How COVID-19 has Impacted the Advertising Industry
COVID-19 has driven significant changes across many different industries this year, and the advertising industry is no exception.
Overall, ad buyers expect 2020 ad spend to decline 20% from last year due to COVID’s economic impact. Although the pandemic is expected to have a larger effect on the industry than the 2008 financial crisis which caused ad spending to decrease, there may be some positive shifts after recovery.
Executive Vice President of Comedy Central, Josh Line, argues that “advertising will be better and more valuable in the hearts and minds of consumers—and, as a result, more effective.” Because many consumers don’t want to be interrupted by an ad that isn’t good or relevant, it will force the advertising industry to do better.
This digital disruption has caused many agencies to pivot and adjust their messaging. More than 90% of respondents to a new ANA survey indicated that they had adjusted their creative marketing messaging since mid-March when COVID-19 was declared a pandemic by the World Health Organization. Since then, messaging has been refocused to speak to the empathy of what communities are facing and instead shows how companies want to help. 45% of survey participants agree that they want to be inspired by brands so they can be hopeful about the future, which will inspire them to spend money with these brands post-pandemic.
With much more free time, most consumers have been a little more adventurous with their spending. Many Americans seem to have an increased interest in the great outdoors. Recent data from Comscore shows that weekly visits to Sports & Outdoor retail sites saw 71% YOY growth in April and 86% YOY growth in May. In good news for advertising professionals, a recent survey showed that consumers are still shopping and that advertising is still driving some purchase decisions. US consumers surveyed report they have made an impulse buy based on an ad since the start of the pandemic. During the pandemic, 53% of American consumers report purchasing brands they would not typically purchase pre-pandemic.
Surveys show that consumers aren’t the only ones being a little adventurous. Marketers have also used this time to try new marketing technology and features, with 56% investing in technologies such as site/mobile chat, 55% in mobile app functionality, 51% in email, and 50% in video.
B2B companies are also figuring out how to stay in business, operate, and recover. Many B2Bs have required a digital transformation of marketing and sales efforts. Like most industries, the impact differs significantly by sector. 66% of B2Bs from the tourism and hospitality category said they saw substantial disturbance to their business. Although tourism and hospitality have been impacted the most, other hard-hit B2B segments include personal services (60%), education (52%), wholesale (46%), and manufacturing (46%).
This is just an overview of some of the key trends and changes we’ve seen happening across the advertising world. Keep reading our blog for more content on what’s happening across the industry, as well as tips and best practices for maximizing the operational efficiency and profitability of your agency.
The Advantage Agency Management System is the only true all-in-one solution purpose-built for agencies and creative teams of all sizes. The system covers everything from Project and Production Management, Finance and Accounting, Time and Expense Management and Media Planning and Buying.
We’ve been exclusively focused on helping our clients maximize productivity, efficiency and profitability for over 40 years, with almost a thousand agencies counting on us to help run their business every day.
With Advantage, you get a team of US-based agency veterans supporting you every step of the way. All implementation and training is done by experienced Advantage staff, and all clients have unlimited access to our live customer support line from 8am-7:30pm Eastern every business day.
Find out how Advantage can help you by contacting us for a complimentary demo or discussion about your unique needs.