Special Edition: How Coronavirus Is Impacting Marketers: Wednesday’s First Things First

Brands continue to pull out of South by Southwest

Chinese factories outside Hubei province, the epicenter of the contagion, continue to ramp up production this week.
Getty Images

Welcome to First Things First, Adweek’s new daily resource for marketers. We’ll be publishing the content to First Things First on Adweek.com each morning (like this post), but if you prefer that it come straight to your inbox, you can sign up for the email here.

Coronavirus Updates: TikTok, Intel and Mashable abandon SXSW plans; more major conferences and summits are canceled

With the coronavirus that causes COVID-19 finding a foothold in the United States, Europe, Asia and the Middle East, Adweek is dedicating the majority of today’s First Things First to how the coronavirus is affecting brands and advertisers.

The coronavirus has infected more than 90,000 people worldwide with over 100 diagnosed cases in the United States, leading to more than 3,000 deaths globally and at least nine deaths in U.S. As a result, companies are rapidly responding to keep their employees safe and try to delay the spread of the virus. Businesses began putting limits on travel late last week, but those travel restrictions accelerated Monday and Tuesday as agency holding companies and myriad brands cut non-essential business travel, especially to areas where the virus has circulated.

On Tuesday, Intel, Mashable and TikTok joined Facebook and Twitter in pulling out of South by Southwest, which is facing growing calls to cancel the event. Over 40,000 people have signed a petition to cancel the event to protect the people of Austin, Texas from travelers who could potentially spread the illness.

Elsewhere, Salesforce suspended non-essential travel overseas for its more than 50,000 employees, while Google canceled its I/O developer conference. Fox News, which had scheduled its annual upfront presentation later this month, decided to cancel its event. As of now, the broadcast TV upfront presentations are still planned for the week of May 11.

Read more: See a full list of cancellations and impacts.

Travel Uncertainty Leaves Agencies in Wait-and-See Mode on Booking for Cannes Lions

Normally, ad agencies, ad-tech vendors and brands would be spending March deciding whether to book a yacht in the south of France or which hotel they want to stay in on the Palais for Cannes Lions. This year, they’ve been left in limbo wondering whether the event will happen as planned. For now, Cannes Lions and its parent company Ascential “remains firmly open for business.” With nearly 12,000 attendees, the festival has a lot at stake. Unlike other award shows that generate much of their revenue through entry fees, the financial success of Cannes Lions and SXSW depends on turnout by sponsors and attendees given the large amount of revenue they derive from on-site activations.

Agencies and brands that normally attend Cannes have been forced into a holding pattern over whether to book travel and accommodations for Cannes. One agency told Adweek that it has already completed most of its bookings for housing, purchased passes and put down deposits at venues. About half of its travel is booked, and the company said it is monitoring the situation daily and will reassess each week to determine if changes need to be made.

The problem Cannes and SXSW attendees face? Few, if any, refunds will be issued if the events are canceled. Cannes has a policy in place that includes “widespread illness” as one of several factors that could require the schedule to change, but not the issuing of refunds. Given that it costs upwards of five figures to send someone to Cannes, agencies and brands, which are working on ever-tighter budgets, face difficult decisions in the coming weeks.

Read more: Agencies editor Doug Zanger spoke with a number of agencies about how they’re handling Cannes.

Related: What Can You Do If a Conference You’re Attending Gets Canceled?

Recommended articles