{"id":15887,"date":"2020-03-30T12:55:20","date_gmt":"2020-03-30T10:55:20","guid":{"rendered":"https:\/\/eastwind.es\/marketing\/?p=15887"},"modified":"2020-03-30T20:03:36","modified_gmt":"2020-03-30T18:03:36","slug":"ad-spend-recession-nocking-at-the-door-by-covid-19-warc-report-says","status":"publish","type":"post","link":"https:\/\/eastwind.es\/marketing\/en\/ad-spend-recession-nocking-at-the-door-by-covid-19-warc-report-says\/","title":{"rendered":"Ad spend recession may be nocking at the door by COVID-19, WARC report says"},"content":{"rendered":"

Major economies are stopping the activity in not essencial sectors to combat the contagion of the COVID-19, both this fact and the needed investments to fight against the pandemic are leading European countries to recession. A recession that may filter to the ad sector in many ways, including ad spend cuts. Besides, e-commerce is seing a n unprecedent rise due to confinement meassures imposed by the governments and by fear of contagion.<\/p>\n

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James McDonald (Managing Editor,_WARC Data). \u00a9 WARC.<\/span><\/figcaption><\/figure>\n

James McDonald, Managing Editor, WARC Data, and author of the research, says: \u00abThe current downturn may not hit FMCG as hard as other product sectors, but it is likely to be consequential in terms of changing consumer purchasing behaviour. A sharp increase in e-commerce activity may result in online players becoming more significant as the gatekeepers to FMCG shoppers.<\/p>\n

COVID-19 crunch filtering through to advertising<\/span><\/strong><\/p>\n

The COVID-19 crunch is filtering through to advertising; RTL, Europe’s largest broadcaster, has stated that COVID-19 is hitting ad bookings, while in the US NBCUniversal also expects a material impact, not least because its Olympic coverage has now been postponed.<\/p>\n

UK broadcaster ITV reports the same, notably within the travel sector (5% of its 2019 ad revenue, or \u00a391m) and expects ad growth to be down 10%. JCDecaux is anticipating a 10% dip too.<\/p>\n

Baidu in China advises Q1 revenue will be down by as much as 18% while other online pure players, such as Alphabet, Twitter and Facebook are also exposed – digital channels are often the easiest to switch off in a time of crisis.<\/p>\n

The last financial crisis removed $60.5bn from the advertising market, with all media apart from online search recording declines in investment. The market took eight years to recover from this shock after accounting for inflation and currency fluctuations.<\/p>\n

FMCG sales boom on Amazon and Tmall as consumers adjust to ‘the new normal’: One in four is now shopping more online due to COVID-19<\/strong><\/span><\/p>\n

A WARC analysis of Edge by Ascential data shows sharp rises in the sale of FMCG products on Amazon in the US and UK over the last few weeks, with growth far exceeding both Amazon Prime Day and Black Friday. In the US, sales of hand sanitiser were up by over 650% compared to a year earlier, and 450% compared to Prime Day. Sales of pantry staples, vitamin C and disinfecting wipes more than doubled. Nielsen also recorded sharp rises in grocery sales across all US outlets, notably for powdered milk (+85%), dried beans (+37%), canned meat (+32%), and rice (+25%).<\/p>\n

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\u00a9 WARC<\/span><\/figcaption><\/figure>\n

The picture was similar in the UK; sales of antiseptics & disinfectants were up by almost 300% on Amazon, while sales of soaps & hand wash trebled. In China, sales of face masks, oral mouthwash, snacks & confectionary and alcohol have more than doubled, according to data from Yimian.<\/p>\n

The upshot of increased e-commerce activity is that online players may become more significant as the gatekeepers to FMCG shoppers. For the big manufacturers, this may increase the importance of DTC or subscription offers. Consumers are now ‘living a new normal’, and crisis-buying habits may become permanent behaviours.<\/p>\n

Millennials top the ranking among online shoppers<\/strong><\/span><\/p>\n

One in four is now shopping more online due to COVID-19. Millennials (39%) are more likely to do so, followed by Gen Xers (25%). Higher earners are also significantly more likely to than lower earners (48% versus 15%). Most shoppers are going online at the expense of visits to the store; this is particularly true in India (55% of consumers) and China (50%), but also notable in Italy (31%), the US (23%), and the UK (18%).<\/p>\n

