Reasons to keep investing in media during the COVID-19 Pandemic
19 May 2020
As the coronavirus crisis continues, companies are under increasing pressure to revise their media investments. But while it’s tempting to cut media budgets, this isn’t always the best decision, says Florian Thiebaut, Consulting Director at Artefact France
As the coronavirus crisis unfolds, companies are under constant pressure to revise their media investments. But while it’s tempting to cut media budgets, this isn’t always the best decision. In fact, this period has actually created a great opportunity for many brands to consolidate their market positioning — provided their invest in the right spaces, of course.
In this report, Florian Theibaut, Consulting Director at Artefact France, explains how the coronavirus crisis has become a transformative moment for business opportunities, how and why media costs and decreasing during these times, which e-business activities are overperforming and why, and where new opportunities are appearing for media awareness and conversion campaigns. The key takeaways from the report are summarised below.
Learnings from previous crises
Crisis aftermath: ad spend falls
Both the 2000 internet bubble and the 2008 financial crisis translated into a drop in ad spend. The same is happening today. Tight budgets make media spend highly strategic.
Developing crisis: some companies thrive
Understanding the strategic choices made by companies during previous crises is paramount. As some market leaders wane new players can arise: across industries, 14% of companies improve growth and margins during crises. Due to confinement, the current battlefield is e-commerce.
Outperformance in critical times
Historical precedents show brands gain market share by maintaining or growing their ad spend: Amazon sales increased by 28% in 2009. Similar strategies to tackle the coronavirus crisis make sense.
Decreasing media costs
The pandemic has increased media consumption, creating more available space. Meanwhile, advertisers are reducing media budgets. Costs have thus fallen. First movers will benefit from lower advertising prices and could increase their market share.
Worldwide internet traffic soars
With a boom in web traffic, e-business is now central to daily lives. Movements on transactions, page views and traffic are related to lockdown announcements.
- E-commerce websites: compared to 2006-2016, traffic is up by 20%. In major Western countries, growth of traffic (10% week-on-week) and the number of page views has been strong and steady;
- Transactions jump: 40% more than 2006-16 with great disparities between sectors. While mass retailing outperforms, this is not the case for tourism.
Multimedia consumption surges
- Device use: in March 2020, 70% of respondents worldwide were using mobile phones more as a direct result of COVID-19;
- Media consumption: an increase in online media consumption comes along with a boom in video (online + TV).
Ad spend declines
- Worldwide advertising spend is 2.85% less than last year (as of March 6th);
- US programmatic ad revenues: greater than average fall of 15% to 28%;
- Online ad price empirical observations: all EMEA Artefact campaigns (Jan. 6th / Apr. 20th) show a decrease in prices of online advertising.
Creating advertising campaign opportunities
Smart moves tackling the crisis and its aftermath are possible. Identifying format priorities and product categories selling the most is key. Some should favour conversion objectives whereas others should opt for awareness campaigns.
Conversion: limited to some industries
Conversion rate increases rapidly, concealing large disparities between sectors.
- E-Commerce trends: few industries go through the crisis with good e-business activity. Retail sites traffic, +219% since the beginning of the epidemic, now links the sector to necessity, not comfort;
- Outperforming product categories: for the fastest-growing, this crisis is a key moment to improve market share. Media campaigns should, therefore, be optimised on conversions.
Awareness: subjected to adapted messages
Companies need to adapt messages to connect: changing habits, ways of seeing things and anticipating the future need to be taken into account.
- Correlation optimism/spending anticipation: European countries most affected by COVID-19 are particularly dejected. Globally, most plan on months of changes to finances. Few countries, such as China or India, anticipate increased incomes. This is paramount to address optimists and pessimists in different ways;
- Awareness dos and don’ts: few consumers expect brands to stop advertising and an absence may delay its rebound. Attention depends on the chosen tone and topic: advertising should “talk about how the brand is helpful in the new everyday life”, and “not exploit coronavirus to promote [themselves]”.
Now is the time to invest
Current low digital media prices allow for strategic moves while history shows companies who run appropriate media plans during crises thrive.
If your company sells products from the fastest-growing categories, campaigns optimised towards conversions are a must: you may be able to attain your best ROI ever.
If you are part of an industry suffering from the crisis in terms of sales, consider running a campaign optimised towards awareness: results will materialise if your tone is chosen wisely.