Advertising demand fell 35% year-over-year in April, marking its lowest point since MediaPost and Standard Media Index began benchmarking the U.S. ad marketplace in 2012. Sequentially, total value of the U.S. Ad Market Tracker -- an index representing total volume of advertising buys made in the U.S. -- fell 30% from March, and 35% from February, which was the last "normal" month of U.S. ad demand prior to the effects of the COVID-19 pandemic on ad spending.
April, which normally is one of the stronger ad demand months of the year, turned in the lowest index value since July 2015's 165, which normally is the weakest month of the year in terms of advertising demand. Demand faltered more among smaller ad categories than the biggest ones. While the ad market index for the top 10 ad categories declined 32% to April from the last normal period in February, while all other categories declined 39% during the same period -- falling to an index of 115, it is lowest ever since we have been tracking it.
Moreover, the advertising business has been upended by the coronavirus, along with other sectors of the global economy. Advertisers have hit the breaks in spending as sales plummet, audiences for live sports have fallen, and layoffs rip through media and advertising agencies. JPMorgan Chase analysts said the largest and most heavily leveraged companies, like WPP and Publicis, and those most exposed in Asia, like Dentsu, are most at risk from advertisers cutting spending, while IPG could fare better because of its data and healthcare business.
Live events have been particularly devastated by the coronavirus as in-person gatherings have been canceled to prevent the spread of the pandemic, leading events-dependent businesses like The Atlantic to lay off staff and others to shift to virtual events. The cancelation of big sporting events is a headache for TV networks who are betting big on live sports for ad revenue and advertisers who have to find those audiences elsewhere. According to ad-buying agency Magna Global, the networks that were planned to air live sports will take a drastic viewership hit.
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