COVID-19 and the advertising industry: Top headlines
How adtech is responding to the coronavirus crisis.
COVID-19 has uprooted the advertising industry.
To help advertisers stay informed with the changes taking place, we are updating this blog post daily with the latest news about how coronavirus is affecting advertising.
Check back here for the latest stories on coronavirus and advertising and stay informed.
April 14th, 2020
Total cases worldwide reach 2,072,269. Total deaths 133,802.
How COVID-19 is affecting eCPM
eCPM in the United States are down by 6.31% as of April 17th, according to a study published by AdTech Insider. In the UK, the hit is bigger, with a 24% drop, while Germany remains the outlier, with impressions increasing in the previous month by 14%.
The study analyzed over 2 billion ad impressions in the last three and half months to understand how eCPM is varying from one month to another and in different geographies. eCPM are expected to continue to decline in the coming weeks.
Even Google and Facebook May Face an Ad Slump
Advertising revenue has dominated Facebook's and Google's growth in the past five years. But this growth may be about to dry up as the coronavirus pushes the world economy into a recession.
The hardest hit industries like travel and entertainment, which heavily on Google and Facebook ads, have slashed their online advertising budgets. Facebook ads are at historic lows and clicks on Google are going for several times cheaper than before.
Traditionally dubbed the 'duopoly', Facebook and Google have dominated the online advertising market for the better part of the last decade. Threats from Amazon and other smaller digital publishers have never managed to make as much of a dent in the digital advertising market as those two.
And yet, after the crisis is over, it is quite possible that Facebook and Google will be in a better position than before.
Twitter recently revised its revenue forecast for the quarter from 5%-10% to a decline. Pinterest has withdrew its revenue growth forecast of 30% for 2020 after it saw a steep decline in advertising in March.
In other words, smaller publishers are getting squeezed out of the market as companies rely on the channels that are most reliable: Google and Facebook.
Google and Facebook aren't through the woods yet though. Prices for Facebook Ads have declined by an average of 30%-50%. Analysts on Wall Street predict that both companies will see revenue decline by 20%.
Part of the reason for this is that major advertisers are pulling ad spend. Korean Air and Norwegian Cruise Line cut all of their digital ad spend in March.
Airbnb suspended all marketing as well, cutting back $800 million this year.
April 8th, 2020
Total cases worldwide have reached 1,353,361.
Companies are avoiding advertising next to coronavirus news
Coronavirus has overtaken 'Trump' as the keyword blocked by the most brands, posing a problem for digital news publishers who are churning out article after article about the pandemic.
The world's biggest brands are refusing to put their ads next to content about the pandemic, despite newspapers seeing a huge increase in readership.
As a result, news publishers are losing millions of dollars and have failed to capitalize on their new traffic.
The New York Times, for example, estimates it will lose 10% of its digital revenues in 2020 because brands are refusing to advertise on pages with coronavirus-related stories.
British newspapers could fail because of coronavirus ad-blocking
Advertisers continue to use keyword blocklists to stop their ads appearing next to stories about Covid-19.
As a result, news websites that are getting record traffic from readers are barely earning any money from the clicks.
British ministers have demanded that advertisers start placing their promotions next to online news stories about the coronavirus, amid enormous concern in government at the potential financial collapse of British news outlets.
News idustry lobby groups say outlets are missing out on as much as ÂŁ50m in revenue as a result of such blocklists, threatening their ability to continue employing journalists and producing news stories.
Don't use coronavirus for advertising - Ethics Council
Belgium's Advertising Council has urged advertisers not to play into the public's feelings of fear and uncertainty regarding the new coronavirus (COVID-19) after receiving several complaints from the public.
The council urged advertisers to "avoid irrelevant references to the coronavirus crisis in new advertising messaging."
The council also said to review planned campaigns to make sure they are appropriate under the new circumstances.
"A campaign that would not have been problematic under normal circumstances may now be perceived as inappropriate by the public,” the Council said.
April 7th, 2020
Total cases worldwide have reached 1,099,209.
Coronavirus deals severe blow to outdoor advertising groups
Companies in the outdoor advertising market are taking defensive measures as clients pull back spending.
Outdoor advertising, often dubbed the oldest form of marketing, is seen as a dull but reliable business because of its long history.
But with significant part of the world's population forced to stay at home, advertisers relying on this form of advertising have been hit hard.
To make matters worse, analysts at Macquarie Research estimate a fifth of global expenditure in outdoor advertising is generated by sectors like leisure and travel, which have been devestated by the coronavirus.
Overall, the $40 billion that was expected to be spent on ads in big cities and transport in 2020 will fall by at least 11%, but likely more. This was the amount the industry fell in the last mini-recession in 2019.
Major multinationals are postponing ad campaigns, slashing marketing budgets - report
The world’s largest advertisers are deferring planned ad campaigns and cutting budgets due to the coronavirus pandemic, according to the World Federation of Advertisers (WFA).
Around 81% of large advertisers are deferring ads, according to the WFA's new report, which surveyed its members that collectively spend $5.7 billion on media buys and marketing fees annually.
A total of 57% of those surveyed said they had decreased budgets greatly or somewhat due to the virus outbreak.
A total of 6% said the delay was indefinite, while 34% said they had done so for 1-2 months.
However, while large advertisers have postponed planned campaigns, more than half said they had launched new ad campaigns in response to the crisis, while 29% said they were planning to.
A total of 32% said they had not changed anything to their marketing plans.
