Schaunaman Under Stress: Advertising Crushed by Coronavirus

Aberdeen Mayor Travis Schaunaman is all about advertising. He advertises his marketing business in the first sentence of his official city government bio. A commenter thus wonders if Mayor Schaunaman is responding so poorly to the coronavirus crisis, with constant pro-business propaganda and little well-informed scientific caution simply because he’s freaked out by the collapse of advertising industry revenues.

I don’t have Schaunaman’s quarterly reports, but it’s likely that Schaunaman, like other entrepreneurs who’ve built their business model on creating wants rather than fulfilling needs, is taking a hit from the pandemic. Advertising is particularly vulnerable: a friend in local media tells me advertising is one of the first budget items that businesses cut when the economy gets tight. With a huge majority of consumers in support of continued economic shutdowns, businesses are even less inclined to sound like the callous jerks shouting, “Come out! Risk your life to buy our stuff!” especially when their stuff isn’t a priority for consumers:

As the shutdown stretches on, overall ad spending has plunged: Figures tracked by Kantar indicate that spending on 30-second TV spots has fallen by double-digit percentages for at least five weeks since the pandemic hit the US. However, there are some signs of growth in certain categories, such as pharmaceuticals, insurance, and household products. Meanwhile, travel spending has all but completely dried up, and retail and automotive sectors have also taken a hit.

“We’re not seeing a lot of ads for vacations and Disney World right now,” said Mark O’Toole, who oversees marketing firm Mower’s Newton office. Instead, it’s “more traditional items, … food items, things we can get delivered” [Janelle Nanos and Jon Chesto, “Advertising in the Age of Coronavirus,” Boston Globe, 2020.05.07].

Even those still willing to advertise don’t want their brand associated with grim coronavirus news, making it harder for news organizations to sell ad space:

To stay away from bad news, advertisers often turn to a method known as blacklisting. It allows airlines to avoid running ads near plane-crash coverage, and companies with wholesome images to keep away from articles containing words like “murder” or “sex.” In a time of political polarization, frequently blacklisted terms include “Russia,” “impeach” and, among the most avoided, “Trump.”

Lately, the most-blocked terms pertain to the virus. Blacklisting during the pandemic has kept more than 1.3 billion ads from being displayed next to content featuring the word “coronavirus” on websites, according to the ad verification firm Integral Ad Science. That has had a devastating effect on ad-dependent news organizations, many of which have been forced to lay off workers at a time when the pandemic has dominated coverage.

…If the pandemic lasts through June, keyword blocking will drain more than $1 billion in revenue from online news publishers in the United States, according to a study conducted by Cheq and the University of Baltimore’s Merrick School of Business. News publications are twice as likely as other platforms to have ads scrubbed because of coronavirus-related content, IAB said [Tiffany Hsu and Marc Tracy, “News Outlets Want More Advertisers to Act Like Burger King,” New York Times, 2020.05.07].

The entire news industry, which has built a bassackwards business model on advertising other people’s fripperies instead of the superior value of its core product, the news people need to act as informed citizens in a democracy, is in great financial peril:

The clock is ticking, especially when the “business of journalism is facing an extinction-level threat,” as Craig Silverman, a BuzzFeed News reporter, put it in a recent article.

“Virtually all entertainment advertising is gone, restaurants gone. Automobile advertising is starting to get impacted,” Alan Fisco, president and CFO of the Seattle Times, told Silverman [Nu Yang, “Fallout: As the Coronavirus Wipes Out Ad Dollars, Will the News Industry Recover?” Editor and Publisher, 2020.05.04].

To survive, some alternative media are turning to the public broadcasting model of direct viewer/listener/reader support

John Heaston, publisher and editor of The Reader, the alternative publication in Omaha, Neb. and president of the Association of Alternative Newsmedia, said in a recent E&P Reports podcast many alternative publications are now launching or ramping up membership programs. According to Heaston, a few publications are measuring how many registered digital users are turning into paying users, and they’re seeing returns five to 10 times the rate.

“We don’t have paywalls, so these are people voluntarily stepping up to support journalism,” he said [Yang, 2020.05.04].

Wait—a business model that depends on delivering quality instead of having Mayor Travis manufacture market buzz? Uh oh!

A public health crisis that causes people to stay home, spend less, and reprioritize their remaining spending is bad for most businesses. It’s particularly bad for the marketing business. I can understand why Schaunaman would want to get Aberdeen back to normal as quickly as possible: his livelihood depends on consumers being able to spend freely on goods and services they want rather than focusing on things they needs and then his secondarily being able to persuade the peddlers of those non-essential wares that they can afford to spend extra money on marketing to separate more fools from their money.

We all would like to get back to normal life—dinner out on Friday in in a crowded, happily buzzy restaurant; taking time at stores to try on a few items and chat with neighbors; going to the races and concerts and arts festivals; spending money on pleasant distractions without fear that we’ll be losing our jobs or paying hospital bills due to coronavirus next week—but we can’t afford to go back to normal, not unless we take the Trumpist position that a hasty return is worth thousands or maybe millions of preventable deaths. Effective pandemic response is really bad for business, if your bottom line is your quarterly profits, but not if your bottom line is public service… and keeping alive a public to serve.

There’s one of the problems with electing salesmen like Trump and Schaunaman to public office: they don’t just think government should be run like a business; they tend to run government like an extension of their business, just one more mechanism they can use to boost their brand and their profits. They make decisions less in the public interest and more in their own interest.

That doesn’t mean businesspeople can never serve in government. But it takes diligent attention and strength of character to segregate one’s private interests from public service, to leave one’s business concerns at the city council chamber door and cast votes for policies with no eye toward how those votes might alienate potential customers back at the shop or otherwise reduce the flow of cash into one’s register. There are other businesspeople on the Aberdeen City Council (funny—none of them advertise their businesses on the city website) who appear to have kept their personal business interests and anxieties from coloring their public policymaking during this public health crisis. We can only wish that Mayor Travis could learn from their example.