The Covid-19 pandemic took the world by storm in 2020, holding economies hostage and changing the lives of individuals around the world. Now, with cities and states re-opening, we can consider how and why this pandemic affected the advertising and marketing industries in order to understand what the ads landscape will look like as we return to a “normal” way of life.
With concerns about the Covid-19 pandemic and stay-in-place regulations spreading during early 2020, it’s not surprising that marketing budgets took a hit worldwide. This is not to say that every company automatically stopped advertising; while some brands pulled budgets entirely, others adapted their messaging or simply reduced budgets. In December of 2020, the global marketing intelligence service WARC announced that global ad spend had dropped approximately 10.2%, or $63.4 billion that year alone. The largest of these spending cuts affected the automotive, travel and tourism, and retail industries. However, many of these budget cuts were directed at out-of-home (OOH) advertising, like billboards and signs. As a consequence, other platforms became increasingly more conducive to attracting new customers at home – most importantly, digital marketing and advertising.
The Consumer x Brand ‘Meeting Place’
Large and small businesses alike were frantic to keep their companies afloat. With stay-at-home regulations persisting, many businesses adapted towards a more digital focused business approach. Dustin Porreca, an SEO manager at Elevate Demand, explains the reasoning behind this with statistics from YouTube. “Clients have seen an average 68% increase in video content consumption on YouTube since March 2020” he said. “In any marketing strategy, your goal is meeting your buyers where they’re going to be at any given time.” This communal “meeting” place for buyers and advertisers was entirely digital during the Covid-19 pandemic, and in most cases, it was via social media. TikTok is a great example of a digital meeting place, with sponsored videos and ads being played intermittently throughout user videos. In fact, TikTok saw a 75% climb in usage throughout 2020, according to Pew Research.
Given all of this information, where do the advertising and marketing industries go from here? Will OOH advertising budgets ever come back? Or will digital marketing be the only answer for advertisers going forward? We can investigate in looking at 2021 trends.
The Role of Digital in Messaging
Advertising and marketing spend has grown considerably since Q4 2020. On the digital front, WARC predicts that 44% of brands are going to increase spend on TikTok advertising in 2021, and 39% on Facebook. OOH, on the other hand, is only forecasted to see a 19% bump. Even with this boost, OOH advertising spend will still net out 13% lower than in 2019. With this said, it appears OOH may recover eventually, but nowhere near the rate at which digital channels are recuperating lost revenue.
One huge advantage digital channels have over traditional OOH is the ability to pivot and optimize messaging quickly, with very little spend wasted. And, during the pandemic, messaging has arguably been one of the most crucial pivots brands have had to make.
Take, for instance, Visible’s “Visible Acts of Kindness” campaign, or “Isolated, Not Alone” by AVON. Both campaigns were executed during 2020, and set a standard for other businesses to put the consumers intentions and safety over their own profits. American Express’ business and trends blog notes three primary shifts in consumer behavior that occurred during the Covid-19 pandemic: consumers being more conscientious, consumers embracing brand agnosticism, and consumers utilizing online venues for their purchases. This consumer shift not only affected marketing strategies, but also the positioning and use of the product or service offered – which, sometimes, took a backseat so that brands could act on their morals, compassion, and empathy. For instance, Visible Wireless catered to these consumer mindset shifts in their “Visible Acts of Kindness” campaign by using social media to provide aid to 1,000 families in need. AVON partnered with domestic violence awareness organizations to conduct live video sessions to connect with those in need, and even issued government letters to push for higher visibility on the severity of the issue with new stay-at-home orders.
The Bottom Line.
The Covid-19 pandemic has challenged individuals and businesses alike worldwide. While advertising and marketing budgets were slashed in 2020, we can observe consumer trends this year and last to make some predictions as to where brands will be focusing ad dollars as we exit the stay-at-home orders. Digital has reigned supreme over traditional OOH advertising over this period due to its ability to reach consumers at home and pivotable messaging. While OOH is regaining some of its momentum, it doesn’t look like it’ll overtake digital anytime soon.
This article was informed with information from our in-house analyst, Tim Carpenter
Want to see more updates from us? Subscribe to our newsletter below.
[newsletter_form]
