GroupM has issued an update for marketers and advertisers amid the coronavirus outbreak, warning ad spend might fall while flagging the possibility of a recession.
The three page update, written by GroupM global president of business intelligence Brian Wieser (pictured below), indicated the “uncertain” impact coronavirus will have on the advertising industry and how it will affect not just aspects of the ad business, but also global events, like the Tokyo Olympics.
Wieser said: “Many aspects of life and business will be altered in many countries around the world. As we have seen in China we would expect to see less travel, less manufacturing, reduced retail sales and cancellations of many forms of public entertainment.
“Media consumption at home will likely rise as will e-commerce sales, although because so much of the world relies so heavily on China to manufacture finished goods or components of goods, supply chains will likely be compromised.”
Wieser also said the possibility of a recession is “realistic”, but said it’s too soon to anticipate how it will affect advertising spending. He said, however, it is “highly likely the impact will be negative, with growth in some countries softening, others going flat and others declining”.
Marketers who can avoid making cuts will fare better, Weiser noted, given what will likely be relatively favourable pricing and reduced competition for consumer attention.
“Longer-term brand-building will benefit from a sustained media presence, albeit with appropriately modified messaging,” he said.
And, as concerns about the impact of a global pandemic rise, there has been plenty of industry speculation over whether annual events will be cancelled, including the advertising industry’s Cannes festival and even the Tokyo Olympics.
On Saturday, France’s ministry of health banned public gatherings of 5,000 people or more. While Cannes Lions doesn’t start until June, the event’s organisers have already added a notice about the coronavirus to the top of its home page, noting their “priority at this time is the safety of our delegates,” and that it will be closely monitoring the situation.
The Tokyo Olympics is another point of concern, as many of the trial games have already been postponed or cancelled.
At this stage, the Games will be going ahead, however, if they were to be cancelled, it is unclear just how broadly it will impact brands and advertisers. Locally, it would certainly be a massive headache for Seven, who has created its entire strategy around its broadcasting of the Olympics.
Seven recently posted a $67m loss with debt of over $550m, more than double the company’s market cap, while last Friday its shares slid to record lows of 16c.
The International Olympic Committee has set aside $981m for broadcasters if the Games are cancelled or postponed. The issue for Seven, however, would be the loss of advertising deals.
In terms of 2019-20 network upfront advertising deals, the networks are keeping an eye on third-quarter cancellation options, where advertisers have the option to cancel as much as 50 per cent of their upfront ad buys. Typically, those options need to be exercised 60 days before the beginning of the quarter.
On which media will be most impacted by the coronavirus pandemic, Wieser said it’s too soon to tell.
“If the volume of available budgets for spending on advertising weakens in any given country, it is difficult to anticipate which specific media will be most impacted.”
He said that certain media could benefit from the lifestyle changes associated with a public health concern, especially TV.
“Traditional television could fare relatively better because of the likely improvements in audience levels, while outdoor advertising may be worse off with lower levels of foot traffic in many places.”
He added: “At the same time we emphasize that spending on paid media will not necessarily correlate with spending by marketers on services, such as those provided by agencies.”
Luisa Dalli (lead image) is a senior strategist at Havas Media Group. In this guest post, Dalli says Australia didn’t merely elect the Albanese government but it also shone a bright light on where we are and what we want as a nation… It’s been two months since Australia’s federal election, yet the underling feeling […]
In uncertain times, trusted sources become even more significant in the world of media. Elise Bennett (pictured), head of account management (APAC) at Outbrain, reveals what advertisers need to know about the new trust exchange. Instability breeds uncertainty. From bushfires to the pandemic and war, there’s been plenty of both to go around in recent […]
Independent SEO agency Optimising has further reinforced its commitment to the environment by being part of 1% for the Planet, on the back of it gaining B Corp Certification last year. Optimising continues to walk the walk around environment sustainability by being part of the global movement, which inspires businesses and individuals to support environmental […]
Media and communications staff at all levels are invited to take part in a national online survey examining perceptions and practices around cultural diversity, inclusion, and representation in the industry. The FAIR survey, now in its second year, provides a snapshot of cultural diversity in the communications industry, as well as how practitioners incorporate diverse […]
PubMatic has announced a partnership with AlikeAudience in Australia, Japan, and Indonesia, enabling advertisers to access quality audience data on the supply side. Activating data on the supply side cuts down complexity and delivers more efficiency and value for both media buyers and data owners, through higher match rates and better CPMs. The partnership expands […]
Live streaming service Optus Sport will be showing all major games of the Spanish La Liga Santander and the LaLiga SmartBank, giving football fans an extra reason to become subscribers. The Spanish Football League is considered one of the greatest in the world, containing the likes of European champions Real Madrid, Catalan giants FC Barcelona, […]
In the recently launched campaign for TVNZ+, Dentsu Creative, and Sweetshop’s Damien Shatford, have delivered an entertaining look at the new streaming brand, TVNZ+. TVNZ launched the reimagined streaming brand last week to better reflect its digital offering, repositioning the platform as a streaming destination rather than an OnDemand catch-up service.
Ruffie Rustic Foods have teamed up with Nikki Van Dijk and Surfing Australia to encourage groms to be kind to their bodies and minds through providing nutritious, plant-based meal options. Ruffie Rustic Foods are on a mission to prove that plant-based eating can be easy and convenient, without compromising on flavour. Whether you’re vegetarian, flexitarian, […]
Nestlé Australia today launched Tuck In!, a program supporting emerging First Nations creatives to establish career pathways in commercial content creation. Tuck In! invited First Nations chefs and aspiring content creators to develop recipe and video content celebrating the combination of bush foods and Nestlé products. Nestlé Oceania marketing & communications director Anneliese Douglass said […]
The UK Ministry of Defence confirmed that the British Army’s Twitter and YouTube accounts had been compromised by hackers who used them to promote their non-fungible token (NFT) products. The two accounts have since returned to normal, as the Ministry said via their own Twitter page. “The breach of the army’s Twitter and YouTube accounts […]