As the US begins to head back to work and life, what can the media and advertising industry expect? We sat down with Rich Melin, Phase 3's Media Director, to get his thoughts on the current crisis and expected recovery.
What have you been reading and hearing about in the advertising industry during a crisis like this?
Recently, I had an opportunity to tap into the brain of someone whom I’ve respected and worked with for years. We first met when I was a young media planner working on travel industry brands and he was the publisher of one of the leading titles in the industry. Over the years, the two of us have seen economic ups and downs from the stock market crash in 1987, Y2k, 9/11 and the Great Recession.
Each time we didn’t know what the end game would be, but what we did know was that, at some point, we would emerge into some sort of new normal.
So, what will that new normal look like after COVID-19?
There are a few things we can surmise regardless of whether there is a rapid “V” shaped recovery or a slower one. For instance, in the travel industry, they are predicting a “meatloaf” recovery. It is expected that travelers will go to places that are familiar and safe and where they are comfortable – like the way one eats comfort food when one is nervous or stressed.
What are you currently seeing in the media industry?
Currently, we are seeing short-term spending reductions impacting all channels, including digital, with global ad spending down by $20 Billion according to eMarketer. While this was initially confined to China, the impact has spread as more industries are being affected. Both eMarketer and Acquio have produced research showing deep decreases in US ad spending, and eMarketer now predicts US TV advertising to drop 20% this year.
Publications that rely on bulk distribution – in retails shops, hotels, cruise lines and other places of business -- have temporarily stopped printing because they have no audience; while social media platforms including Facebook, Twitter, Yelp and Pinterest have all adjusted their 2020 projections downward according to the New York Times.
What do you expect to see in the coming months?
The good news is, we don’t expect this decrease in spending to last forever based on our previous experience. We know that after the Great Recession in 2008-09, advertisers ran away from investing in traditional channels, but ad spending in digital channels continued to grow. Similarly, Wordstream reports that PPC ad spending has begun to rebound after a significant decline, though that spending is shifting away from traditional search towards Display, YouTube and Shopping platforms.
If anything, we believe channels that experienced growth prior to the crisis will see an acceleration in spending – particularly in streaming services. With more people home now, streaming viewership has gone up 26% according to media intelligence provider, Conviva. Consequently, if you’re having success engaging your audience in this channel, it stands to reason that this would continue as the economy recovers.
According to Dallas Mavericks owner Mark Cuban, the one thing we do know is that,
"Wherever there is change and uncertainty, there is opportunity."
This is something that we in the marketing and media business have come to expect and embrace. In the post COVID-19 landscape, we will once again be ready to find the opportunity and meet the challenge.