Paused your digital marketing campaigns? Here are 3 things you might be missing out on…

If you’re not conducting some form of Digital Marketing right now you may be missing out on a unique opportunity

Something interesting is happening online right now, and it’s not the abundant production of Tiktok videos. It’s happening across the big end town with multinationals letting fear override everything we’ve learned during the GFC and pulling their online ad campaigns (Source: New York Times). Marketing in a time of crisis is an easy budget for reckless CFOs to slash and burn because, one, marketing costs seem like unnecessary expenditure and two, it’s an easy expense to cut because the negative impacts on brand awareness, sales and reputation won’t be apparent for some time. The Internet Advertising Bureau in the USA shared a research article last week claiming that 86% of publishers had been asked to pause or cancel their client’s ad campaigns. Online marketing guru Neil Patel has shown online traffic has fallen across a range of industries, with the obvious categories such as Construction, Transport, Travel and Advertising leading the declines. 

Source: NeilPatel.com

However, the world’s largest marketing research firm, Kantar released a COVID-19 research barometer which found that only 8% of people felt that brands should stop advertising. Adding strength to their previous findings that brands who continue to advertise through a downturn come out in a stronger position than those who do not.    

1. Heavily discounted ad inventory

With large brands pulling their campaigns it’s putting pressure on publishers to reduce prices. Particularly for auction based biddable media, such as Google Adwords. US search agency Wordstream has shown cost per click prices are declining between 7-23%, depending on industry. At the same time conversion rates are increasing across a number of categories so this is an epic time for small businesses to launch branding campaigns. This doesn’t necessarily mean diving in to exploit the situation, but it’s an efficient time to launch videos and brand building campaigns to build trust in your business. 

2. The new growth sectors transacting online

Looking for certainty is still dominating search queries with terms such as ATO Jobkeeper, Centrelink Job Seeker, and LinkedIn featuring the daily Top 10. However, entering the 5th week of home isolation people are turning to search for inspiration and learning.  These search terms are increasing exponentially: 

“How to Make”

Source: Google Trends

“How to Bake”

Source: Google Trends

“Free online Learning”

Source: Google Trends

“Free Online Games” 

Source: Google Trends

Free TAFE Courses NSW 2020 Coronavirus is currently the #9th most ranked search on Google, after the common questions about tracking the virus and seeking employment assistance. 

So tapping into this trend, you could create short form videos for a bit of education and fun about your business, these are the types of content that are being shared on social channels.

Sydney Wildlife Zoo is keeping kids and grown-ups entertained with a mixture of education resources such as the Animal Habitat Sheets and fun live streams of their animal feedings.

https://www.facebook.com/wildlifesydney

The Sydney Opera House is opening its doors streaming recordings of their most popular concerts as part of a new program “From our house to yours”. Keeping audiences engaged and showcasing some of their best Theatre, Music and Talks.

Local producers are also coming together to support each other during the COVID-19 lockdown. Tamworth Pub, the Wedler’s Arms found itself in a challenging position when social restrictions forced the closure of pubs, hospitality venues and cafes. However, the team was fast to innovate and pulled together a collection of the best food & beverage suppliers in the region to produce Bunker Boxes. Using the pubs brewery and cold storage facilities, produce is centralised and packed ready for distribution. These Bunker Boxes have a variety of produce which is unique each week and includes cakes & breads from the local bakery, fresh market vegetables and meats all from within the region. This is a great way for people to get their weekly food supplies whilst also supporting the regional community. There’s been over 100 boxes a week sent out so far.

3. Small Business Credits

If you’ve been using Google Ads in 2019 you may be able to access their small business credits. This is designed to encourage existing customers to continue spending so you’ll need to have spent with Google at least 10 out of the last 12 months. If you’re new to the game, then maybe it’s worth considering setting up a Google My Business and Adwords account. Once you’ve registered your business credentials you can access $100 worth Ad credits to start testing. The other option and our recommendation for beginners and intermediate marketers alike is doing one of Google’s free courses. There’s a Fundamentals of Digital Marketing Course specifically designed for self-paced e-learning and aimed at getting your small businesses e-commerce ready. The best thing is you can do it at your own speed. The subjects are broken down into simple modules with quizzes and an online exam and certificate at the end of the course. https://learndigital.withgoogle.com/digitalgarage-au/course/digital-marketing

