21 MEDIA talk | FLEXIBLE, VERSATILE, RESILIENT
ADVERTISING REVENUE UNDER THREAT
While consumers turned to online avenues for news and entertainment, the flood of new views did not necessarily produce a corresponding increase in ad revenue. In fact, the first half of the year proved challenging for advertisers faced with a reduction in spending and a cautious clientele in the context of difficult stories. This testing configuration was labelled by Adweek as a ‘publisher’s paradox’ and the remedy will need time. Data released by the Interactive Advertising Bureau put the challenge in perspective: c.24% of media buyers put a halt on spending during the first and second quarters this year and almost half ( 46%) of all respondents suggested that they planned to adjust their spending over that time period. The recovery of key sectors will be essential to lifting advertising numbers as a whole when 74% of media buyers and brands expect the pandemic to have had a deeper negative impact than the 2008 financial crisis.
Paris-based Advertising giant Publicis Groupe has also warned that this year is likely to see an historic decline in spending on advertising due to the lack of activity from automotive, food, travel and retail. And the difficulties are not over. The reduction in spending has been widespread, but spending through digital platforms has remained relatively flat in comparative terms suggesting that the latter will be better placed to recover post- COVID. Most important will be the access to behavioural data that digital platforms have collected over this time period, which will be a huge competitive advantage for digital. After all, advertising must shift with consumer habits. So, in addition to compiling such data, analytics will be needed to sift through and distinguish the changes that are likely to prove long-lasting from those that may just be temporary adaptations. Approaches will also need to change. Brand- sponsored content, for example, has long been a part of the advertising repertoire of big brands.
From branded giveaways on gameshows to sponsored events, there is nothing new to the concept of sponsored content. But the variety of opportunities is certainly new, and there is more opportunity for brands to display their identity and to offer natural, in- program demonstrations than ever before. Recent research conducted by Channel 4, which explored academic studies mixing both statistical evidence and qualitative insights, has suggested that this form of advertising is also more effective than spot ads, consisting of a 29% uplift. The research also suggested that almost half of all respondents in a linked survey reported a more positive image of a brand when associated with programming, a phenomenon dubbed ‘brand rub’. This method of advertising is not easy though and requires a coherent fit between the brand and the content. But this sort of creativity is exactly what advertisers need to explore in order to make the biggest impact in difficult times.
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