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Article | April 7, 2020
It turns out that the digital advertising industry has two problems. The one you’ve probably heard more about is simply loss of budgets. With large segments of the U.S. economy basically shut down, there is little reason for airlines, hoteliers, casinos, retailers, auto makers, film studios, or restaurants to advertise at the same pace. And small businesses are more focused on meeting payroll and staying alive than on advertising and marketing. But there is a related and logical, if slightly less obvious issue, in particular in the digital advertising market: Ad rates are falling hard. It isn’t just that there are fewer ads—the remaining ones are generating less revenue.
Brands that continue to advertise through the coronavirus crisis will enjoy increased salience as consumers use media to occupy their time – and if you don’t, your competitor will. The most common question I’ve been asked by brands in the past two weeks is: “Should we continue to invest in advertising during the coronavirus outbreak, when so many people are isolated?” Marketing Week’s own figures show that many marketers are delaying their campaigns during this time. The truth is, none of us really knows the answer, but I can’t help but feel that for consumer brands this is the time to show that your brand matters. During times of uncertainty and hardship, we look for support, reassurance and even entertainment from brands we trust. It’s in uncertain times when we’ll need and remember you the most.
Even though the digital advertising landscape has been evolving exceptionally fast over the past decade, the pace is only getting faster in the next one. The global ad spend is on its sharp ascend, and the mobile ad market is flourishing on the verge of 5G worldwide adoption. Sound logos, podcast advertising, personalized ads in navigation apps all of these are the new digital advertising realities we’re already in, and tomorrow won’t be different. Consider this: reaching the target audience in the right context is easier if your story is palpable with no visuals. More importantly, engaging the audience, suffering from short attention spans on the go is faster with audio than ever before, especially the commuting and driving types.
With each passing day, the COVID-19 coronavirus outbreak is having a growing impact on the global economy. While some businesses are lucky enough to be getting a huge surge in sales, many are struggling to bring in revenue or must adhere to shelter-in-place orders requiring them to shut down production. In these situations, your first instinct will be to preserve all cash flow and stop all unnecessary spending. But is digital advertising unnecessary spend? I would argue it’s very necessary, even if at a reduced budget. Ecommerce in the sense of selling any service or product online is critical right now for our entire economy. And with more than 66% of the U.S. population under stay-at-home orders, according to CNN, there are a lot of people sitting at home ready to buy. It might not be at the same volume that brands are accustomed to, but there is still plenty of opportunity, even if your production has stopped.
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