Insights on U.S. Advertising Industry During COVID-19

Measuring COVID-19 and stay home orders given in most of the world, In the US market, the advertising expenses have been cancelled, postponed and in some limited cases improved. Yet the same results do not affect all sectors and businesses. For certain sectors, businesses in the advertisement sector are now showing sparkling bright lights. Nonetheless, several businesses are just switching off their advertisement budgets, at least for now. Many advertising supervisors are very hopeful for marketing expenditure in the near and medium-term. There is a variation from the idea that during a recession business reduce advertisement budgets. Governments have operated as advertisers in many countries especially in the U.S to spread messages about public health and provide a supporting frame to journalism.

The US advertising industry has risen steadily over nearly the whole of 2009 through 2019, but a sharp, unexpected fall in revenue is anticipated from the COVID-19 pandemic.

Advertising spend has changed in response to a change in consumer’s behavior as advertising without its audience holds no logical meaning. Since the introduction of control initiatives in the U.S, advertising out of the home and the theatre has almost instantly shrunk, even the printed ads also dropped. Television viewership mounted up as the in-home media usage increased. But the use of digital media showed an exponential growth as the use of social media, online gaming and other streaming services gained traction. Following customers, brands have evolved to give priority to digital ads. The online environment is conducive to "direct response" promotions – which promote fast customer transactions – an appealing proposition for brands that carefully invest and try to improve sales. “Facebook and Google reported sales in the first quarter higher than expected.”

“EMarketer recently predicted that in 2020 Google’s US advertising revenue will decline by just over 5% by end of the year. This is the first time, according to EMarketer, since 2008, that Google’s US digital ad revenue will decline”

                                                                                      - Forbes (New York)

Has Corona Virus affected all advertising Companies?

Brands foster visibility, sales and loyalty through media that are suitable for any objective. In general, small and medium-sized businesses rely more on customer-engagement channels. At the other hand, global brands are engaged in a variety of promotions, including ads focused at principles which are aligned with customer identities. The pandemic prompted U.S advertising firms all scales to analyze how they could execute advertisements. For some, this could mean reducing their costs such as in a survey, Fatpos reported that attracting consumers is their priority and that their marketing strategies are adopted by other groups. Networks such as television may not be the objective in the short term to work well for identity-oriented marketing.

What would be the long-term impacts?

The pandemic may have a long-term effect on the advertising market. For now, businesses in the U.S prioritize sustainability, but new ways of brand building will have to be sought in future. According to Fatpos Global, a direct response marketing strategy adopted by the US advertisement is likely to strengthen the hold of the digital platform as within the advertisement environment, they will be less vulnerable in comparison to others, allowing them to recover from the downturn sooner and stronger. Secondly, they have their data gathered during the crisis. It will give platforms a competitive edge in an industry in which every player is trying to understand customer preferences.