The COVID-19 pandemic has been a huge disruption for just about every industry around the world. Brands, especially those deemed to be “nonessential,” have seen significant decreases in monthly revenues. With some experiencing a near stand-still in revenue generating activities. This puts brands in a delicate position, as they know that they cannot stop advertising if they want to reach their audiences but also have to adapt to budget cuts and focus on keeping the lights on vs. utilizing their advertising budgets.
As most of people have retreated into the safety of their own homes, the world’s dependency on all things digital and streaming is at a new all-time high. Even older more traditional avenues of consuming content (i.e., television) has increased significantly among younger demographics as they look for things to occupy their time. In fact, according to a recent AdWeek article, time spent watching TV overall has risen 17 percent among total viewers, 29 percent for kids two to 11 and 46 percent for teens 12 to 17. In addition to consuming content over traditional television, social media and streaming giants that everyone has come to love (Netflix, Amazon, Hulu, Disney+), a new player Quibi has entered “the ring” on April 6, 2020. Quibi focuses on short-form content that has been crafted to be consumed on mobile devices while on the go. While these opportunities are not met without challenge, here are some key insights for advertising agencies working to weather the storm and push forward during the COVID-19 pandemic.
Shift Focus to Reach Consumers Where They Are Now
Many brands have advertising campaigns that include out-of-home advertising (OOH), such as signs on top of taxi cabs, billboards, bus shelters (and buses themselves) and at restaurants, which for the next few months will not be an effective place to advertise given the shelter-in-place directives in many states across the country. This may not result in a loss of an overall advertising budget, however agencies can be creative to work with brands to shift spending to digital and streaming providers.
Pivot or Mix-Up Brand Messaging
For obvious reasons, COVID-19 has become the most widely read about topic across the globe over the last month. The vast majority of content being pushed out tends to be more negative in nature and not necessarily focused on positive or engaging topic, which is not conducive to most target markets. Many agencies are beginning to focus on the impacts on consumer habits, hobbies and how certain everyday brands/activities factor in to the “new normal.” At a minimum, brands are also seeing increases in engagement and return on ad spend (ROAS) with content that contains humor, as it serves as a distraction during these times. All of this has resulted in an increase in actively engaged consumers who are seeking purchase decisions that will have a positive impact on their day-to-day lives.
Revisit the “Toolbox”
Just because video production and photoshoots are on hold, does not mean that a company is dead in the water. Many agencies are getting creative with the resources they have at their disposal. This can include going back to stock footage, animation, archives and going back-to-the-basics. Ad agencies have some of the most creative talent in the business, a skillset that is “tailor made” for this opportunity.
Do Not Forget About Finance and Accounting Service Providers
Over the past few weeks, the federal government has unveiled a massive $2-trillion stimulus package, which includes various provisions that can benefit small to mid-size ad agencies as part of the CARES Act. Ad agencies should be working closely with their accountants and financial advisors to seek out any and all opportunities as part of the CARES Act and need to act swiftly before the available funding is fully utilized on certain programs.
If you have any questions, please contact the GHJ’s COVID-19 team to assist with opportunities or aspects of the CARES Act or any other COVID-19 related inquiries.