As the world is gripped by a deadly pandemic, various sectors are on the verge of disruption. The media buying industry is especially worried, as ad spend is expected to fall in multifarious sectors, across industries.
Analysts hailing from diverse sectors have predicted a decline in ad revenue for Google and Facebook – especially when it comes to the travel industry, which has been affected the most due to precautionary and quarantine measures, as a result of the Coronavirus. This has prompted media buying agencies to re-evaluate and re-analyze their advertising strategies.
Rob Anderson of Loop Capital Markets has predicted a 15% YoY drop for Google in terms of travel ad revenue, with an additional drop of 20% in the second quarter. Moreover, Needham analysts have posited evidence of severe decline in Facebook revenue and earnings due to truncated consumer demands and ad projections. This will also impact the retail, consumer packaged goods, and entertainment industries which constitute almost 45% of Facebook’s total revenue!
This has caused obvious concerns in the minds of media planning and buying agencies, causing them to drastically alter their ad strategies. What do these concerns comprise of?
Tug of War | Supply Chain and Demand
Advertising spends are starting to feel the effects of supply chain impact – clients, especially those with productions in China, have expressed concern over inventory while expecting run ads based on current stock. Experts opine that as it is expected that key/OG products will go out of stock, Google Search and Shopping budgets has been automatically slashed by 40% in parts of the UK and Europe.
On the other hand, some businesses have permanently halted their digital ad budgets. Numerous digital agencies have reported paused client sendings in the event of the Coronavirus, wherein event and hospitality industries have been impacted the most.
The Anxiety of Uncertainty
Anxiety, especially in the midst of a pandemic, is deeply entrenched in feelings of uncertainty. And rightly so, as trends that are emerging out of this situation are unpredictable and seemingly random. For instance, Amazin revenue for a certain agency had pummeled, yet not consistently enough for it to become a trend or pattern. So yes, there is hope – hope that prospecting campaigns can be salvaged through ad-hoc management of budget management and analysis. Whether these endeavours shall be fruitful – only time will tell.
Most digital agencies, especially those based in India, haven’t experienced client cold-feet (as of yet). However, anxieties soar: clients hailing from sectors that are relatively unaffected, such as e-commerce brands, are not facing major issues so far, but are ready to pull back spend the moment things take the turn for the worse.
Re-instating the Status Quo
Despite the bleak scenario, budget-cuts are not the only answer that is resonating. Now, exhibitors are looking at numerous other ways to satiate their sales pipelines. For instance, the event industry insists that the show must go on – hence, there has been a shift to virtual events, which are as lucrative, if not more, than real events. Despite obstacles, companies are focusing on aggressive expansion and growth plans, and increasing search budgets to combat the downturn.
WARC projects an annual increment of 7.1% in global media spend this year. This prediction hinges on the expectation that companies will simply resort to shifting budgets to the latter part of the year. This implies that advertisers will still feel pretty constricted long after the Coronavirus fades. Can an innovative, yet humane strategy change the way things look?
In conclusion, we at Digidarts, understand the surmounting importance of maintaining and leveraging search and digital ad budgets, and the anxieties that are evoked due to the global pandemic. However, health and wellbeing are paramount, and nothing can replace the sanctity of human existence – we hope that all of us can conquer and emerge stronger from these trying times. Till then, stay safe, and practice good hygiene and precautionary habits.