Markkinointi & Mainonta March 24th 2020:
Avaus CEO Emma Storbacka: “Stockholm has quietened down, but not completely” – Avaus expects only a slight dip after Coronavirus
Storbacka estimates that about 25 % of all those working in the marketing industry in Finland will be made redundant over the next year.
In Sweden, the state has imposed fewer restrictions on Covid-19 than in Finland, although currently there are more hospitalised and deceased in Sweden. Gatherings of more than 500 people are prohibited in Sweden, although smaller gatherings are still allowed, and people are only advised generally to avoid contact. The terrace season of restaurants was advanced, so that outdoor food service would be possible.
Emma Storbacka, Managing Director of Avaus, a leading marketing analytics and technology firm with offices in Stockholm, says that Avaus has been working remotely since last Monday, and that most of the customers also work from their homes. In Sweden, schools have not yet been closed. “Of course, it makes it easier for people to work, but because you have to stay home if you show the slightest symptoms, in practice the effect is almost the same. Most of our employees have children at home,” Storbacka says. According to her, a lot of Stockholm residents are seen outdoors, in parks for example. People also visit restaurants, albeit at a distance. She says Stockholm has quietened down, but not completely. The attitude of the locals is that each one does his or her share, as requested by the authorities.
“Nobody knows exactly what the right way is,” she says of the different policies in Finland and Sweden. Storbacka estimates that the Swedish economy will emerge from the crisis faster than Finland. “This is not based on anything other than the fact that the Swedish economy is in better shape than Finland,” says Storbacka.
In anticipation, demand will increase after a slight slump. The Avaus business, according to Storbacka, has not yet been significantly affected by the coronavirus. “In fact, March is going to be extremely good. We have long-term projects, and we are often attached to corporate development budgets, not advertising budgets. Usually, we develop capabilities that are not as cyclical as advertising, ”he says.
Storbacka expects the coronavirus to become a dent in the business of Avaus, but then demand will increase in the fall – or as soon the crisis is over.
“Every marketing executive will have to reduce their running cost by maybe 25-50%. Through the capabilities that Avaus offers, smaller assets can be used more efficiently. By developing better algorithms in the use of customer data, we are in a better position to help companies succeed in the new normal,” she explains.
Avaus tracks the marketing industry from a slightly different perspective than, for example, typical advertising agencies. According to Storbacka, what is happening now, and its consequences, are really interesting from the point of view of Avaus. “Marketing managers are now facing a really tough strategic management challenge. You can’t afford to make stupid decisions. For example, on LinkedIn, the feed is filled with instructions, and everyone is in a panic trying to save their own business. Media agencies encourage you to buy media space and advertising agencies encourage you to advertise. You have to think about to whose instructions you are listening,” says Storbacka.
A joint report with Sanoma Media Finland, was recently released showing that the share of labour input in marketing investments, and the number of marketing jobs, have both increased significantly over the last decade. “An expanded market is likely to contain quite a lot of inefficiencies and duplication. The unusual and unexpected shock we are experiencing will cause this expanded market to shrink back to its old size,” she says. “25% of all those working in the marketing industry will face redundancies over the next year,” Storbacka now predicts.
On the other hand, the situation also forces us all to innovate and do things in a new way, for example, to work more efficiently using smarter processes and artificial intelligence, and to automate things that have been done by hand until now. Storbacka predicts big changes in the entire economy.
“In a situation like this, you cannot afford marketing process inefficiency anymore. This is a very uncomfortable discussion. Job losses will be inevitable as technology will command a much bigger role in the near future. There hasn’t been a lot of automation pressure in the past, but now there is, ”says Storbacka.
The text is a translation of an article published in Markkinointi&Mainonta March 24th 2020 Picture: Vesa Laitinen