Oliver McAteer
Feb 05, 2020

Coronavirus fears halt global agency meetings, impact brand sales

Brands are bracing for a dent in sales as stores in China close and malls are deserted.

Most holding companies have implemented some form of travel restriction to China.
Most holding companies have implemented some form of travel restriction to China.

Advertising agencies are calling off global meetings in Manhattan and other US cities amid the coronavirus epidemic.

Around 75 leaders from OMD's APAC, EMEA, LATAM and NA regions as well as several clients and platform partners were due to meet in New York for a summit today and tomorrow. The two-day event, which had been in the works for months, was cancelled last week citing health concerns. 

An internal memo sent to OMD leadership read in part: "We are fully confident that health organisations and governments working hand-in-hand will be successful in containing the virus soon.

"That said, there undeniably is a sense of increased concern when gathering a group of 75 of our senior executives from around the planet in the midst of a health crisis of global proportion.

"As frustrating as it might be for all of us to not meet, celebrate some of our recent successes, but most importantly double down on the strategies and tactics that will keep us on our growth trajectory, our unconditional priority will always be your safety and wellbeing."

OMD is asking local Chinese employees to work from home through till at least Feb 9. It has set up a central crisis management team in charge of internal communications and action plans, taking into account new information from the Chinese central and local governments.

In a bid to avoid mass disruption to clients’ current marketing strategies, OMD has deployed and activated business continuity plans that allow teams to uphold and adapt ongoing client campaign activities, heavily influenced by the circumstances.

Most other holding companies have implemented some form of travel restriction to China.

IPG is adhering to Chinese government guidelines which have requested a work-from-home period of 14 days. The same is suggested for those returning from China to the US.

An internal memo to global IPG staff explained that "after consulting with our medical advisors and closely monitoring the travel advisories from the US Center for Disease Control, the U.S. Department of State and other public authorities, we’ve decided to impose a company-wide travel restriction to China and Hong Kong due to the Coronavirus health situation." 

This restriction applies to "all non-essential business travel" until the situation improves.

The note adds: "We do also realise some travel may be necessary so the current restriction does allow for some business-critical travel in certain case-by-case situations. If there’s a critical business reason to travel, the traveling party must provide written justification along with management approval to IPG’s Risk office prior to ticketing."

Dentsu and WPP too are avoiding "non-essential" travel to China, with the latter closing offices as an extension of the Lunar New Year holiday, in line with local government recommendations.

Michael Duda, managing partner at independent Bullish, said: "When a client’s business sneezes, an Agency can catch a cold. This a deadly threat to humans (far most important) could shut down production that impacts mom-and-pop companies in the States and with it, the marketing programs."

Meanwhile, brands are bracing for a dent in sales. Starbucks, Apple and Ikea are among the chains which have closed stores in China, reports The New York Times. A question mark hangs over the impact this virus will have on retail companies and fast-food restaurants as shopping malls stand deserted. 

Automotive brands including General Motors and Toyota have halted production as they wait for workers to return from the extended holiday. And travel has been thrown into chaos as Delta, American Airlines and United Airlines lower the axe on flights to China. 

Currently, 427 people have died after contracting the virus. There are believed to be at least 20,000 confirmed cases around the world. Most of them are in China, but cases have been reported in 26 other countries.

(This article first appeared on CampaignLive.com)

Source:
Campaign India

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