Businesses Coping with COVID-19: Harmelin Media
These are unprecedented times. The COVID-19 pandemic is like nothing we have ever seen before: a crisis beyond our experience, with implications beyond anything we can predict. And while its impact on our lives is yet to be fully known, its impact on the economy, and advertising, is already being felt.
All forecasts point to a downturn in advertising in the coming months. In mid-March, the Myers Report predicted that the coronavirus could precipitate a $3 billion drop in advertising marketing budgets in 2020. Magna Global recently adjusted its 2020 advertising spend outlook down from its original projection of +6.6% growth in US ad sales to a -2.8% decline, citing an “unprecedented situation created by the Coronavirus outbreak and economic downturn.” This includes a predicted 13% decline in national TV ad sales. Additionally, in a survey by the IAB of media professionals (conducted 3/18-24), buyers and brands reported a 41% decrease in March/April ad spending in linear TV and a 35% planned decrease in May/June, with planned cuts in terrestrial radio (45% March/April, 35% May/June) and traditional OOH (51% March/April, 41% May/June) even deeper. According to this same survey, 74% of buy-side decision-makers think Coronavirus will have greater impact on US ad spend than the 2008-09 financial crisis and nearly a quarter (24%) of respondents had paused all advertising spend for the rest of Q1 and Q2 (IAB).
These numbers sound drastic, however it really is hard to argue them. After all, COVID-19 and the resulting social distancing has forced entire industries to fundamentally alter the way they operate. Brick and mortar retail and restaurants have been forced to subsist on a delivery model, travel and tourism has been largely grounded by travel restrictions and closures, auto dealerships in many states are limited to service only, and arts/entertainment venues have been largely shuttered. Advertising expenditure losses from the suspension of activity in sports alone have been huge. The NCAA tournament was cancelled, the NBA and NHL seasons are suspended (perhaps not to return this season), MLB is on hold, the Tokyo Olympics have been postponed to 2021, and who knows what lies ahead for 3Q and 4Q.