I’m a bit of an epidemiology nerd. The kind of person who knew what R0 was, long before coronavirus came into our lives. I’m a member of a local non-profit organization promoting public health (including vaccines), and most of my friends are physicians and scientists who deal with public health issues daily.
I’ve been following COVID-19 for the past months. Three weeks ago, it became crystal clear to me that this is The Real Deal. To quote the head of the World Health Organization:
This is not a drill.
COVID-19 is about to change the world as we know it. Do I sound overdramatic? That’s because the situation is practically surreal. I had to check several times over the past couple of weeks, and no matter how much I pinch myself, this isn’t a bad dream. It’s here, and we all have to deal with it.
Beyond taking the essential measures needed to protect our family, I also took a long hard look at my business. If you’ve been following my revenue and traffic reports, you know that I’m a work-from-home web publisher. I have a team of VA’s and freelance writers, producing around 150 blog posts a month for a portfolio of content sites.
So, here are my thoughts are on the effect of the coronavirus crisis on our business model.
Warning: if you’re prone to anxiety, you may want to skip this post. Seriously. Things are scary, and it can take some time to get used to the concept.
- What is COVID-19 (in case you’ve been living under a rock)
- Why COVID-19 is bringing down the global economy
- Oh no! Is this the end of the world?
- What’s going to happen to our industry
- So, where does that put our sites?
- And on a positive note
- Keep calm and wash your hands
What is COVID-19 (in case you’ve been living under a rock)
I’m overwhelmed by corona information by now, but that’s partly because I live in Israel and partly due to my involvement with our non-profit organization.
The Israeli health department has been on high alert for several months now, kicking protocols into action before we even had a single case of COVID-19. As I’m writing this, over 20,000 people are in self-quarantine. To give you a sense of the scale, think 750,000 Americans.
So, what’s going on?
A member of the coronavirus family jumped from animals to humans. Whenever a virus does that, it’s a huge deal because it means we’re dealing with a new pathogen. No one is immune to it, and we have to figure out what it can do.
It’s happened before. With the Spanish flu, a hundred years ago. Later on with Ebola in the 90’s. And again in the 21st century, with Avian Flu, Swine Flu, MERS and SARS. Whenever something like this happens, epidemiologists go on high alert.
So far, the new viruses in the 21st century weren’t too bad. With the flu varieties, we managed to use existing flu vaccines to contain them. MERS proved to be not very infectious. SARS was scary, and a close call, but again, not contagious enough. Severe containment measures managed to bring it down to the point where the virus was eliminated.
COVID-19 is the name of the disease. SARS-CoV-2 is the name given to the new coronavirus that causes it. It first showed up in Wuhan, China, several months ago. Whether it came from bats or pangolins doesn’t matter. At some point, one virion entered a human being, mutated enough to be able to multiply in a human cell and turned him or her into “patient zero.”
And this time, we were not so lucky. Here’s why.
The new virus is very contagious. It’s currently estimated to be slightly more infectious than influenza. That’s really bad because most of us have some immunity to the flu. We don’t have any against the new virus.
Not to get too technical, the current estimates talk about a basic reproduction number of 3-4. I’ve seen higher estimates, but trust me, 3-4 is pretty awful in a population with no immunity. It sucks.
So, this is the first reason not to let your guard down when people tell you, “it’s just like the flu.” In terms of how infectious it is, being like the flu in a population with no immunity is a pretty bad thing.
The current estimates talk about 40%-70% infection rate within a year.
It’s more virulent than we had thought at first
Calculating mortality rates for this virus is challenging. The WHO recently put out an estimate of 3.7%. Some experts think this is too high and the real figure is around 2%, with some going as low as one percent. That in itself is horrendous. Dreadful. Think about it. Do you know 50 close relatives and friends? One or two of them will be dead of COVID-19 in a year.
But here’s the problem. So far, most patients are in countries where they can get decent medical care. However, with 40% infection rate and higher, healthcare systems won’t be able to keep on doing that. Which means mortality rates are likely to rise.
The current estimate is that 10% of patients require hospitalization. About half of those need urgent care to keep them alive and help them recover.
Remember, this virus will have a 40%-70% infection rate within a year. Let’s take a state or country with 10 million people. Think Michigan, Ohio, Georgia, or Pennsylvania. And let’s go with the optimistic estimates.
Within a year, 4 million people in that state will get sick. 400,000 people will need hospitalization. No country in the world can take in so many sick people into their hospitals. There are not enough beds, medical staff, oxygen masks, or respirators. Which means mortality rates will go higher than 1%. Probably close to 4%. That means 200,000 dead people in each of the states I mentioned above.
Across the US, in the most optimistic scenario, we’re talking about 6-7 million dead from coronavirus within a year. And honestly, considering how little the US government is doing to contain the disease, I see no reason for optimism. The numbers are likely to be much higher.
March 25 update –
I can’t believe it’s only been 20 days since I originally published this post. Since this is a crisis that keeps developing, here’s a quick update.
