After a tumultuous year, how was offline ad spend affected?
As we lurched from an initial lockdown in March, to panic cancelling of carefully crafted media campaigns across April and May, to a cautious re-opening in the summer, to further lockdowns as the second wave hit us, the ad market in the UK has never seen such turmoil. But what is clear is that not every channel suffered in the same way, or as in the case with radio, bounced back as strongly.
Now that the full year’s figures are in, it’s much easier to see how and where spend was impacted and what that meant for those media channels, both for trading but also for audiences.
As expected, April and May took the biggest hits. With so much uncertainty, campaigns were moved or cancelled as quickly as possible and it took until the summer for some growth to be seen creeping back in. By Q4, despite another lockdown in November, the growth and confidence in advertising managed to overcome any potential negativity. With clients more confident and battle-hardened in how to cope with the new normal, together with a shift in how they traded, it allowed them to continue to chase an audience still hungry to buy.
Given the nature of TV, campaign budgets tend to be deferred, or delayed, rather than just cancelled, so it’s not surprising that by Q4 much of this money came back into the market. However, after that first drop, there has been an almost consistent growth across the rest of the year.
Initially, much of this growth was driven by the huge discounts being offered by sales houses, made all the more enticing by the fact so many people were now stuck at home. However, as things started to stabilise, by Q3 we were seeing a growth in the brand count, but with a lower average spend.
This is likely because these changes were allowing smaller advertisers to extend their TV activity or even allow new advertisers to test the market for the first time.
Unlike TV, where audiences suddenly shot up, press was disproportionately affected in the other direction. People were being told to stay at home, shops were shut and there was no travel anywhere, so all those commuters were looking for news elsewhere. As such, it’s no surprise that ad revenues crashed by almost 50%, along with their circulations.
However, unlike TV, as things settled back to some normality their ad revenues failed to see the same bounce back. Part of this could be down to the fact that circulations didn’t really get back to pre-lockdown levels, they are still around 15% down across national newspapers, although adjusted for typical annual decreases this is more like 5%.
But it’s undoubtedly because new TV testing will have used up much of those budgets that previously would have gone into press. How things look in 2021 as prices and viewing get back to normal remains to be seen.
The star of the show though is radio. Following the initial drops, this channel saw a dramatic uptick in spending, with August showing year-on-year (YoY) growth, which was maintained throughout the rest of Q4 and leaving December 25% up YoY, the only channel to finish so strongly. With radio’s low cost per thousands (CPTs), plus its ability to activate a campaign so quickly, meant we saw a lot of short-term campaigns being delivered across this period. As time went by, we also saw individual campaign spends start to grow, up over 40% compared to Q1.
All Response Media viewpoint
From a trading point of view, 2020 posed some challenges and some great opportunities for clients. With the initial volatility in the TV market, we helped many clients to successfully test TV for the first time. Radio too proved a responsive channel and the mix of advantageous pricing and availability allowed this channel to be an area our clients could trial more easily. With the challenges facing press, premium space was going for way less than premium prices, allowing clients to make major changes to their schedules, such as exploiting the lack of advertisers on anniversary sites to take these over, securing their availability for us over the next year.
The opportunities going forwards for using these core offline channels is even more apparent now following the recent YouGov research into Advertising Trust.
With TV, radio and press being first, second and third when it comes to trust in advertising, being able to generate advantageous deals with these areas goes a long way to us providing our clients that ‘unfair competitive advantage’. Something we are very proud of.
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For more information on the Press services we offer, click here.
For more information on the Radio services we offer, click here.