FMCG better prepared to weather the recession<\/span><\/strong><\/p>\n

During the last advertising recession in 2009, advertising investment among the food and drink sector fell at a far softer rate than the wider industry. In the UK, the food sector reduced investment by 1.3% to \u00a3860m and the drinks sector by 2.3% to \u00a3321m. This compares to a 5.6% fall for total FMCG (to \u00a31.98bn) in the UK and an 11.7% dip for the total UK market (to \u00a313.11bn). TV was by far the hardest-hit advertising medium.<\/p>\n

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\u00a9 WARC<\/span><\/figcaption><\/figure>\n

Sales revenue was down for each of the five largest FMCG companies in 2009, though only P&G (-11.7% to $7.52bn) and Coca-Cola (-6.9% to $2.70bn) cut ad investment. As a share of sales revenue, advertising spend held during the last crash at Unilever (13.3% of sales, or \u20ac5.30bn), P&G (9.8%, $7.52bn), Nestl\u00e9 (33.7%, CHF36.27bn), Coca-Cola (9.0%, $2.70bn) and L’Or\u00e9al (30.8%, \u20ac5.39bn).<\/p>\n

The FMCG ad market was worth $97.2bn in 2019, a 15.6% share of global advertising spend. Much of this money is spent online; for example, 55.8% – $28.55bn – of ad budgets in the household and domestic sector is invested in online advertising. This compares to a 26.9% share ($25.59bn) for toiletries & cosmetics.<\/p>\n

The food and drinks sectors spend most on TV, at $17.0bn and $16.28bn respectively. Brand-building is important within these sectors as products are sold via third-party retailers, not directly to consumers. These sectors are better-placed to weather the impending recession as shoppers continue to buy the essentials; the apparel, automotive, retail (non-food), consumer durables and leisure & tourism sectors will be disproportionately affected by a downturn.<\/p>\n

Image over the headline.-<\/strong>\u00a0\u00a9 WARC<\/span><\/p>\n

Related Eastwind Marketing links<\/span>:<\/strong><\/span><\/p>\n

WARC.- Internet ad investment to grow 13.2% totalising $335.4Bn, over a half of global ad spend in 2020. The \u2018duopoly\u2019 Alphabet-Facebook expected to grab 35 cents in every ad dollar<\/a><\/p>\n

Cannes Lions, delayed to October<\/a><\/p>\n

World football stars join the WHO-FIFA \u201cPass the message to kick out coronavirus\u201d campaign<\/a><\/p>\n

BBDO de-locates all their central headquarters around the world by the coronavirus pandemic<\/a><\/p>\n

Related Eastwind Marketing links<\/span> (Spanish edition):<\/strong><\/span><\/p>\n

El sector publicitario reclama al Gobierno que incentive y mantenga la inversi\u00f3n en medios
\n<\/a>
\nCOVID-19.- Los exclusivistas de publicidad exterior piden a los ayuntamientos la rebaja del canon por explotaci\u00f3n de soportes<\/a><\/p>\n

Related Eastwind links<\/span>:<\/span><\/strong><\/p>\n

IMF confirms world economy in recession by COVID-19 spread and response against pandemic<\/a><\/p>\n

COVID-19 to have devastating effects on all economies, no matter their links to global supply networks, UNCTAD warns<\/a><\/span><\/p>\n

COVID-19.- Sustained reductions in tourism flows, heavily pushing down GDP growth and job creation in OECD members<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Major economies are stopping the activity in not essencial sectors to combat the contagion of the COVID-19, both this fact and the needed investments to fight against the pandemic are leading European countries to recession. A recession that may filter to the ad sector in many ways, including ad spend cuts. Besides, e-commerce is seing …<\/p>\n

Ad spend recession may be nocking at the door by COVID-19, WARC report says<\/span> Leer m\u00e1s »<\/a><\/p>\n","protected":false},"author":8,"featured_media":15671,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[5],"tags":[10612,580,10613,10486,578,4269],"yst_prominent_words":[],"_links":{"self":[{"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/posts\/15887"}],"collection":[{"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/comments?post=15887"}],"version-history":[{"count":0,"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/posts\/15887\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/media\/15671"}],"wp:attachment":[{"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/media?parent=15887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/categories?post=15887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/tags?post=15887"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/eastwind.es\/marketing\/wp-json\/wp\/v2\/yst_prominent_words?post=15887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}