The de facto global death rate at this point may be as high as 15%. If that seems high, keep in mind that you can only calculate the death rate in relation to closed cases. Not to the number of active cases. Here are the stats from the Corona Worldmeter page today –
Do not despair just yet. The above number is very vague. It’s a total derived from reports by countries all over the globe. Some of the data isn’t accurate. Also, this disease can take many weeks to recover from, so hopefully, some of the recovered cases take longer to be counted.
According to the WHO, we’re currently at 413,467 confirmed cases and 18,433 deaths. In other words, a death rate of 4.4%. And that’s assuming that every person who is currently sick, including the ones in very serious condition, will miraculously make it. Not a very realistic assumption.
It looks like a death rate of 8-10% is a realistic range.
Infection rates also vary between countries and states, depending on the measures in place. In the US – my main market – it’s a mixed picture. Some states/counties/cities seem to be going for some form of lockdown. Many others do not. President Trump said he’s itching to scale back social distancing. Fortunately, that’s not really his call at this point and we can only hope that state governors are going to be smarter than that.
I was told by some commenters that my predictions are too grim. They may be for areas where social distancing is properly enforced. Otherwise, they may have been too optimistic.
Either way, please follow reliable resources on the crisis. Here’s a link to the World Health Organization page with updates.
But what about a vaccine?
A viable vaccine is going to stop this. But only two years from now.
Some people seem to think you can just inject people with a “dead virus” and vaccinate them. It doesn’t work like that. Yes, the technology is very advanced, with new recombinant vaccines being more effective and safe than ever. But regardless of the type of vaccine, developing a formula that “attacks” the right antigens, can be tricky.
Then you have to test the new vaccine in several phases. One of them being particularly long – where you not only vaccinate human volunteers but also wait about a year to see whether they contracted the disease or not (compared to a control group). You can’t expose human subjects to the virus on purpose – you have to wait and see what happens naturally. And that takes time.
And once you have your formula, producing 9 billion doses is going to take a long while too. Assuming we’ll need just a single dose per person. Many vaccines require more.
In short, while vaccines are awesome, don’t expect the COVID-19 one to be available before 2022.
Why COVID-19 is bringing down the global economy
To slow down the infection rate and allow medical staff to treat as many patients as possible, governments use containment and mitigation measures.
We’ve seen the most extreme measures so far in Hubei, China. Tens of millions of people are in lockdown. No one is allowed to leave their apartment. This has been going on for six weeks now. And yes, while it’s helped bring down the number of sick people, it also means the entire local economy is paralyzed.
Other countries use less severe measures at this point, such as self-quarantines for people who arrived on flights or were exposed to confirmed cases (Israel) or completely isolating large regions of the country (Italy). We’re going to see more interventions in various countries across the world.
The reason they had to take such severe ones in Wuhan is that they didn’t do anything at first. The same thing is happening in the US right now, so I wouldn’t be surprised if we’ll be seeing lockdowns in main US cities next month.
When people stay at home, they don’t work. They don’t make money. They also don’t manufacture raw materials or ship products. Governments will allow – and even force – some people to stay on their jobs, but most markets are going to suffer.
I’m not sure the word “recession” is even adequate here. This will be some sort of mega-recession.
Oh no! Is this the end of the world?
Losing 2% of humanity isn’t the end of the world. This is not the apocalypse. Humanity will survive this crisis.
In my opinion, it’s safe to assume that once the initial panic subsides, we’re going to see some sort of an equilibrium where people are asked to generally stay home and avoid public places, but they can go out if they absolutely must.
Stores will begin to open up again, as long as they can allow for enough space between people. Hand sanitizers will be everywhere. Now and again, a major local outbreak will bring about more significant temporary measures, but overall, we’ll adjust to living with the coronavirus, until there’s a viable vaccine.
What’s going to happen to our industry
I can see two problems emerging in the web publishing industry –
Traffic patterns are already changing. In some niches, this is happening faster than in others. I’m already seeing it in some of my sites.
Since the whole situation is unprecedented, the way user behavior will change is anyone’s guess at this point. Here’s my guesstimate –
As primary containment measures are taken, the severity of the situation will begin to dawn on people. Judging by my Facebook feed, 90% of people still don’t realize how bad things are. As they begin to figure things out, their attention will be drawn away from “pastime searches.” People just won’t be in the mood to look for a new dress or information about caring for their pet grasshopper.
Sure, searches about COVID will go up. This has been happening in the US over the past few weeks, according to Google Trends. I’m mostly amazed that search volume was so low up until February.
Most of the searches will be related to the nature of the disease, looking for information. Clearly, that’s a YMYL topic, so I doubt small publishers will be able to compete over these queries.
People will also be looking for information relating to living with COVID-19 around –
- How to prepare effective sanitizer at home (none is available in stores)
- How to create respiratory masks at home
- Produce preservation techniques.
- Home remedies (not just for corona – medical care will be a rare resource).
If one of your existing sites is related to that – congratulations!
However, if your site is about flower arrangements, jewelry, dessert recipes, or any one of a thousand hobbies and pastimes that make our life so awesome, my prediction is that you’ll be seeing a decline in traffic. At least at first.
As people get used to the idea, they’ll all have to adjust to living with COVID-19. Once the initial panic subsides, we’ll probably see these cultural changes –
- Avoiding flights and overseas travel.