Facebook is also supporting small businesses with grants for businesses who have experienced challenges because of COVID-19. The grants work through an application process and the company must have been operating for at least a year and have between 2-50 employees. Further details of this program are yet to be announced for Australia but it’s worth registering for here. It’s also a great time to use that home time to brush up on some Facebook Skills, check out some of the courses on Facebook Blueprint 

New advertisers to Linkedin can also claim a AUD$50 credit to get started. The strength of using this channel is an ability to promote B2B events aimed at a professional audience. Before you rule out this channel, keep in mind that your suppliers, employees and distributors are also professionals in their specific fields. Linkedin may offer a unique way to strengthen these partnerships whilst also building your reputation looking for new partners. 

In the absence of face to face customers there are numerous ways your business can still operate and build its reputation, don’t stall in adjusting your operating model.

5 leading indicators to show what is happening to our Tourism Industry

6 min read

Following the 24-hour news cycle these days, is not only depressing, but it can also be a challenge to think of anything other than the immediate response to travel restrictions, self-quarantine and health recommendations; developments which are literally unfolding by the hour.

Industry estimates that the Australian tourism industry is losing $3 billion dollars for every month that this continues, impacting over 130,000 jobs. The Small Business Council of Australia estimates that over the next few months 500,000 people will lose their jobs.

https://www.cosboa.org.au/blog-1

Airlines flying into and within Australia have cut capacity (Qantas announcement), Cruise ships are banned from docking in Australia for 30 days, Travel restrictions are now in place for any non-Australian residents or citizens. More info here

“WITH YESTERDAY’S ANNOUNCEMENT OF ISOLATION MEASURES FOR ALL NEW ARRIVALS TO AUSTRALIA, OUR INBOUND TOURISM INDUSTRY HAS EFFECTIVELY BEEN SHUT DOWN”

Peter Shelley, Australian Tourism Export Council

We are currently in the eye of the storm, and as we draft this article from Asia Advisory’s offices in Chinatown it certainly feels like an appropriate analogy. It’s quiet without tourists. Restaurants along Dixon Street are discounting to attract customers. Busses and trains have empty seats, and those few who are still commuting sit vacantly, head buried in their phones. Universities and colleges in the capital cities are going on breaks and some retailers have shut their doors for the next 2 weeks.

January visitor data is available and now, with a pause on Tourism, or business more generally, the challenge is two-fold. First, it’s difficult to understand what current tourism demand actually looks like. Secondly, it’s difficult to plan business continuity when our data is not reactive enough to pick up a recovery.

The research on visitor arrivals and spending behaviour has a 2 month lag for monthly reports and a 6 month lag for annualised quarterly data

In order to address these short term questions, we’ve collated a number of news and industry reports to reference five leading indicators designed to help understand what is happening across our Tourism industry.

1. Tourism Company Financials

Australia’s largest tourism companies, like Qantas, Virgin, Crown and Sealink are also amongst the industry’s largest employers. When these companies start making staff redundant, and they will, the effects flow through our economy. The airlines and cruise companies are the canaries in the mine as changes in inbound tourism capacity then flow through to other sectors; for example international education, transport, accommodation, retail, food and beverage and the tourism operators.

Altman-Z Sores to measure solvency

We’ve used the Altman-Z Score system to evaluate the financial stability of these companies and to assess the chance they will default without outside assistance. The Altman Z-score is based on five key financial ratios that have been derived from published annual reports. This process assesses profitability, leverage, liquidity, solvency, and share prices to estimate the likelihood of the business becoming insolvent without external or government assistance.

A score of less than 1.80 shows the company is in financial distress and has a high change of insolvency without outside assistance. Between 1.8-2.99 is the Grey zone which should be monitored regularly. A score of greater than 2.99 indicates the company’s financials are sustainable.

Qantas (AU:QAN)

Qantas has lost 69% of its market capitalisation since January. The group has suspended up to 90% of their international capacity and 60% of their domestic capacity. This is still critical that travel in Australia doesn’t get further down graded as domestic travel proportionally represents 68% of Qantas group revenue. The group has just announced they will stand down two-thirds of their 30,000 workforce from the end of March until at least the end of May.

