Advertising companies took a downturn as coronavirus bangs on ad spend

cnbc | April 16, 2020

At a Glance:
  • As the impact of the coronavirus pandemic hits businesses and their ad spends, advertising holding companies are preparing for a drop in demand and some are telling their employees to expect staff cuts and furloughs.

  • The advertising industry is bracing for a wider impact of any economic fallout on client spending since marketing is often one of the first items that businesses cut during a financial downturn.

  • Omnicom Group CEO John Wren wrote in an email to staffers Tuesday that the company’s response will include furloughs and staff reductions across many of its agencies.


As the impact of the coronavirus pandemic hits businesses and their ad spends, advertising holding companies are preparing for a drop in demand, and some are telling their employees to expect staff cuts and furloughs.
 

The advertising industry is bracing for the wider impact of any economic fallout on client spending since marketing is often one of the first items that businesses cut during a financial downturn. Some brand advertisers have said they’ve already dramatically reduced spending.


Learn more: Olive Garden’s parent beats on earnings but pulls outlook and dividend, draws down credit line


In an internal weekly email to employees Tuesday that was viewed by CNBC, Omnicom Group CEO John Wren wrote that the pandemic has had an impact on the economy, clients’ businesses, “and in turn, on ours.” He wrote that the company has solidified internal measures to meet the changing needs of its clients. The holding company operates agencies across the advertising world, including BBDO, DDB, and TBWA.


“Regrettably, this will include furloughs and staff reductions across many of our agencies,” Wren wrote. “We are doing everything we can to limit staff reductions, and to take care of those who are affected.”


A spokeswoman for Omnicom Group declined to comment further on the memo.


Wren said agencies will use furloughs rather than permanent reduction “so we can bring people back if, and when, conditions improve and client demand recovers.” He wrote that agencies will also participate in government subsidy programs to reduce the reductions of permanent staff.
 

Wren also wrote that the company will move people into areas of business that are growing, like Omnicom Health Group. He said the company’s executive leadership team is reducing salaries by a third, while Wren is waiving 100% of his salary through the end of September. The company “with few exceptions” has stopped new hires, frozen salaries and has reduced freelancers. It also suspended its share repurchase program.


Publicis Groupe, which reported its first-quarter earnings Monday, said it was implementing a 500 million euro ($550 million) cost-reduction plan with “full impact in 2020, to adapt and be recovery ready.” Its management team members are taking cuts to their compensation as well.


“There is no doubt that we are going through an unprecedented health crisis that will lead us to the greatest recession in living memory,” the company said in a statement. “It is too early to predict the full impact it will have on our clients and our business, so we will not provide any guidance.”


Learn more: how advertisers can be more innovative during trying times


Other holding companies in recent weeks have told employees and investors to expect a hit to their business. Another major holding company, Interpublic Group of Cos. withdrew its financial performance targets for full-year 2020 amid the increasing spread of COVID-19. Adweek reported over the weekend that IPG CEO Michael Roth had sent out a memo telling employees about reductions in staff, salary cuts, furloughs and other cuts in spending.


In late March, WPP, the world’s largest advertising group, pulled its dividend and share buyback and withdrew guidance for 2020 after clients canceled marketing booked with the company due to the coronavirus. Dentsu Aegis Network, another ad group, said it is also doing cost-saving measures, including salary cuts with executives taking higher reductions. A company spokesman told CNBC that the company has also used furloughs.

Spotlight

Programmatic advertising is a revolutionary way to reach the right people with your ads. Programmatic display advertising consists of digital ads strategically placed on top websites to target specific audiences. Reach your audience wherever they are with unprecedented efficiency. This allows for efficient and effective targeting, as well as real-time bidding and optimized ad placement. Programmatic display has revolutionized the way businesses reach customers, offering a cost-effective and data-driven solution. Awarity's programmatic advertising platform makes it easy to manage campaigns, optimize results, and measure the effectiveness of your ads. Get ready to maximize your reach with programmatic advertising and Awarity!

Spotlight

Programmatic advertising is a revolutionary way to reach the right people with your ads. Programmatic display advertising consists of digital ads strategically placed on top websites to target specific audiences. Reach your audience wherever they are with unprecedented efficiency. This allows for efficient and effective targeting, as well as real-time bidding and optimized ad placement. Programmatic display has revolutionized the way businesses reach customers, offering a cost-effective and data-driven solution. Awarity's programmatic advertising platform makes it easy to manage campaigns, optimize results, and measure the effectiveness of your ads. Get ready to maximize your reach with programmatic advertising and Awarity!

Related News

AD NETWORKS

TapClicks and Choozle Deliver Unified Advertising, Workflow, and Analytics and Reporting Platform

