Travel has been one of the hardest hit sectors in recent years with the Covid-19 pandemic grounding...
Why digital is so resilient in tough times
As the lockdown eases, advertisers who went dark during Q2 are beginning to return, but what does the future hold? Is there pent up demand? Will those who shifted budgets to digital return to linear media?
There’s no doubt Q2 will be one to remember – pretty much every media owner dependent on advertising took a big hit. The New York Times revealed a 55% drop in ad revenue in May. The Advertising Association is forecasting a 16.7% decline in UK adspend year on year. IPG’s MAGNA predicts that print, radio and OOH will see 20-30% declines in 2020.
Linear media falls worse than the financial crisis
UK Print media is likely to suffer the most according to MAGNA (-28%) – physical newspaper sales were already in freefall and some freesheets are in trouble as there’s still an absence of commuters to pick up their product.
There’s a similar storm brewing for OOH. This week (25th June) – CityMapper’s CMI index shows only 26% of London moving compared to a usual week. Whilst out-of-home is expected to recover over the next few months, it’s unlikely to return to pre-lockdown levels while many companies continue to work from home.
TV has been popular with smaller advertisers during lockdown as costs have tumbled. One of the great ironies for commercial TV was that that while they achieved record audiences, those who wanted to advertise were thin on the ground. MAGNA expects TV to decline 17% YOY, but a strong Q4 could recover some loses.
Resilient Digital
And so, to digital. The good news for those of us working in online advertising is that most forecasters see the sector as by far the most resilient. IAB Europe recently reported that:
“…digital is looking to be the least affected advertising media, predicting a decline by -5.5% in 2020 in Europe compared to a stronger contraction (-21.3%) for other media.”
From a UK perspective, MAGNA have been even more bullish, predicting only a 3% contraction in UK digital ad sales due to the speed of execution – campaigns that were dialled down, can be dialled up just a quickly – and partly due the growth in ecommerce during the lockdown.
It’s certainly noticeable that FMCG brands who traditionally sold only through retailers have created online DTC channels. Want some Ben & Jerry’s? Go to their website as they now deliver to your door!
Sponsored Content formats
The reoccurring theme we’ve heard from our clients during lockdown is that there’s a great deal more to communicate post-Covid. From the new way brands are having to conduct business, to how they plan to help their customers navigate these unusual times, long form content can help guide consumers. As the UK unlocks, communication will be the key to successful business, and that communication is likely to be online.