capital at a later time. Built activations for the NBA playoffs, as an example, will be kept in storage. 

“Our clients are not cutting as much as tapping the breaks, postponing, and regrouping,” Chris Weil, CEO  of Momentum Worldwide, said. “We’re asking if things are going on without an audience, is there a digital play that we can do that still brings people together?”

READ MORE: NHL Suspends Season Due to Coronavirus

Brands fully expect more cancellations across sports, music, and entertainment to be announced over the next week due to Coronavirus, Weil said. 

Many of Momentum’s clients have also put a halt to on-site fan pop-up events. Some are additionally asking the agency to analyze exposure fees paid to teams and leagues for in-stadium signage. With no fans onsite, rebates or future credits may be issued. 

“We’ve been dealing with this [Coronavirus] since the Chinese New Year,” Weil said. “So we’ve been coping with this in our Asia and European operations as things have gotten worse. But now that it’s on our front page, everybody in the U.S. is at that stage that we were four or five weeks ago.”

Momentum will direct its U.S. employees to work from home beginning on Friday. Some of its employees in Asia and Europe are still remote.