1 APR 2020

HOW ADVERTISERS RESPOND TO CORONAVIRUS OUTBREAK?

Three-quarters of respondents to the survey conducted by the Interactive Advertising Bureau (IAB) believe the pandemic will have a worse effect on the industry than the Great Recession did. 48% of respondents reported changes to media and budgets, 49% reported postponing, and 5% stopped a campaign midway-through.

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After conducting a survey in late March 2020, the Interactive Advertising Bureau (IAB) has determined that 75% buy-side decision-makers think the coronavirus pandemic will have a worse effect on US ad budgets than The Great Recession in 2008-2009 did, a period during which total media ad declined for two years straight and digital spending dropped in absolute terms in 2009. 

49% of respondents reported postponing campaigns that were set to launch later this year, 48% changes media or shifting budgets, and 5% stopped a campaign midway through. They also reported possibly short changes made to their ad spending. 75% of them paused all advertising for the time being. Two-thirds have yet to determine whether to adjust budgets in H2. In late March, Advertiser Perceptions also surveyed the buyer side about plans to adjust or pause spending. Nine out of ten advertisers said they were obligated to take some sort of action.

Respondents are expecting the worst of outcomes after the passing of the outbreak, adding budgets to be concentrated in Q2, with the Q3 impact still bigger than in Q1.  By Q4, media buyers expect to be under more normal circumstances than they’ve experienced over the past couple of months. For now, the ad channels most likely to be impacted are display, social media, digital video, and linear broadcast tv. Paid search was the channel to most likely budget and receive money, even though only 24% of respondents said they were keeping money in search and 47% pulled it from the display. About two-thirds of respondents thought performance media would get more of a focus in the following months. Almost half mentioned their plans to decrease performance budgets between March and June. 42% plan to increase spending on mission-based marketing, 41% on cause-related marketing, and 37% on brand equity messaging.

For March and April, the IAB respondents expect the largest decrease of their ad spends to occur in traditional OOH, digital, OOH, and terrestrial radio as a result of people engaging less due to recommended or mandatory self-isolation periods. Significant drops in spending are also expected all across the board. Budget cuts, however, are expected to decrease across all these media by May and June. 

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