COVID-19 has completely taken over the news headlines, and it is an important time for brands to be conscious of where their media is being deployed, and what the impact will be on their businesses. There’s been a variety of events, from financial to travel to health, that have affected media planning in the past, as well as creating pockets of opportunity.
WARC published an article recently that outlines three scenarios for the impact on media planning. A few key pick-outs are below:
Consumers are most likely to cut back on luxuries, entertainment and activities
- Out of home activities will be decreasing as cinemas are closed and with people now staying at home, potentially impacting OOH advertising.
- Retail environments are also likely to take a hit, as people are stocking up on essentials, there will be fewer shopping trips. During the SARS periods shopping for non-essentials reduced significantly in Taiwan by 44%, China by 38% and Hong Kong 30%.
- However, consumer spend moved online for these countries, and actually in a recent survey, consumers did not hold back on spending in light of COVID-19, apart from for travel.
Scenario planning in response to COVID-19
WARC indicate that there are three scenarios:
- Spend is displaced but full-year growth is largely unaffected: This could impact pricing and availability in the latter half of the year.
- Spend is reallocated significantly as brands focus on the short-term: Self-isolation is impacting more ‘brand-led’ media such as out of home (OOH), cinema and radio. However, according to BARB, we are already seeing an increase in TV impacts and consumption. Additionally, social media and messaging activity is also increasing as people aim to keep in touch with family and friends whilst social distancing.
- Severe disruption heightens the potential of an advertising recession: Global shares have taken a significant hit, with the last week of February seeing the worst week of performance since the 2008 financial crisis. WARC indicates that Facebook and Amazon stand to gain from the focus on the short-term, but these also rely on small and medium-sized businesses who are most vulnerable. There’s also the postponement of UEFA Euro 2020 and the potential cancellation of this year’s summer Olympic Games.
All Response Media viewpoint
Brands are adopting a very cautious approach to committing budgets for Q2 2020. We are already seeing this impact with ITV announcing their ad revenue forecasts down 10% in April due to travel brands (‘Last chance to book’ campaigns and Flybe’s collapse) delaying their advertising. In addition, the release date of the new James Bond film ‘No Time to Die’ has been pushed back to November.
This potentially poses an opportunity in reduced media pricing. However, increased availability means we’ll need to ensure control over our schedules and not ‘filling spots’ leading to significant over-deliveries. We also need to be aware of news spots and search terms, creating negative terms and removing association around negative press. Brands on news stations are also likely to have their spots removed as breaks are removed and reduced to focus on immediate updates.
The scenario of quarantine and the government instruction to ‘stay at home’ has led to an increase in TV impacts and an increased reach for daytime advertising, reflecting audiences we see during the post-Christmas period. In addition, online shopping is already rising significantly, which bodes well for response rates. Brands that have a longer consideration or conversion process should not be adversely impacted, and there could be a positive impact on engagement rates. Although, this does depend on the category. Travel brands are being negatively affected with booking intent declining and holding back. Sectors that are helping to combat financial issues should see growth during this period, such as insurance and home pharmacy.
With a focus on immediate response, we’ll be able to see the impact on site and conversion and can react immediately to any posed risk on return, even on TV where we can pull airtime 3 working days in advance. Although there are many negative headlines, there are still advertising opportunities for TV and social.
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