COVID-19 has become a humanitarian, social and political crisis. It is a challenging time for most businesses with many sectors completely locked down. However, there remains a strong case to be made for businesses to continue to advertise. With £1 of investment in advertising driving £6 of growth in GDP according to the Advertising Association, this week’s focus is on opportunities that are available to advertisers given the changes we have seen in media consumption.
AV – Price and flexibility
Linear TV has always served brands and advertisers with the best ROI levels of any medium despite challenges around retaining younger viewers and the fragmentation of viewing across platforms. It will be news to no-one, that in recent years, TV CPTs have been steadily on the rise off the back of falling linear TV impacts. However, in the current COVID-19 market, we have seen a significant reduction in advertiser revenue with Q2 estimated to be -47%. This has been coupled with TV impacts experiencing significant boosts across all age groups. This has made TV, quite literally, the cheapest it has been in 9-years. We see this across all audiences including 16-34s which are forecast to be -48% cheaper year on year in June.
Whilst deflation presents an opportunity for brands and advertisers in the market, it is understandable that TV stations have been keen to offer incentives to bring revenue back to the market. We have seen this evidenced in the form of relaxed AB deadlines (June and July have benefitted from 4-week approval deadlines in some cases), reduced penalties for ‘late cash’ and additional ‘bonus value’ against their on-demand platforms.
It is yet to be seen whether these relaxed regulations will be applicable to future months. Whilst shorter booking deadlines present some operational challenges for broadcasters in terms of managing inventory, there is a desire from TV stations to restore a sense of normalisation to the market. After all, the TV pricing model is based on a market mechanic which relies on the ability to forecast and allocate advertiser revenue. However, with Government ruling still murky regarding social distancing and advertisers still hesitant to commit spend, in such uncertain times, it seems only inevitable that stations will need to continue to be as flexible as possible.
VoD – Added reach and consumption across V0D providers
VOD viewing has increased dramatically through the lockdown period, with an average 40% YOY increase across the major Broadcaster platforms. VOD typically works to a fixed price mechanic and therefore has not seen the same deflationary pricing as per other dynamic supply/demand models.
However, with additional impressions available, suppliers have been offering incentives for new advertisers to come to market through added value on new campaigns. This is then being further boosted by opportunities for reach extension, with new users signing up to the platforms as they seek entertainment during the lockdown. For example, ITV has seen a 15% increase in monthly active users – so both consumption and reach are increasing.
With BVOD now such an ingrained part of consumers total TV diets, it is vital that a strong VOD mix is applied alongside Linear TV to build the most efficient reach. Optimising total TV spend allocation between Linear TV and Broadcaster VOD is therefore crucial to overall campaign effectiveness.
Audio – Reach an unreported audience through linear radio
Linear radio is measured using a quarterly survey methodology, with one quarter priced using the previous quarters listening data. We have seen increases in both daily reach (+24%) and hours listened (+15%) on digital audio since the lockdown began which we can assume is also happening on linear radio. As the lockdown started at the end of March, the majority of Q1 will have seen ‘normal’ listening patterns. Q2 is being priced versus these audience numbers meaning the increase in listening we are seeing now will not be captured in to cost of a campaign and will be extra value clients receive on their linear campaigns.
Across Digital audio, where the increase in impacts has been seen, there are incentives for brands to spend across the lockdown with added value being added to new campaigns. We are also seeing an opportunity for advertisers to turn new creative around in under 24 hours in order to be on air.
Cinema – Drive Through Cinema is back
Luna Cinema, who pioneer outdoor cinema, will be launching their version of Drive-Through-Cinema in June. With the news that cinemas would be closed until July, this will give both audiences and brand the opportunity to watch and be associated with cinema content again. Luna is promising in-car speakers as well as food and drink delivered to your car, with all the sound social-distancing measures you’d expect.
Newsbrands – Reduced demand helping to drive down CPMs in print
As we have seen over the last two months, the demand for trusted informed publisher content has never been greater. With increased usage in digital comes increased supply, and when combined with lower advertiser demand has led to value opportunities in the market. If advertisers can commit budget in June, it is likely they will be able to reach the same audiences but at a reduced CPM year on year.
Whilst we haven’t seen increased consumption in traditional print the same rules apply. Lower advertiser demand means value opportunities can be explored for advertisers who can commit spend over the next few months.
Recent research conducted by IAS also alleviates fears that advertising near Covid-19 will damage brands, and, consumers advocate the use of premium publishers as a route that should be prioritised for advertisers.
Ecommerce – Over demand the only negative
As highlighted in previous articles, COVID-19 will have a long-term positive effect on the ecommerce sector, with customers undergoing a crash course in ecommerce following physical store closures and social distancing measures. The impact will be most noticeable in the food and grocery segment, where online penetration is currently lower than the average across the retail industry. Major supermarkets are experiencing an unprecedented demand for home delivery services, with the only downside being that some are unable to cope with the rush.
Paid Social – What trends can we continue to expect during Covid-19
When it comes to social channels, revenue declines in the short term is having a direct impact on pricing and CPMs. These declines vary by platform and advertising category, but we expect that to continue over the next couple of months.
The COVID-19 outbreak has forced brands to embrace new ways of reaching their audiences in an authentic and relevant way. Brands have turned to Live Streaming to share comms about how they are providing their products and services to customers, helping them reach new audiences in different ways. Looking ahead, we anticipate that Facebook will be analysing this surge in usage, as the placement is currently an ad-free environment.
OOH – The return
OOH is fighting back. Audiences are slowly increasing since the 10th May announcement – specifically on roadside formats and in regional towns/cities. June will bring a new phase of lockdown easing and now the market is looking at how it can encourage brands to return with a level of confidence.
Revised T&C’s – The main vendors have revised their terms to allow for full cancellation without penalty up to 14 days before live date across June – Aug to ward any Covid-19 related relapse.
Audience predictions – The OOH measure, Route, is not a live tracker. OOH is using a combination of mobile, Google mobility, Barclaycard data, etc to accurately forecast the reach on an OOH activation across Jun-Aug. The additional value will be offered to clients for any perceived audience under delivery.
‘Welcome back’ packages – Opportunities for brands at the perceived moment lockdown ends. Can take many forms, a thank you or celebration, but bespoke packages to target a defined + growing audience across Jun-Aug as society reopens.
The DOOH model is changing – focusing on ‘cherry-picked’ sites to reach a specific audience rather than a price per panel for 2 weeks. Clients can pinpoint who they want to reach and are able to flex their activation with contextual copy to improve the impact. Multiple copy changes can be handled with ease – specifically, hyper-locality & ‘life easing’ messaging can add weight to activations at this key time.