COVID-19 has caused a rapid, unprecedented impact to the Advertising industry, creating business continuity uncertainty driven by a dramatic shift in consumption. Response planning to the COVID-19 disruption will require a multi stage approach.
- As companies reduce discretionary expenses in response to COVID-19 pressures, Advertising spend could potentially drop significantly consistent with previous financial downturns. Nearly 70% of surveyed companies have already indicated adjustments in advertising spend
- Demand and marketing spend is projected to recover in late 2020 and throughout 2021. In the two recent financial downturns, advertising spend recovered slower than other sectors, taking 4 - 7 years to reach prior spend. Advertisers should, accordingly, prepare for sustained budgetary pressure
- Advertising spend of certain sectors is expected to be impacted more heavily by social distancing (e.g., Travel, Automotive, Entertainment, Health & Fitness, etc.), while advertising spend of other sectors is expected to be more resilient (e.g., Telco, OTT, Online Retail, etc.)
- Advertising spend is expected to be optimized across mediums, with digital mix increasing. Digital channels provide more flexibility and targeting on average than traditional channels, and are expected to be prioritized as uncertainty remains over recovery timing and pattern
- To manage through the downturn, advertisers will need to drive ROI with lower budgets and streamlined MarTech. Analytics will enable better targeting and ROI, while supporting agencies and partners will be held to higher levels of transparency