Media Matters goes beyond simply reporting on current trends and hot topics to get to the heart of media, advertising and marketing issues with insightful analyses and critiques that help create a perspective on industry buzz throughout the year. It's a must-read supplement to our research annuals.
The WARC’s Global Ad Trends report for May 2020, “The Impact of COVID-19 on Ad Investment,” quantifies what we’ve known all along. Ad spend plummeted after the outbreak, and it will take some time for it to get back on track.
As shown in the following table, all global ad investment was down post-outbreak regardless of medium. Most digital venues, however, fared better than traditional media; pre-outbreak spending for social media in 2020 was projected to be 20% higher than in 2019, while post-outbreak it was only projected to be 9.8% above the previous year. Not great, but still up. TV, on the other hand, only had projected pre-outbreak growth of 2.5% compared to 2019, but post-outbreak, it fell to 13.8% below the previous years. For obvious reasons, cinema advertising fared even worse, with a -31.6% post-outbreak loss, compared to the previously expected 5% increase. Print media fared worst of all; already expected declines of around 6% for 2020 saw double digit declines once COVID’s impact was felt.
When it comes to ad spend by industry, the findings were similarly disheartening. With the exception of telecoms and utilities, which were down but still in positive territories, all other industries fell into negative territories post-outbreak. Retail, financial services, leisure/entertainment and travel/tourism were the hardest hit, as people tightened their purse strings and stayed home, but even the food industry ad spend was down nearly 8% post-outbreak.
There may, however, be some indications that the situation is improving—if only insofar as the deep cuts to ad spending may be easing slightly. Per the IAB’s “Coronavirus Ad Spend Impact: Buy Side” report, in March/April 2020, U.S. advertisers cut their planned ad spending by 43% for traditional media and 38% for digital media. For May/June, the corresponding figures were -35% (traditional) and -29% (digital). It’s hard to look at numbers still in the red as a good sign, but at this point we’ll take what we can get. As to whether ad spend will improve in the second half of 2020, this depends on how the currently worsening COVID situation evolves.
In a weekly poll of 1,501-2,200 U.S. adults, Morning Consult, a global research company specializing in consumer sentiment, found that very few respondents want to do much outside the home. Per its weekly report, “When Will Consumers Feel Safe Again?” when respondents were asked if they feel comfortable doing certain activities “right now” (the week of June 30-July 3), the findings were as follows:
The long view isn’t much better. When asked when they might feel comfortable doing such activities again, the largest proportion of respondents said that it would probably be more than six months before this occurred.