Large multinationals are likely to cut harder and hold back ad spending for longer, according to the latest World Federation of Advertisers Covid-19 Response Tracker.
The second wave of the research found that 89 per cent have deferred campaigns, up from 81 per cent in March, with delays likely to last much longer than previously planned.
Fifty-two per cent of large multinationals surveyed will now hold back ad spend for six months or more, compared to just 19 per cent taking similar medium-term action in March.
While 68 per cent have some kind of crisis response campaign now running (up from 32 per cent in March), this activity will not compensate for the cuts to other campaigns.
Global ad budgets are now expected to be down 36 per cent in the first half of the year (up from 23 per cent in Wave I) and 31 per cent for the full year.
Wave II was conducted in the last full week of April and attracted responses from senior marketers in 38 companies across 17 sectors with a total annual global spend of $US46 billion. Sixty-one per cent of respondents held global positions with 39 per cent in regional roles.
While 62 per cent of respondents agree that it’s critical for brands not “to go dark” during the crisis, they are still making dramatic cuts to spend overall. The squeeze is being felt hard by TV, traditionally the biggest media channel and expected to be down 33 per cent globally across the first half of the year, although print (down 37 per cent), out of home (down 49 per cent and events (down 56 per cent) are suffering more.
Digital is boosting its share of ad spend by virtue of the fact that spend falls in this area are less dramatic, with online video down seven per cent and online display down 14 per cent. Other channels such as radio (-25 per cent), point of sale (-23 per cent) and influencer (-22 per cent) are expected to experience significant cuts.
While global marketing teams are taking drastic action on the number of ads seen by their target consumer audiences, they are also viewing the situation as an opportunity to make radical changes to the way they operate as marketing organisations both internally and in partnership with their agencies.
Ninety-two per cent agree that this crisis will have a long-term impact on the way they operate and 84 per cent agree that this is an opportunity to ‘rethink everything in terms of our marketing organisation’, with the same number saying it has already accelerated digital transformation.
Nearly two-thirds (63 per cent) are now focusing on developing strategies for the immediate post-crisis as well as for the longer term but in the interim 73 per cent agree they will have to find ways to support agencies during the crisis.
Stephan Loerke, WFA CEO commented: “Marketing leaders are fully aware that the crisis is having a major impact on their teams and their external partners. Many are making significant efforts to support their agencies by finding projects for their key people to work on while spend is low or by changing their payment terms when they can. Our research shows that such efforts are widespread and reflect how much brands value the contributions that agencies can make to their businesses.”
Please login with linkedin to commentWorld Federation of Advertisers
After ten years of board leadership of the young entrepreneurial collective Vibewire, Founder & Co-CEO of Disruptors Co. Gavin Heaton is passing the torch to fellow strategy and creative leader Jye Smith, Founder and Director of branding and design studio DOUBLESTAR CO, who will now take over as Board President.
Lexer, the Customer Data Platform for brands and retailers, today announced it has raised AU$33.5 million in Series B funding, bringing its total funding to AU$43 million. The round was led by Blackbird Ventures and King River Capital, with Series A investor January Capital also participating. Blackbird’s Rick Baker will join the Lexer board. The […]