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Advertising Guidance Concerning COVID-19

Written by Tim Edmundson

As advertisers, it’s crucial to be engaged with our target audience’s behavior. With recent developments regarding COVID-19 (AKA the coronavirus), many consumers are being cautious, opting to avoid public spaces in favor of staying home. In all likelihood this will result in an economic impact.

GroupM recently delivered their assessment of the current advertising climate (see full statement here). In the same spirit, we feel it is our responsibility as your partner to offer guidance and analysis on what this means for your advertising spend and return. 

The Current Advertising Landscape

Due to supply chain disruptions in China and across the globe, there’s a good chance advertising spend will fall in the near-term due to a lack of available product inventory. This should not impact all forms of advertising equally; we anticipate outdoor advertising, as well as sponsorships, to suffer more since consumers will avoid public places. Branding budgets, regardless of ad channel, can be expected to drop. And while it may result in lower budgets for paid digital media, we do not anticipate the impact there to be as severe due to its direct-response nature. Advertisers will want assurances that their ad spend will result in a measurable return.

We anticipate traditional television, Connected TV, and digital channels to weather the storm better than others. Media consumption hours can be expected to increase since consumers will seek out entertainment and information through digital means, while other mediums will see a decrease. In a recent WARC opinion piece, they cited travel and large-gathering restrictions as an indicator that non-digital channels will see greater negative effects.

“Cinema is susceptible to lower audiences, and the out-of-home market conceivably suffers from lower reach – particularly in transport locations. Radio, core to the commute, is also left somewhat exposed.

Conversely, an increase in self-isolation leads to an uptick in TV consumption, as has already been observed in China – in some cases 50% above the daily average. Consumption of AVOD services and other online video also rises, most notably among younger audiences. Over two-thirds (70%) of the Chinese respondents to Wavemaker’s survey said they are watching more TV and video content than before – four-fifths (83%) are reading more news.”

We can look at media consumption in China during this crisis for clues as to how it will play out in the rest of the world. There’s little doubt many will take this as an opportunity to binge their favorite shows across streaming services, or spend more time browsing the internet at home.

Considerations Moving Forward

As developments unfold, you may find you need to make critical decisions about your media spend. Taking the current advertising landscape into account, you may need to prioritize high-impact channels over brand marketing campaigns. We endorse this approach, and advise increased spend on Connected TV advertising given the expected rise in in-home media consumption. 

Connected TV is programmatic in nature, allowing you to increase spend on that channel instantly as opposed to linear TV which requires much longer lead times to go live. We also recommend Connected TV due to its accountability as a performance marketing channel. We believe a focus on performance marketing channels will benefit advertisers going forward – not just across Connected TV but also across web and mobile.

Let’s Connect and Build a Plan

Our Customer Success teams have been working closely with all of our advertiser and agency customers to advise them on the best way to allocate budget given the current climate around COVID-19. We highly recommend our clients partner with our teams to understand how every vertical in our portfolio has approached the topic, and how we’ve approached the insertion or re-allocation of budgeted investment into Connected TV or other digital channels. 

Please don’t hesitate to reach out to your client success manager so we can work with you to help craft an ad strategy that will maximize your budget’s effectiveness, and ensure your campaigns are prepared for the current global situation.