Advertising budgets have always been affected by many elements throughout the year, including seasonal changes, holidays, regional elections, the Super Bowl, and other events. In the last few weeks, there has been an abnormal impact on the advertising ecosystem, the likes of which we haven't seen for years.
As you might expect, the whole tourism vertical is down. It’s a tough time for hotels, airlines, booking apps, and travel sites. We are also seeing a downward trend in ad spend for other categories including real estate and lifestyle. For obvious reasons, people are not booking trips or thinking about moving at this time.
We’ve seen a decrease in ad spend from sports but, interestingly, there’s been an increase in traffic to sports-related content. More on that later.
Online ordering has increased as supermarkets and restaurants are changing the way they operate as people are isolating themselves. We’re also seeing an increase in technology and education ads across the internet.
Other categories that are increasing ad spend are pharmacy, hygiene, mental care, all related to the current virus spread.
“You’re stuck at home. Have a beer!” That may not be the exact wording you’re hearing on ads, but it’s close. Many beer companies have increased their ad spend. The same goes for nearly anything food related.
Companies in other categories that use their ad dollars for “buy now” offers are slowing or changing their messaging. They are focusing more on home delivery or reassuring branding messages to customers to position themselves for the coming recovery. Unless companies are forced to cut back spending because of immediate financial concerns, it’s a smart move to stay consistent or increase marketing in a crisis or economic downturn.
We haven’t seen anything like this in our lifetimes. While we’re dealing with the health concerns daily, we are also beginning to better understand the economic impact this is having on individuals and businesses. As a reference point, we can look at previous economic downturns as evidence of what happens when advertisers cut back spending. Examining results from dozens of studies from each of the past 10 decades has demonstrated a consistent theme: companies that continued to advertise, or increase advertising dollars during tough times, significantly grew their market share during the crisis. Companies that remain aggressive with their advertising budgets during economic crises reported sales 2.5X the average of all other businesses and maintained their enhanced market share for at least three years afterward.
News and business traffic are breaking records. Verizon, one of the world’s largest mobile carriers, saw traffic spike 20% in just the first few weeks of the coronavirus reporting. Traffic jumped another 30% when Italy went into lockdown and another 8-10% when cases started to proliferate in South Korea and the United States.
Users are spending more time consuming content, specifically video content. We’ve been seeing an increase in video content duration, which has been particularly noticeable in mobile web and tablets. Ad spend on mobile web is rising accordingly.
We’ve seen the biggest jump in video consumption in the children’s vertical as schools close and kids are forced to stay at home. Parents looking for content to both educate and entertain home-bound children is exploding. There is a great opportunity to advertise to them with appropriate subject matter that is relevant and works within the legal framework for content aimed at children.
Other verticals seeing increased consumption are gaming sites and sports. The increase in consumption for sports websites is particularly counter-intuitive considering that all major sport leagues and events have been canceled.
Focus on Quality
There is actually more competition on quality inventory as buyers are becoming pickier in choosing which impressions to buy. Sites with prominent placements, high viewability, and completion rates are actually seeing increased demand from advertisers.
For publishers, it’s a smart move to create more video advertising inventory to meet this demand. There are also steps publishers should implement right now to optimize viewability for increased monetization.
The global pandemic is changing constantly, and people are looking to stay informed on an hourly basis. With people feeling isolated, video consumption is at all-time high levels.
Many advertisers are adapting by changing their ad creatives and messaging to better fit the time, situation and needs of their customers. Nike just did it with “Play inside, play for the world”, endorsing a clear message promoting the public’s wellbeing, and doing it in an authentic manner.
It’s important that you keep up to date with the changes. While you don’t want to position yourself as trying to profit off of the crisis, you do want to look for the right ways to serve visitors, advertisers, and customers better as their needs evolve.
In every crisis, we need to adapt, stay open-minded, and be vigilant to seek high-quality information as things evolve. If we can help, let us know.