Advertisers say COVID-19 will hit harder than 2008 financial crisis: IAB report
The ongoing battle against the novel coronavirus pandemic paints a bleak picture among buy-side decision makers at media agencies and brands, according to a new report released Friday by the Interactive Advertising Bureau.
The IAB surveyed nearly 400 media planners and brands between March 18 and March 24 for its report, which says nearly three-fourths (74 percent) believe the coronavirus will have a greater impact on U.S. ad spend than the 2008 financial crisis. About 24 percent, meanwhile, said they have paused all ad spend for both the first and second quarters while nearly half (46 percent) have adjusted their media spend for the same time period, according to the IAB.
The findings are significant, as the IAB hinted back in October that 2020 could potentially be a down year. The industry has seen record-breaking growth each year since 1996, or since the IAB began tracking digital ad revenue, but saw a decline in 2009 when the U.S. economy was in a downturn.
The pandemic is expected to have a material impact for the entire 2020 calendar year, according to the report, which predicts a "rebound" in spending during the months of May and June, but a decline for the final six months of the year.
According to the IAB report, 63 percent of those who are still advertising have adjusted their messaging to focus on either mission-based marketing, cause-related marketing, building brand equity or performance marketing.
The report also reflects Disney, Hulu and Discovery pulling out of the forthcoming Upfronts, as 73 percent said the coronavirus will impact their spending plans for the Upfronts. Overall, the IAB says it expects a 20 percent decline in Upfront spend versus what was originally anticipated.
Interpublic Group’s Magna said yesterday it was slashing its advertising forecast for the year as marketers continue to grapple with the COVID-19 pandemic, stating that it anticipates a 2.8 percent decline in U.S. ad sales this year; it had previously predicted a 6.6 percent growth.