Agencies worldwide close as shops in China open
The Chinese government began putting cities on lockdown and mandating quarantines in January to stop the spread of the coronavirus, formally known as COVID-19, that originated in Wuhan. And while some of those bans in China and other parts of Asia begin to lift as the government gets a handle on the situation, foreign nations including the U.S., are only just starting to grapple with the pandemic. As of this writing, there are 4,226 confirmed cases of coronavirus in the U.S., and 75 deaths, according to the Centers for Disease Control and Prevention. U.S. President Donald Trump proclaimed the coronavirus a national emergency this week and individual states like New York and California have taken increased action by shutting down schools, restaurants, gyms, bars and placing bans on public gatherings.
Agency holding companies including WPP, Publicis, IPG and Omnicom are either mandating or at least strongly encouraging employees to work remotely in impacted areas.
Omnicom Chairman-CEO John Wren told employees in a memo that they were mandated to begin working from home this week. In that memo, he added that leadership is "very pleased to see marked improvements in China and Singapore with our teams starting to get back to business as usual. Our people there did a great job in keeping their businesses functioning during the past couple of months. I want to thank them and all of you for your efforts now and what we know you will do in the weeks to come," Wren added.
“Chinese agencies and marketers started [preparing] early and thankfully finished early,” says R3 Co-Founder and Principal Greg Paull. “By extending Chinese New Year and strictly following government guidelines, it’s meant that life is more ‘back to normal’ now than any other client-agency ecosystem on Earth.”
Returning to 'normalcy'
Many agencies in China are easing their employees back into the "business as usual" mode after two months of working remotely. Ng says BBH China has implemented shorter in-office schedules for employees; instead of a 9 a.m. to 6 p.m. workday, staff is coming in around 10:30 a.m. and leaving around 4 p.m. to avoid peak traffic hours that could still put them at risk. She says employees are responsible for taking calls and doing work at home if need be before 10:30 a.m. and after 4 p.m.
Ng says BBH China then will gradually extend the in-office hours to, for example, 10 a.m. to 4:30 p.m. initially and so on. "We wanted to ease them back into reality," she says, noting that BBH China's office in Shanghai only staffs 80 people, which is small in comparison to some networks, so employees are able to practice social distancing while at work.
Sarah Weyman, chief growth officer of Dentsu Aegis Network China, says employees in the network's Shanghai office have taken extra precautions upon returning to the office last week. "We're being super careful," she says. "We're advising people to wash their hands, everybody has a mask, people aren't sitting too closely together."
Weyman says when employees enter the office, they also must be scanned for a fever or any signs of sickness or exposure to the coronavirus. "It's amazingly efficient and brilliant ... it's the new normal," she adds of the technology that was developed and deployed by the Chinese government.
Dentsu Aegis Network does have a small office in Wuhan, too, which remains closed. "Everybody from that office is safe and well," Weyman notes. "That [office] is unlikely to be open this month, but we've certainly been in close contact with them."
Adapting to remote work
As expected, there have been some hurdles and challenges to overcome for agency executives in China working remotely—and they are very likely similar to those agencies worldwide are now facing.
One CEO of a major agency network in China who spoke on the condition of anonymity points out, "Across China, being present in an office environment or agency is very important to people and working from home could have been quite unnerving for some. Our industry, especially in China, is incredibly fast, so adapting and operating under pressure is nothing new. But adding COVID-19 to the equation, we were faced with a whole new level of uncertainty," the exec says.
Weyman says pitching, while there have been fewer new business opportunities in the wake of the coronavirus, was done via video conferencing and particularly difficult to get used to. "It's kind of awkward," Weyman says. "We were doing pitch rehearsals over the phone beforehand, going through the different logistics like who's going to drive the deck and who's going to make sure the video doesn't lag. Make sure everyone's on mute. Generally, I kind of just missed pitching face to face."
In terms of having the IT support and leadership in place to manage employees working remotely, Weyman says that part was "honestly not that hard."
Ng says with technology already such a big part of people's lives in China, employees took to working remotely quite easily. Perhaps too easily: She notes that employees at home versus in the office are more prone to multi-tasking. "You keep getting group chats with 10 to 15 people," Ng says, "We'd be chatting with different people on different subject matters at the same time. You could be having three conversations at the same time."
Ng says she worked longer hours while remote—which feeds into an existing debate over whether allowing employees to work from home is really good for their wellbeing. Some argue working remotely forces people to work harder and longer and refrain from taking sick or personal days off.
Long-term effects
While returning to work may come as a relief to some executives like Ng, tired of being cooped up in their homes and away from the office, it's also surely coming as a relief to the agencies looking to revive their businesses as quickly as possible. In a report released today, eMarketer lowered its forecast for 2020 ad spending in China to $113.67 billion, a 8.4 percent growth from 2019, compared to its previous forecast of $121.13 billion, a 10.5 percent growth.
"That's the slowest growth rate since we began tracking China ad spending in 2011," eMarketer said in the report, while noting that "some effects of the coronavirus are apparent, the full impact on the broader Chinese economy—and thus on ad spending—have not yet been felt."
Brian Wieser, global president of business intelligence at GroupM, said in a recent report that companies in China including Alibaba and Baidu have forecast that they expect to gradually revive their revenues again in the coming months. Wieser said, "there appears to be a basis for optimism around a resumption of normalcy—or at least the 'new normal'—in the coming months."
"Unfortunately, much of the rest of the world is only now going through what China has gone through over the prior two months," Wieser continued. "This means we likely have yet to see the worst play out."
Correction: An earlier version of this story misstated that companies in China would gradually begin reviving marketing services in coming months; they will gradually begin reviving their revenues. It also insinuated Brian Wieser heard directly from those companies when he was referencing public statements in a recent report.