Source: Commsec 19th March 2020
Share PriceMarket CapAssetsDebtDebt/EquityAlt-Z Score
$2.25$62m$23.64m$20.17m3251.23
Source: FY19 Annual Report

Qantas has a huge debt to shareholder equity ratio (325x) which is reflective of the fall in the share price. Additionally, the business scores a 1.23 on the Alt-Z score showing that it has a dangerously high chance of becoming insolvent without urgent outside financial assistance.

Virgin Australia Holdings (AU:VAH)

Virgin has lost 61% of its market capitalisation since January. The group has suspended all international flight capacity from 30th March until 14th June. Domestic capacity has also been halved until 14th June and will be critical for this year as it makes up approximately 67% of group revenue. Virgin is yet to announce redundancies at the time of writing but we’re likely to see something before the end of the week.

Source: Commsec 19th March
Share PriceMarket CapAssets
(m)
Debt
(m)
D/E RatioAlt-Z Score
$0.059$469,831$6,468.2$5,849.312,4500.67
Source: FY19 Annual Report

Virgin has an unsustainable debt to shareholder equity ratio (12,450x) which is reflective of the decimation of its share price. Additionally the business scores a 0.67 on the Alt-Z score showing that it has a dangerously high chance of becoming insolvent without urgent outside financial assistance.

SeaLink Travel Group (AU:SLK)

Sealink lost 43% of its market capitalisation since January, however, the group has diversified its portfolio of tourism and bus/tram transport products, reducing tourism to 15% of its revenue with the recently completed acquisition of Transit Systems group.

Source: Commsec 19th March
Share PriceMarket CapAssetsDebtD/E RatioAlt-Z
$2.68$1.49m$301.5m$143.6m961.86
Source: Annual Report FY19

Sealink has significantly increased its assets with the Transit Systems Group acquisition, but the market capitalisation has been severely punishing on the debt to equity ratio. The Alt-Z score of 1.86 places the business in the grey zone, it is likely that the business will need a captial raising effort or to seek alternative sources of funding within the next 12 months.

Flight Centre Travel Group (AU:FLT)

Flight Centre has lost 78% of its market capitalisation since January. The group is undergoing an urgent business review to identify cost and savings initiatives. It has flagged that job losses will be inevitable but the company is in discussions with the Federal Government for industry assistance packages.

Source: Commsec 19th March
Share PriceMarket CapAssetsDebtD/E RatioAlt-Z
$9.90$27.7m$3,493m$1,755m1268.39
Source: Annual Report FY19

Referencing the FY19 Annual report, Flight Centre’s financials are robust. The company has an Alt-Z score of 8.39 which indicates strong financial health. The challenge will be whether the business can sustain the disproportionally large workforce of 14,346 (as at June 30 2019) during a period when International and Domestic travel has been put on pause, whilst also competing with a blooming number of relatively more nimble international and domestic online travel agents. Further announcements are likely next week.

Crown Resorts Ltd (AU:CWN)

Crown Resorts is an interesting one to watch, particularly with its exposure in Maccau and disproportionate client weighting of Chinese inbound tourists. The company has lost 52% of its market capitalisation since January.

Source: Commsec 19th March
Share PriceMarket CapAssetsDebtD/E RatioAlt-Z
$6.00$39.7m$7,633.8m$2,536.9m642.43
Source: Annual Report FY19

From the FY19 Financial report, Crown has been sitting well but the Alt-Z score is at the higher end of the grey zone indicating some caution required. The FY20 first-half results need further analysis as earnings are down across the group with a significant hit from VIP Revenue down 34% this quarter. The next results will be reported in August.

2. Inbound routes and flight tracking

Airline traffic both internationally and within Australia has been falling over the past 6 weeks. Large reductions in capacity with aircraft taken out of service is an immediate reaction to meet demand and to manage overheads. Flight Radar gives a good indication of global flight traffic over the past 90 days and provides live monitoring of daily fluctuations. There’s been a 20% reduction in flight traffic around the world in the last week.

https://www.flightradar24.com/data/statistics

Quantifying the number of inbound flights into Australia is a more manual process but it’s worth a look at Andy Jiang’s research as he’s producing monthly updates.

