Amid Chaos, COVID-19 Creates a Unique Opportunity for Brands
May 7, 2020By James Heller
Many marketers have pulled back their advertising in response to COVID-19. The buy-side is wise to adjust its spending, but halting marketing efforts entirely is bad for business, the economy and even consumers. Furthermore, advertisers are missing out on a buyer’s market, overlooking opportunities to secure competitive deals on future marketing campaigns.
More than three-quarters of buy-side decision-makers surveyed by IAB in late March believe COVID-19 will be worse than the 2008-2009 financial crisis. Seventy percent of responders had already made changes to their ad spending, and a quarter even stopped everything they could. In some cases, drastic revenue reductions have left companies no choice but to pull back on spending. In other cases, companies are reducing budgets as a precaution.
While the Myers Report predicts that the coronavirus could cause up to a $3 billion reduction in ad spending, that’s a small fraction of the estimated $227.8 billion U.S. advertisers were projected to spend this year. We will weather this crisis, and marketers should remember that advertising can play a positive role in the life of consumers during these tumultuous times.
That said, certain media will be hit harder than others. A mandated "shelter in place" doesn’t sound good in the short term for offline advertisers and industries, like out-of-home (OOH) and radio, which typically reach people on the go. While it makes sense to adjust advertising strategies, this may be the best time ever to purchase certain types of offline inventory and plan for future campaigns. Advertisers have more buying power than ever before, particularly when purchasing OOH. Buying ad inventory now can save marketers money and better position their brands for resurgence as folks get back outside of their homes.
Marketers can approach this by buying impressions and ad inventory to run in the future, once people are back in their normal routines. On the other hand, it’s worth noting the potential value of advertising amid the pandemic. This could be an opportunity to create meaningful consumer relationships in a time of uncertainty. Brands need to be mindful of the circumstances and avoid insensitive or tone deaf creative, but not every ad has to reference the pandemic directly. According to Kantar’s COVID-19 barometer, only 8 percent of people surveyed believe companies should stop advertising because of the pandemic. A similar study in the U.S. found that only 6 percent of respondents thought all brands should halt their marketing. People want reasons to think of something other than COVID-19. Ads can serve as a form of escape, entertainment and hope for these consumers.
It goes without saying that the coronavirus pandemic is tragic and scary, but this, too, shall pass. If the virus is contained in the coming months, many experts predict a rebound as early as H2 2020, and a banner holiday advertising season in markets around the world. We will make it out the other side, and brands have a unique opportunity right now to keep the business world going, while potentially receiving steep discounts for future campaigns.
James Heller is the CEO and co-founder of Wrapify.
The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.