Day after day we understand that we’re passing through something we have never seen before. COVID-19 crisis created tectonic shifts in every part of our lives, and business life took a major share of the hit.
Uncertainty is the greatest nemesis of business and as we’ve never seen a global emergency like Coronavirus crisis, most of the businesses had to take a moment to consider what’s going on. For most of them, it’s time to drop long term plans and live day by day.
Advertising plans for most of the companies have dramatically changed during this period. The first reaction of many advertisers was to pause their entire advertising spending. In the US, 24% of the advertisers paused all campaigns of theirs for Q1 and Q2 of 2020.
Short -Term Effects
COVID – 19 crisis’ short-term impacts included a massive one on the advertising industry. Digital ad spending dropped by 33% and traditional media is down by 39%. The Brands’ messaging strategies have also changed. During these sensitive times, brands are giving more social messages than product-related promotional messages.
Q3, Q4 and 2021
According to a survey by IAB, 46% of advertisers are adjusting their advertising plans for Q3 and Q4 of 2020. It’s really hard to forecast the impact of the Coronavirus crisis for Q3 and Q4, yet most of the advertisers think that the impact will be modest compared to Q1 and Q2.
For 2021 plans, uncertainty grows. 73% of advertisers think that COVID-19 crisis will still have an impact on 2021 plans, but probably most of them will be kept on hold until summer, to make concrete decisions.
Digital vs. Traditional Media
2020 was considered as an important year for traditional media because of Tokyo Olympic Games and UEFA 2020 Football Championship. These two major sports events are cancelled in addition to Formula1, NBA and national leagues. These cancellations will cost millions of dollars to traditional media.
Within traditional media, out of home advertising embraced the biggest impact. As most of the crowded public spaces in most of the cities will be almost empty for a while, it’s expected that out of home advertising spending will shrink by at least 50% for the upcoming months.
We Are Certain that We Are Uncertain
As mentioned above, it’s really hard to make predictions for the second half of 2020. While 67% of advertisers are still reconsidering their advertising spending strategies for the second half of the year, only 25% thereof is to stick to their original plan.
Consumer behavior is changing dramatically during this period and being able to make reactive short-term plans is more important than ever. Some will rise, some will fall. We’ll see…