- Staying at home instead of going out to cinemas and restaurants.
- Working and studying from home.
- Ordering online instead of going out to the stores.
Did you catch that last one? Yay! A ray of light for us web publishers.
The effect of a mega-recession on ad rates
The initial shock is going to be bad. Many companies, of various sizes, will probably collapse. A company that can’t function with its employees working from home will be in trouble. Unless it has the financial reserves to pull through the first few months, it’s going to go belly up.
And to conserve resources at times of uncertainty, companies are likely to pull down all branding campaigns, i.e. banner ads. The laws of demand and supply will take effect, with ad rates going down.
Later on, at things stabilize, some companies may do very well. You still need to feed, cloth, and amuse the world. Companies that will make it through the initial “shock and awe” stage, and manage to function with at least some of their employees working from home, will have the advantage. Competitors going down means they get a larger share of the market. It may be a smaller market altogether – because of the recession and high unemployment rates – but some companies will probably come out on top.
So, where does that put our sites?
This is the big question and one that I’ve been personally struggling with for a few weeks now. If you’ve read our latest traffic and revenue reports, you know that the business is in the red. We’re making money, but we’re investing even more into content creation.
That was always scary, but now with the world going crazy around us, it’s scarier on a whole new level.
Ultimately, we’ll all have to take a hard look at our businesses, consider our risks and chances, and make decisions. I still don’t have answers as to my business model. Here are some thoughts, though.
What niches will be hurt the most
Some niches are more resilient than others. Right off the bat, the travel industry is practically about to collapse. Look at me. I was supposed to spend today driving a rental Chevy Suburban from Miami to Key West, across the overseas highway in Florida. Instead, I’m sitting at home, typing away this post.
We canceled our trip just in time, and many people are doing the same. A friend who’s traveled to the US on the same day said the plane was nearly empty. Airlines are already canceling some flights on their own. They just can’t pay to keep the planes in the air if no one is paying for tickets.
Public attractions in Italy are all shut down. The same will be happening everywhere within a few weeks. Hotels will feel the pain too. At first, they’ll host quarantined tourists or those who failed to catch a flight out back home. Eventually, these people will catch another flight, and the hotels will shut down.
Here is what the traffic looks like on our travel blog. The last seven days, compared to the previous seven days. A decline of 15% in traffic, where it should be going up –
In other words, this is a pretty bad time to rely on a travel blog.
Other niches that are likely to take a hit:
Party planning, wedding planning, clubbing, public transportation (is that even a niche?). Anything that has to do with getting a large number of people together. Restaurants and movies – to some extent. I hope they’ll be able to adjust to food delivery. Cinemas will likely shut down, but moviemakers may be able to keep going thanks to streaming services.
What else? You tell me. I’d love to see comments from others about which niches might be affected.
Traffic update (March 14)
Here’s a quick traffic update. Like many other web publishers, I’m seeing a decline in traffic over the last 2-3 days. Since most of my traffic is US-based, I guess people are gradually realizing what’s happening, spending less time on my kind of sites. Here’s a typical chart, comparing the last 7 days with the previous 7 days –
So, generally another 4-5% down. What I’m seeing here is that most people still don’t realize what’s going on. Speaking to friends in the US it sounds like the recent Trump address has put many people at ease. My bet is that we’ll be seeing more traffic decline over the next 2-3 weeks. Probably sharper drops once MayDay reports start coming in from hospitals.
Affiliate marketing may still do well
As e-commerce will become more popular than ever, affiliate marketing may be the way to go. So, it’s not all bad. Eventually, banner ads for eCommerce may return as well, as investing in online promotion will seem profitable.
And on a positive note
I don’t want to be all doom and gloom.
So, let me try and cheer you up. As website owners, we’re actually positioned better than most to get through this crisis.
We work from home
If they put me under lockdown or isolation (something that’s been happening to many of our friends), I can just keep on working as usual!
I don’t have to worry about taking the train or bus to work either. I can just walk from my bedroom to my office room – an all germ-free path!
Whether you work on your sites on your own, or you work with VA’s and other freelancers, you’re far more flexible than most companies. For example, I’m going to stop investing in content for my travel site for a while. It was easy for me to make the decision overnight. Flexibility is useful when the environment changes.
The Internet is Robust
The internet itself was created to be able to survive WW3. It’s extremely robust. Disaster experts think that we’ll still have an internet connection even when there are electricity outages. That’s good news for web publishers.
Content will become cheaper
With more people staying at home, eager to find an online job, the rates per word are likely to go down. As content publishers who are in this for the long haul, this can be a good thing. Consider your investments wisely, but if you can, this could be a good time to build larger sites.
Keep calm and wash your hands
This is going to be hard, but it’s not the end of the world. We will get through this. There’s no need to panic – it won’t help anyone. As my favorite CDC poster goes –
I’d love to hear from other web publishers and bloggers. What do you think about the COVID-19 crisis’s effect on our industry? What are you doing to prepare for that? And if you have any questions about the virus, the outbreak, etc. feel free to live them. Not everything is known right now, but I’m pretty up to date on things, so I’m happy to help with that too.