CMSWire | April 05, 2023

TapClicks, the leading provider of unified marketing operations, analytics and reporting solutions for media companies, digital marketing agencies, and brands, today announced a partnership with Choozle, an omnichannel digital advertising platform and consultative partner to agencies and brands. This collaboration integrates Choozle’s proprietary platform, which connects modern marketers with the very best advertising technology in the ever-changing world of programmatic advertising, with TapClicks’ Smart Marketing Cloud, a unified marketing operations platform including automated data acquisition, data warehousing, order management, analytics and intelligence, reporting, and marketing workflow management. With Choozle’s adoption of the full, end-to-end TapClicks marketing operations platform, mutual clients can now manage their digital advertising media more seamlessly and effectively, with ease and confidence. This allows Choozle to scale and expand their omnichannel advertising solutions, and is a key differentiator.Agencies and brand marketers benefit from making their advertising budgets go further, with better return on advertising spend (ROAS), and more comprehensive service offerings for campaign management. “By adopting TapClicks’ unified, end-to-end marketing operations platform, we have enhanced our programmatic digital advertising strategy,” said Adam Woods, CEO of Choozle. “This accelerates scaling of our delivery and service offering. It better serves end-advertisers with more cost effective, higher quality services, drives better advertising outcomes, and further simplifies the buying process for our client agencies and marketers across multiple platforms.” ”One of TapClicks’ core strategies for a decade has been to invest in strategic partnerships with industry leaders,” said Babak Hedayati, CEO and Founder of TapClicks. "Our partnership with Choozle is a great example of how companies deliver value to their customers by delivering a seamless operations stack for increased revenue and dramatically improved efficiency." Choozle has been a TapClicks client for several years, and this collaboration further extends the effective partnership, enhancing both parties’ offerings for immediate impact. This integration was driven by client request, and is available now. Mutual clients agree:Andy Miller, CEO of M2 The Agency, commented, “Both the TapClicks unified marketing operations platform, and the Choozle omnichannel digital advertising platform, have accelerated our success. We are delighted to benefit from this new collaboration.” About Choozle Choozle is an omnichannel digital advertising platform and consultative partner that helps advertisers and agencies navigate the complexities of the digital media landscape. Choozle leverages detailed consumer data to power programmatic advertising campaigns for an omnichannel world – all from a single, intuitive interface. The company combines multiple digital advertising tools, a demand-side platform, data management platform, and smart tag management into a single platform with human media optimization expertise to engage audiences no matter where they are. For more information visit http://choozle.com. About TapClicks TapClicks, Inc. is the leading provider of unified marketing operations, analytics and reporting solutions for digital marketing. For more information, visit www.tapclicks.com.

Read More

ADVERTISER PLATFORMS

Audacy Integrates Veritone Attribute to Enhance Campaign Metrics

Veritone | March 03, 2023

On March 2, 2023, Veritone, a company that develops AI software and services through its aiWARE™ platform, has revealed that Audacy, a prominent multi-platform audio content and entertainment firm, is now utilizing Veritone Attribute to advance its data and analytics reporting for advertising clients. In addition, Audacy, already a user of Veritone's AI applications, has expanded its usage by incorporating Veritone Attribute. By incorporating Veritone Attribute, Audacy aims to enhance its capability to demonstrate the effectiveness of its broadcast ad campaigns. It plans to achieve this by providing advertisers with valuable directional insights regarding the performance of their campaigns across a wide range of Audacy radio brands. With this enhanced data, advertisers can make more informed decisions about their campaigns and compare their performance on Audacy stations to other advertising mediums. In addition, research has shown that attribution reporting helps increase advertiser spending and reduces the frequency of canceled ad campaigns, making it a valuable tool for evaluating campaign performance. Veritone Attribute is a tool that enables advertisers to analyze the relationship between their broadcast ad exposure and website traffic. By providing insights on creative, daypart, day of the week, and station, the tool helps advertisers optimize their campaigns to achieve better results. In conjunction with other Veritone aiWARE applications, Veritone Attribute also allows Audacy to measure post-exposure actions taken by listeners, including those resulting from sponsorships, billboards, live mentions, promotional commercials, and other in-content integrations. About Veritone Veritone is a prominent provider of enterprise artificial intelligence (AI) solutions that serve organizations operating in regulated and commercial sectors. Its software, services, and industry applications streamline data management, empowering some of the most renowned brands globally to function more efficiently, expedite decision-making and boost profitability. Its aiWARE™ is a market-leading enterprise AI platform that seamlessly integrates machine learning models to convert audio, video, and other data sources into practical intelligence. In addition to its extensive partner ecosystem, Veritone's professional and managed services help to develop and construct AI solutions that resolve current and future problems.

Read More

AD TECH AND MARTECH

MonetizeMore Announces acquisition of Advanced Ads

MonetizeMore | March 06, 2023

MonetizeMore, a company that partners with web publishers and app developers for ad monetization, has acquired Advanced Ads, an ad tech platform. Advanced Ads is a popular WordPress plugin for ad management with over 1,300 votes on WordPress.org and a 4.9-star rating. MonetizeMore's acquisition of Advanced Ads comes after being listed for three consecutive years on The Globe and Mail's ranking of Canada's Top Growing Companies. MonetizeMore can enhance its ad optimization solutions by acquiring Advanced Ads features, including flexible ad injection and user/page content-based targeting. Incorporating these features will bolster MonetizeMore's existing publisher offering without the need for coding skills. The acquisition will be implemented immediately, and the two platforms will be integrated shortly. In addition, the company plans to provide continued support to the existing clients of Advanced Ads while introducing them to MonetizeMore's platform, PubGuru, powered by artificial intelligence and other tools. About MonetizeMore MonetizeMore is a technology company that specializes in programmatic advertising. It offers various services, including ad optimization, ad inventory management, and ad revenue maximization, which help publishers generate more revenue from their online advertising efforts. MonetizeMore leverages advanced technologies like machine learning and artificial intelligence to provide its clients with personalized solutions tailored to their unique needs. In addition, their team of experts works closely with publishers to analyze their ad performance data and identify areas for improvement. MonetizeMore's goal is to help publishers increase their ad revenue and achieve long-term success in the ever-changing world of online advertising.

Read More