April 3rd, 2020
Total cases worldwide have reached 830,832.
Google to release your location data to help fight coronavirus pandemic
Google is publicly releasing the data it's already collecting about people's movements during the coronavirus pandemic.
The company said it plans to publish a series of "Community Mobility Reports" to show the types of places people are visiting across 131 countries and regions. It hopes that tracking movement trends over time and by geography could help inform government and public health officials about the best ways to respond to the coronavirus epidemic.
April 2nd, 2020
Total cases worldwide have reached 751,288.
Google to begin lifting coronavirus ad ban
Google will begin to lift its ban on coronavirus-releated advertising after coming fire from Democrats who said it was encouraging misinformation from the White House.
In a statement, Google said it would allow "government entities, hospitals, medical providers and NGOs" to run ads related to the novel coronavirus on its platforms.
Nongovernmental advertisers have been barred from running ads about COVID-19 on its platform in order to contol misinformation spreading about the virus.
Google said it expects to implement the changes over the next few days.
March 31st, 2020
Total cases worldwide have reached 639,139.
The coronavirus pandemic will fundamentally change advertising
Business Insider makes the case that the coronavirus will completely change the way brands advertise as we know it. This is because people's habits are changing during the coronavirus crisis, and many of those habits will remain long after the virus subsides.
For example, more people are cutting back on needless purchases, focusing on the essentials needed for survival. People may question how much more outside of these minimalist items they really need to be happy.
People are massively ordering online. Those traditionalists that continued to go to the mall and show in-store to make purchases are now forced to make purchases online. They may very well realize how much more convenient ordering online is after the crisis is over and continue to do so.
In fact, traditional retail is going to get devastated after this crisis, with Amazon likely emerging as a clear beneficiary.
Companies are using Zoom and Google Hangouts to stay connected with their employees. Most likely, going forward, companies may become more flexible in allowing work from home to take place.
Traditional entertainment such as movie theatres and sport games are gone as people stay inside and stream using Netflix.
Most likely, when all is said and done and the economy gets back to normal, these habits will stick around. Advertising will have to adapt accordingly.
March 26th, 2020
Total cases worldwide have reached 384,424.
How adtech is responding to the coronavirus crisis
A variety of technology vendors and industry associations give their insight into how the sector can successfully adapt during such unprecedented times.
- shifted consumer behavior means digital news, gaming and streaming are seeing upward traffic
- SMEs exist on small margins, so adtech/martech companies are getting flexible with payments
- Some advertisers are offering services for free while the pandemic goes on to ease the pain on SMEs and not lose clients.
More is included in the article.
March 13th, 2020
Total cases worldwide have reached 67,413.
Coronavirus expected to hit global ad spending
Fallout from the coronavirus is expected to significantly curb global advertising growth by many billions of dollars, according to a new report by eMarketer. The firm said that as things currently stand, global ad spend will reach just $691 billion, down from their earlier estimate of $712 billion.
Of course, this is absent many cancellations that have not yet occured, but are suspected to take place if the virus stops spreading. The 2020 Summer Olympics in Tokyo is at risk of being scrapped over fears of the virus. The NBA suspended its season last week, and other sporting events are having matches played indoors with no crowds.
China is largely responsible for the decline, as the strict quarantine imposed by the government in several of the country's provinces halted economic activity. Moreover, increased digital media consumption by people who spent their time consuming media indoors was not enough to offset the loss from advertising elsewhere.
Not all platforms will be affected equally, according to the report. Amazon is likely to take a more serious hit, as disuprtions in global supply chains complicate advertising on the platforms for third-party sellers.
March 11th
Total cases worldwide have reached 53,279.
Digital ad budgets massively being cut
In a new post for SearchEngineLand, adtech journalist Ginny Marvin cited how companies were drastically cutting advertising budgets.
- London-based e-commerce agency Vervaunt said one client was concerned with developments in China, but expected to run ads for at least a few more months based on current stock. But with supply chain disruptions and no improvement in site, they cut Google Search and Shopping budgets by 40%.
- A luxury international travel business cut budgets by more than 50% across all digital channels last month.
- UK-based digital agency Distinctly says that two clients paused ad spend entirely due to coronavirus fears.
At the same time, some analysts believe that marketing budgets will simply be shifted toward the second half of the year and that this will not have a major impact on the advertising industry overall.
March 10th
Total cases worldwide have reached 48,031.
Google target price downgraded on lost ad spend in travel sector
Loop Capital Market analyst Rob Sanderson has cut Google parent company Alphabet's target from $1,450 to $1,320 on an expected 15% y/y decline in travel ad revenue in Q1 and a 20% drop in Q2 because of the coronavirus.
While the cut is only based on expected losses in the travel industry, the firm says that it expects losses in ad spend across all industries.
Alphabet shares fell by 5% in trading on March 11th.
March 6th
Total cases worldwide have reached 40,947.
Facebook ad business to plummet on coronavirus news
Analysts at Needham have reduced Facebook revenue and earnings per share estimates on fears that consumer demand and ad projections will decline in the near term because of the coronavirus.
A research note points to channel checks showing lower spending in travel, retail, consumer packaged goods and entertainment, which taken together make up 30%-45% of Facebook's total revenue.
In addition, six out of the largest ten advertising markets by country are hotspots for the coronavirus.
As advertisers leave Facebook's ad auction, there will be more downward pressure on prices with falling demand for ad units.