3. Hotel Occupancy and average room rates

STR Research is the main provider of Australian Hotel Occupancy and average room rates. They report monthly and data is available through Tourism Research Australia and the Australian Accommodation Monitor. If you are an accommodation provider, you can subscribe to the free hotel research program and benchmark your property to competitors

The data insights, news, and whitepapers provide a free reference which is worth checking regularly. There are also a number of Webinars specific to COVID-19 available for download.

According to Siteminder forward bookings for hotel rooms in Australia are getting shorter with an average booking of 40 days in advance. This is likely to reduce further as international visitors re-evaluate their travel plans for 2020. Australian’s travelling domestically may help pick up some of the short term capacity and rate discounting is already prevalent for Easter Holidays online looking at Expedia.com, Australia’s largest online travel agent.

4. Tourism Attractions, Events & Experiences

A number of tourist attractions across Australia will be closed for the remainder of March, possibly longer. The government has upgraded advice against non-essential events now restricting gatherings of more than 100 people. The Sydney Opera House has cancelled live performances but tours and food & beverage outlets are still open. The Arts Centre of Melbourne has closed temporarily. The National Gallery of Victoria is also closed until 13th April.

A number of Sports, Events and music festivals have been cancelled as of 18th March:

The Melbourne Formula One GP, Sydney Royal Easter Show, Sydney Vivid Festival, The One Day International Cricket Series, The AFL and WAFL will be reduced to 18 games and possibility of playing without spectators. The NRL games will also be played without spectators for a TV audience, Super Rugby has decided the same. The Melbourne International Comedy Festival has been cancelled. Melbourne Food & Wine Festival and Adelaide’s Tasting Australia festivals will be postponed until later in the year. Numerous Music festivals have also been cancelled including Bluesfest, Splendor in the grass, Groove in the moo and others. More updates can be monitored regularly via ABC News

5. NAB Monthly Business Survey

National Australia Bank is Australia’s largest lender for small to medium enterprises and they have a wealth of insight and analysis on what is happening on the front line. NAB’s monthly reports are one of the best indicators of what is happening in the retail and food and beverage industries and these reports give insight into business confidence and household investment decisions. Have a look at the latest economic summary and latest March survey. Supermarkets have shown a 0.6% month on month increase in retail sales in February, possibly due to panic buying and stockpiling.  

Whilst the Tourism and Travel industry is effectively placed on pause for the moment, now is a good time to focus on reviewing products, updating marketing collaterals, training staff and planning for low-cost marketing initiatives such as your website, social media, and media hosting programs.

For more insights and analysis please follow our social channels.

Episode 5: Scale your tourism business… RAPIDLY

These are challenging times… So we’re sharing some of our ideas to help you prepare and re-grow your business quickly!

An interview with Asia Advisory Founder & CEO, Adam O’Neill and Haymarket HQ General Manager, Duco van Breemen on how to scale your tourism business rapidly. Free cheat: Strategic famil setups… Watch below for details!

Please subscribe to our Youtube channel, and follow our Social channels for more inspiration:

Episode 3: Three tips to help your business STAND OUT

In this episode Asia Advisory Founder & CEO, Adam O’Neill and Haymarket HQ General Manager, Duco van Breemen are back to offer three tips (plus a BONUS) that you can try working on to help your business STAND OUT!!!

We understand the feeling of finding yourself scrambling day to day, working for your business rather than on your business. So to help out, we’ve included a BONUS on how you can access government funding!

  1. Marketing
  2. Distribution
  3. Payments + BONUS (accessing government funding)

Please subscribe to our Youtube channel, and follow our social channels for more inspiration:

Episode 2: What does Asia Advisory do?

An interview with Asia Advisory Founder & CEO, Adam O’Neill and Haymarket HQ General Manager, Duco van Breeman on the 3 key areas that Asia Advisory specialises in:

  • Digital Marketing
  • B2B Engagement
  • E-Commerce & Mobile Payments

Please subscribe to our Youtube channel, and follow our Social channels for more inspiration: