Global marketers show ‘guarded optimism’ amid planned global ad spend boost

The Drum delves behind the numbers.]

Global marketers are ‘guardedly optimistic’

• The latest round of data stands in contrast to figures published in May, which saw global brands freeze all ad spending during the coronavirus crisis.

• Fast forward four months, and the picture has become somewhat less grave with 21% now positive about their prospects, and 36% feeling neutral - versus equivalent responses of 8 and 41% in June.

• This translates to 54% of respondents no longer deferring campaigns, although actual spend remains considerably lower than planned through the first nine months.

• The only channels to witness any kind of growth over the period are display and online video which are up 6 and 9% respectively.

• Responses were gleaned from senior executives across 35 major advertisers last month, accounting for $67bn of cumulative annual ad spend between them.

Where has spend been hit hardest?

• Throughout this period advertisers have not been sitting on their hands, taking advantage of the downtime to shift to digital and many fully transitioning to channel-agnostic video.

• Multinationals report a renewed focus on e-commerce increased virtual/digital marketing activations and influencer events and a rebalancing of investments between experiential and digital.

• As this is happening traditional channels such as TV, out of home and point of sale are pushing out of the trough reached in the first half, with TV paring a 33% decline at that time to a 25% contraction over the first three quarters as a whole.

• Out of Home is also showing signs of a pulse with a catastrophic 49% collapse in the first half improving to stand at a 39% decline for the year to date. Similarly, point of sale is down 20% compared to 23% in the first six months.

• Influencer marketing is among the sectors to approach previously planned investment with the category dropping 11% in the first three quarters compared to a 22% drop in the first half.

• Unsurprisingly the worst-hit areas were events and experiential which continue to sink, with contraction extending from a 56% fall in the first half to 60% through the year to September.

• Radio has also been hard hit with a 25% first-half fall contributing to a 35% decline for quarters one to three.

Why does it matter?

• As a whole, the figures represent the first tentative grounds for optimism in an industry still licking its wounds from the worst the pandemic has thrown at it.

• Stephan Loerke, chief exec of the WFA commented: “We are starting to see some green shoots of recovery with more than half our members no longer holding their campaigns back as a result of the pandemic. There is still a lot of uncertainty though and it’s unlikely we’ll be moving to ‘business as usual’ anytime soon. We are also seeing an acceleration of the shift to digital channels but it remains to be seen if this will be permanent."