Opinion: What the U.S. ad industry can learn from Italy's pandemic experience
The coronavirus pandemic hit European and Asian-Pacific markets first, with many brands halting advertising strategies and reducing partnerships in early March to curb financial losses. The sharp decline in ad spend then migrated, along with the virus, creating confusion in the U.S. market.
What now? As the U.S. advertising industry sets its sights on recovery after a harrowing few months, the coronavirus continues to redefine the way consumers behave and interact online. Age-old models need a facelift. What can we learn from the regions who saw this play out weeks ahead of us? Let’s explore the three trends that have taken hold in Italy, and what U.S. advertisers can learn from them as they aim to get back on track.
Online shopping is not a temporary bandage; it’s a permanent fixture
In Italy, shoppers are spending more time on their mobile devices and buying more online—habits that they think will extend far past the emergency phase. With most of the region still under some form of order to shelter in place, more professionals are working from home, where they are enjoying the comfort and safety that comes from avoiding crowded places.
In fact, 58 percent of Italian online shoppers bought groceries online for the first time in April, according to an April 2020 Nielsen Media report. And laptops and PCs are seeing the biggest spikes in product page visits, according to Italian eCommerce website ePrice. And when we look at our clients’ spending for traffic sources in the first three weeks of April, we see that the number of mobile visits has been between one and four times higher than those stemming from desktops.
While online ad value is notably on the rise, retargeting alone does not deliver as many impressions as when combined with mid-funnel activities. Marketers need to consider the audience they’re trying to reach, then make sure messaging is targeted to them.
In the post-pandemic era, marketers must shift from branding to direct forms of marketing that focus on the customer experience. By understanding what consumers are seeking and how they shop, brands can adopt a consumer-based marketing strategy—humanizing their brands gaining loyal customers.
As overseas markets reopen, digital advertising is on the upswing
There was a rapid and sudden market deceleration in the EU markets in March. The crash affected all media, with significant lags shown in those with high advance commitments. According to French reports, the market crash was far more drastic and sudden than those of previous recessions.
Digital advertising companies, initially confused about how to react, hoped that brands could turn their digital campaigns back on just as quickly as they turned them off.
There was a steep dip in digital ad spend in March, with little improvement expected until June. Yet an upswing began in the first three weeks of April, and the forecast is now for progressive improvement throughout Q2—an improvement that should follow to the U.S.
Healthcare is not the only vertical on the rise
In Italy, there was a predictable sales spike in healthcare products, but also in fashion, electronics and pet supplies. This highlights the opportunity for marketers to bond with consumers during this shared experience by adopting an organic approach over a more rigid sell formula across verticals.
Some advertisers and categories overseas even opted to increase spend across January and April, with the EU markets reporting a 42 percent rise in healthcare ad spend and 35 percent spike in fast-moving consumer goods and consumer products, according to IAB Europe Economic Trends Forum data.
No marketer knows when the crisis will end, and shouldn't pretend that it does. But they shouldn't stop advertising, either.
These trends are an opportunity for U.S. marketers to learn from their Italian counterparts, and for the global advertising community to breathe life back into marketing.