COVID: Should We Stop Advertising?

COVID: Should We Stop Advertising?

In this guest post, Jason Renwick (pictured below), a programmatic manager at Dentsu, casts his keen eye over the disruption COVID-19 has caused to ad spends and, somewhat unsurprisingly, argues that ad-tech should be the industry’s answer to all the flux and change…

There’s nothing like a global pandemic to keep us on our toes. For almost all in our industry, none would have had the tools, or the insight, to best understand the consequences and repercussions of pausing marketing activity at the mercy of a virus; but nonetheless, many did.

In fact, according to BlueMedia Research Group some 61 per cent of advertisers significantly reduced budget during the pandemic, and another 16 per cent were unsure whether they would adjust budget in the future. However, let’s look at the cases where advertisers have continued to advertise, and succeeded in times of economic downturn, as well as the massive opportunities this event presented for brands who are still fighting for our attention today.


Firstly, the industries who saw the biggest change to their ad spend as the COVID bell struck in March.

Credit: PubMatic

For News, we shouldn’t see this as a surprise as COVID pushed our attention to constant updates from health organisations and articles from our major networks. As for Hobbies and Interests, c’mon we all did a little extra spending when we stopped taking the bus and train to work; Nintendo Switches were sold out everywhere and every second Instagram story was someone building a home gym in April #fitness2020.

For industries like Travel it is not a surprise that their spending would reduce massively, this was inevitable, but for those still standing, should they stop spending? If they spend, are they fast-tracking bankruptcy with almost no revenue flowing into the business? Well, we have a century of proof demonstrating that the businesses that continued advertising during economic downturns yielded a stronger recovery than those who hadn’t.

During the Great Depression of the 1920/30s Kellogg’s doubled its marketing budget, yielding an extra 30 per cent profit and succeeding as the new number cereal of its time and still today. Anyone heard of ‘Post’ Cereal? Me neither.

The Global Financial Crisis in 2007/8 devastated the global economy, yet Toyota advertised aggressively over its international counterparts and in turn became the number one car manufacturer in the world post-GFC.

But the year 2020 looks very different to how it did 100 years ago, even 12 years ago. In our digitised world economy, we are faced with fierce competition fighting for a small percentage of market share. So, how can we capitalise on the current situation?

Look no further than Programmatic. The realm of real-time bidding binds us to the laws of supply and demand, and a partial exit of 61 per cent of the industry presents a massive opportunity. In Australia alone there were 660 million more daily online video ad opportunities in March versus January, as working from home gave us more hours in the day to consume media.

This over-abundance of supply and lower competition means the following:

  1. Lower CPMs as we do not have to bid aggressively to compete in the market
  2. We can achieve higher reach as we can spread our bids across more unique users.

A further benefit of programmatic in this space is fluidity in its ability to shift budget to audiences and inventory to match consumption in moments providing advertisers added flexibility in uncertain times.

Industries less affected by COVID have a greater opportunity to win SOV due to the changing media consumptions and behavioural habits, this much is plain and simple. For those who are directly affected; the secret lies in creative relevance and long-term brand building. At a time where sales and ROI aren’t as favourable, making a personable connection with consumers, that outlives the current crisis, becomes ever more prevalent, by means of recourse for success in economic recovery. A great example achieving this is the Qantas drawing of its famous Kangaroo for the last 747 flight of its fleet. So, provided a business has access to the liquidity necessary to sustain a brand message in the market, (either existing or borrowed), they should absolutely continue to advertise during COVID.

As an industry it’s our responsibility and duty to be as adaptive and responsive to market changes as possible and ad-tech is the biggest facilitator of this.


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Dentsu Jason Renwick

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