‘A more hopeful future’: As the coronavirus surges, advertisers aren’t pressing pause
Coronavirus cases have once again surged across the U.S. In response, some states have started to move backwards in their reopening phases, shuttering schools and asking people to stay home as much as possible.
And yet, advertisers aren’t pressing pause or pulling the emergency break. Instead, their spending has remained consistent, according to media buyers and agency execs, who say that advertisers are more prepared this time around as they have built in more flexibility into their ad deals. As Digiday has previously reported, adding flexibility to long-term commitments in the TV sector has become more commonplace in the months since the initial wave of the virus.
“Agencies and clients proactively built flexibility into plans to protect themselves in the event they needed to pull back advertising,” said Catherine Warburton, evp and chief investment officer at 360i.
Knowing that flexibility is there has made advertisers less likely to pull spending this time around, according to buyers who say without a national shutdown that mood is unlikely to change. At the same time, advertisers who need holiday sales to make up for revenue losses early on are dependent on advertising to help them meet those goals. With the need to do so in a short window, some advertisers are less likely to stop spending even amid the worsening coronavirus numbers.
“A lot of big brands put a lot of things on pause in March,” said Brendan Gahan, partner and chief social officer at Mekanism. “Those that fared well still have their same overall marketing budgets and/or slightly reduced budgets and are now making up for lost time. Additionally, going into the holidays a lot of brands are trying to sell during the biggest buying time of the year.”
So far, publishers haven’t been hit like they were at the beginning of the pandemic. Last week, my colleague Max Willens surveyed five chief revenue officers at various publishers to find out what those publishers were hearing from advertisers. Those CROs said that spending continued apace and that should there be another serious lockdown those advertisers know those publishers will be “good partners.”
The knowledge of the partners who helped advertisers early on by allowing them to quickly press pause has also made advertisers more comfortable with sticking it out right now, according to buyers.
Overall, there’s a sense from media buyers and agency execs that we’ve “learned to live with the virus,” noted Allen Adamson, brand consultant and co-founder of Metaforce, in the months since the initial advertising plunge in March and April. That’s not to say that advertisers are gliby moving on with business as usual, but that the initial uncertainty and fear that defined those early months has not returned. Now that we know how the virus is contracted and have promising vaccines on the way, there’s light at the end of the tunnel and that’s helped keep advertiser spending consistent.
“People are spending on what they perceive to be a more hopeful future,” said Amy Lanzi, evp and North America lead at Publicis Commerce.
In last week’s marketing briefing, I spoke with consultants about the continued agency consolidation. (Since then, there’s been another consolidation at WPP with VMLY&R merging with Geometry to create VMLY&R Commerce.) While chatting with a few consultants about why WPP would want to put AKQA front and center rather than Grey, a few mentioned that the need for “performance-based creative” has come up over and over in each creative review that they’ve seen this year. That could be part of the reason why AKQA became the primary brand as well as a nod to the way traditional creative agencies may change their pitch and approach going forward.
“I’m hearing from marketers, ‘I still need a creative agency, but one who will think about my business and opportunities for my business to grow,’” said Lisa Colantuono president of search consultancy AAR Partners. “All of this leads into this creative agency with a performance-based mindset. That’s where we are today. I don’t think the creative agency is dead, it’s just a matter of consistently pivoting and evolving with the landscape in front of you.”
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