The economic effects of COVID-19 on communities worldwide are wreaking havoc on the advertising marketplaces on which media companies rely to fund journalism, according to speakers addressing the INMA Virtual World Congress Monday. The road to recovery is unclear and may never return to pre-COVID levels.
Today was the third of nine World Congress modules featuring analyses by Boston Consulting Group, Deloitte, and Prohaska Consulting, as well as case studies from Gannett | USA Today Network, Infoglobo, South China Morning Post, and The Irish Times. The Congress has attracted 341 delegates from 43 countries.
The effects of the downturn and lockdown are generating fluidity among categories and media. Print, TV, and radio media are expected to see minimal rebounds in 2020-2021 with secular trends accelerating and leaving legacy platforms with perhaps only 80% of their pre-COVID ad revenues.
As advertisers are canceling contracts and adapting their marketing strategies in the face of the coronavirus crisis, mission- and cause-related messaging is witnessing an increase. Consistent with trends over 20 years, digital advertising is the most resilient during downturns, though even online budgets are not immune. CPMs are low, and advertisers continue to worry about brand safety around coronavirus news coverage. In fact, digital advertising spending is already experiencing a slight rebound, though it’s still off-plan for the year. Premium publishers are experiencing a slight rebound in ad spend projections, too.
Key takeaways from advertising module
Synthesizing key developments from Monday’s World Congress sessions focused on advertising;
The shape of the V recovery: Boston Consulting Group sees a recovery somewhere between a “light V” and “strong V,” while Deloitte confirmed projections of a V-shaped recovery. Building relationships: Case studies by the Irish Times, Gannett, and Infoglobo stressed a desire to build relationships — not transactions — with advertisers through the crisis. Scale players and market share – “Scale players” are pushing for market share during the crisis by super-serving client, proving their value, and forming publisher consortia to scale ad sales, according to BCG.
Agility will pay off; Channels with greater agility in creating, editing, and optimsing creative will lose less advertising during the downturn, according to Prohaska Consulting. Ad-supported video services; time spent with ad-supported video services will be up 40%, but the question is whether the rest of the world will catch up with Asia ad spending in this space, Deloitte reported. Optimism and pessimism among consumers; there is a dichotomy between mature and emerging markets; consumers are expected to cut spending in mature markets, while they are aiming to increase spending in emerging markets. Work-from-home necessities; the work-from-home development is about to face a new twist: While efficiencies are being realised, WFH will soon be a necessity as companies welcome back people to an office environment. The problem is companies can only house 50% of what they did before social distancing. Thus, WFM becomes a requirement.
BCG looked at global advertising category winners and losers. Winners include food delivery, in-home entertainment, household care, fresh foods, and vitamins/supplements. Losing categories include travel, dine-in restaurants, public transport, out-of-home entertainment, luxury and fashion, home décor, and cars.
The BCG point about cars being a losing advertising category was muddied by Deloitte’s view that public distrust of public transport due to COVID-19 could spark a rise in private car sales later in the year.
Recommendations for ad sellers
Tying together BCG recommendations for ad sellers with other World Congress sessions, we took away. Over-serve your customers; Gannett’s comprehensive national efforts across three major initiatives is an example. Develop new ad products; Deloitte’s views on ad-supported video services. Push further into branded or service content: Infoglobo and The Irish Times presented cases on this. Third-party sellers or consortium selling: INMA is hearing this in the United Kingdom, India, and elsewhere. Legislate for fairness with Google and Facebook: This idea was supported in the recent INMA report, “How to Decode the Publisher-Platform Relationship.”
Shift to consumer pay models: INMA’s Reader First Initiative, outlined at Thursday’s Congress sessions, is the industry standard on this recommendation. Practice smart pricing and buying or partnering for scale.
Marketplace trends
One of the advantages to an INMA World Congress is the breadth of knowledge. That is especially true of the analysts and forecasters giving their views. We found some contradictions and augmentations today, especially via the Deloitte presentation compared with the eMarketer presentation six days earlier.
Cord-cutting: Both Deloitte and eMarketer acknowledged cord-cutting is accelerating because of COVID, though Deloitte said Monday traditional TV has surprising staying power. Podcasting during lockdown: Podcasting in the United States is down 10% due to fewer commuters in cars and during transit, which is impacting podcast advertising, Deloitte reported. Yet eMarketer said the rise of audio on mobile during the downturn is at least partly mitigating this. Transport during COVID: Deloitte reported that use of private cars will be up dramatically as bus/metro ridership will be down dramatically — thus, new car purchase intention will be up. This conflicts with BCG’s negative car advertising projections. 5G: eMarketer reported last week that 5G, short-term, is about latency and not speed. Yet Deloitte laid out the long-term vision through 2035 as a big enabler of manufacturing, transport, construction, utilities, and mining. There was even a suggestion that publishers trial private 5G with their printing plans.
Case studies of advertising success
Today’s World Congress concluded with four case studies;
Gannett | USA Today Network: Major national initiatives include Support Local, #DistanceDance, and Rebuilding America, while best practices shared included a dedicated COVID section on intranet, a “wins” database, creative shifts, vertical best practices, marketing materials, training, video stand-ups, rising opportunities, and the company’s Web presence.
Infoglobo: The Brazilian media company is seeing the winds behind COVID-19 expediting its journey to becoming a media tech company: Covered Monday were the shift from live events to live streaming, adapting print branded content to the new context, keeping the digital audience high, new training for the acceleration of digital sales, and working with Google.
South China Morning Post: The focus was on optimising programmatic adtech including floor prices, ad log data as a tool, supply path optimisation and consolidation, limiting liability, and product innovation.
The Irish Times: How the Times views partnerships, notably with fitbit, and the empowerment through transparent data, crafting brand stories worth sharing, and a “Women’s Podcast Big Night In” were profiled.
If Monday’s World Congress sessions on advertising were not profound enough, Gannett’s Kevin Gentzel had the line of the day that many INMA publishers would agree with: “The future is June – then we’ll recalibrate through August.”
The INMA Virtual World Congress resumes Wednesday with “Smart Data In the Shadow of the Cookiepocalypse,” brought to you by Piano. The module will take a case study approach to data journeys, notably away from third-party cookies and toward first-party cookies from The Washington Post, JP/Politikens Hus, Amedia, Aller Media, and the Financial Times.
