Ad Budget for Brands in 2020: To Spend or not to Spend?
2020 is a time for change. It definitely wasn’t anticipated change, especially for companies advertising budgets. In fact, before COVID-19, 2020 advertising budgets were expected to increase across traditional media such as radio, television, and publishing houses.
Watching consumer trends change has been interesting but obviously concerning for many brands. Making the shift to digital isn’t always easy for many due to the need for daily ad spend to be placed at a higher cost. But hear us out; according to the WARC (World Advertising Research Center) they’re expecting to see a $50 billion cut in global advertising spend across all brand categories. That’s huge and while a little disheartening, still a way for you to pivot your former plans and still get your own slice of the proverbial digital pie.
What Does the Impact of COVID-19 Really Mean for Traditional Media?
First, let’s take a look at ourselves as consumers. I’m willing to bet a good majority of you no longer have cable and utilize streaming services such as Netflix, Hulu, and Amazon Prime instead. With these streaming services come the option for a package deal that omits any ads. The same idea goes for print pieces. A lot of us have subscriptions to online news sources, even down to podcasts! And speaking of podcasts, I bet you’re using a streaming service such as Spotify, Pandora, or Apple Music. In fact, as I write this, I’m listening to music on my Spotify account that I’ve had since 2012.
We might not realize it, but if you sit back and really think about your daily habits, the shift to digital has been creeping up on us for almost a decade. 2020 has only accelerated the need for companies to meet their audience where they’re at — online. As the pandemic is unfortunately here to stay, at least for the time being, many people are still working remote and spending more time at home. This time at home increases the chance for paid search views and social media ads to skyrocket.
Start taking advantage! Data has been gathered since the start of COVID-19 and continues to be gathered as we continue further into 2020. Make it a habit to keep your brand abreast of all updates — that way, you’ll know how to appropriately adjust ad strategies as time goes on.
A Peek into Ad Spend Across the Board
According to PubMatic’s chart, ad spend will vary across several categories virtually affecting each industry a little differently. Long story short: if you have the overhead to spend and advertise on social media platforms such as Facebook, Twitter, and YouTube, do it. As 2020 progresses and more data is gathered, one trend stays the same: online advertising is on the rise.
After carefully reviewing multiple data sets, it would be a wise choice for brands to refocus most paid ad efforts to social media, paid search, and email. With a global spike in media consumption, your chance to reach a broader audience has drastically increased.
Pro tip: Implement the use of automation services so that your posts will not only have better reach, but better visibility as platforms such as Hootsuite, CoSchedule, and Buffer are programmed to post at peak times.
Brands wanting to thrive in today’s current climate will do so by focusing efforts on popular media where consumers are. Reports gathered from Statista show that people have increased their time on social media by 21% since March and a 36% increase of online news consumption. With social distancing in full swing, these numbers are forecasted to keep rising.
The Foreseeable Future of Advertising
For those of you who remember the financial crisis in 2008-2009, the WARC report shows that we didn’t start to fully recover until 8 years later. That was a -6.4% decrease in global ad investment. This year, in just the span of a few months, we’ve already hit a -9.1% decrease — potentially putting our recovery period well over a decade.
We see every challenge as an opportunity. And while this is quite a challenge, there is an infinite amount of information at your fingertips to monitor the current online environment. While data shows ad spend declining across the board, this is the ideal time for your brand to increase your own ad spend. There’s no faster way to garner market share for your company than when others pull back. Now is the time to act and market share gains achieved that would normally take years to make during “good times”. Keeping ahead of the curve by adapting previous advertising strategies to digital will help your brand swim instead of sink.
Together, we’ll keep adapting, adjusting, and succeeding throughout these unpredictable times. The Tinsley team hopes you continue to stay safe and healthy. To shorten the process of uncertainty, let’s remember to keep practicing these five steps as we continue to fight the spread of COVID-19.