With the Coronavirus pandemic being with us for the foreseeable future, traditional media pioneers, agencies and big companies of social media are all trying to adapt themselves to the new situation and also planning their next moves. To get some insights on how they are adapting and what will be their next move, we must check their earnings calls.
The Reactive Stage
March’s last two weeks have seen marketers struggle. Some worried and avoided investing, some switched to different networks and unfortunately some could only concentrate on keeping their business alive. This impact was felt instantly by Facebook and Google. Not only are their cumulative sales so strong that they reflect global trends, but they still have extremely scalable marketing formats that allow marketers the ability to delay operation from day to day.
Nonetheless, they recorded strong growth in Q1, although Facebook had a modest rise in sales, while last year’s revenue increased by an incredible 44 percent. Instability in Q2 seems to be obvious. Small companies experience severe economic difficulties, with the effect of this industry on both Google and Facebook. It is further exacerbated by access to the travel and entertainment industries that have long become major internet investors.
Despite the exception of the April turnaround call from Twitter, most marketing networks are trying to downplay hopes about what’s to come in the second quarter. The social media and internet heavyweights are nevertheless well situated as advertisers engage in isolation ads.
The Lockdown Stage
In various levels of lockdown, companies always want and need to promote their business to customers. Choosing networks is simple part, communicating and producing content is a variable.
WPP’s Q1 trading statement applies to the sharp declines taking place in outdoor, television, journal, and newspapers. None of this is shocking because our homes put almost all focus on computers. Newscorp is already announcing losses in sections of their market in April of up to 45 per cent.
Research Company Kantar estimates that TV viewing is 63% higher than average levels. Throughout the pandemic we’ve all been stuck to sets at various moments. But television suffers from longer scheduling periods, higher costs of commercial output, and a lack of good measurability, as well as an unwavering need for consistent content and events. ViacomCBS experienced a 30% decrease in commercial revenue from Q1 broadcasts, mainly due to the absence of live competition.
Large multinationals and brand building through TV broadcast will continue, but the channel will fail to draw new sponsors, or to buy any commercial premiums in the long term.
Instead, the advertisers are focusing on digital world.
Not only does Digital boast increasing public attention across web browsing, social media and messaging platforms, it is also much more adaptable to the brands’ advertising requirements. As we are all faced with same global pandemic, the variable reaction between states, nations, and continents requires targeted advertisers to be reliable, messaging-flexible, and have continuous lever control. The societies are constantly evolving and new technology helps advertisers to change, for as long as the flux state exists.
The Slingshot Stage
Businesses are willing to open up and customers are ready to buy. And it is evident that a degree of restraint and social distancing would arrive with the removal of lockdowns. Nonetheless, companies would continue to pay to bring clients back to separate themselves from any other company seeking to do almost the same thing.
Advertising, however, will not elasticize back to the pre-virus state.
Customers have taken a step forward towards online shopping, amongst other huge changes. Amazon’s warehouse often runs empty and now Shopify is the most profitable public corporation in Canada. With their e-commerce plans, the conventional bricks and mortar stores have undergone major improvements offsetting decreases with physical shop revenue. April’s e-commerce revenue for Costco is up 85.7 percent year-on-year, and online Target is up 100 per cent. E-commerce won’t withdraw and traditional stores may need to start spending in digital ads in their online client journeys.
With possible second waves of the coronavirus, and evolving government policies, we should also predict sustained instability by 2020. Marketers should be conservative when contributing strongly to advertising or networks. This limits complicated production shots and locks out long-term advertising purchases. Outdoor and print will rebound, significantly aided by their rising digital footprints and lighter demands on output. Television transmissions would slip farther behind. Digital platforms and social media should demonstrate the strength of flexibility as marketers often seek to improve messaging.
Last year, eMarketer predicted that digital kept just over 50 percent of global ads, rising to 60 percent by 2023. Ad spending would certainly suffer from the closing of small companies, the cancellation of categories and the removal of advertisement budgets by the CFOs. But from this smaller pie, social and digital will get a much greater slice, even sooner than expected.