How COVID-19 is impacting digital ad spend

IAB survey shows advertisers are changing their digital ad spend in response to the ongoing COVID-19 crisis shuttering businesses and stalling the economy

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covid-19_coronavirus_abstract_by_martin_sanchez_cc0_via_unsplash_2400x1600-100836028-orig.jpg

Some 86 per cent of brands have changed their digital ad spend over the last month, with more than half reporting they are reviewing advertising plans on a daily basis, according to the COVID-19 Digital Ad Impact survey conducted by IAB Australia.

It’s a case of the local Australian situation mirroring similar changes seen around the world as the coronavirus crisis stretches across the globe.

Commenting on the findings, IAB Australia CEO, Gai Le Roy, said “the Australian advertising market is in step with the global experience".

"Some brands are simply not in a position to spend at the moment and the majority of other brands adjusting their spend, creative messaging and tactics to suit the current market,” she said.

The results also reveal 21 per cent of respondents have paused all their ad spend, while just over half have decreased some of their spend and 15 per cent have either increased or maintained their spend.

IAB Australia noted some encouraging signs in the results. For example, of those who have decreased spend, a third reported delaying spend reporting because they are still reviewing whether they will be in a position to invest later.

“While it is very hard to predict too far out with so many unknown variables, Q2 online advertising expenditure will obviously be impacted heavily,” Le Roy told CMO.

In terms of the advertising mix, almost half of respondents who have decreased spend noted it covered brand and performance equally, and overall performance and tactical investments have been hit hardest compared to brand investment, with companies adjusting their products and messages in this challenging market.   

When it comes to ad channels affected by the change in ad spend, digital out-of-home has been hardest hit, followed by programmatic and direct, while social and search have been least affected.

This special survey, which ran over two weeks and comes at a time of unprecedented disruption and uncertainty, was issued by IAB to advertisers and agencies to understand their ad investment intentions for the coming months. 

It provides a quick a quick read of the digital ad market ahead of the robust quarterly online advertising expenditure reports, which will be prepared by IAB with PwC as per usual and due to be published in May.

Le Roy pointed to ongoing restrictions, in terms of travel and activities, along with a broader economic downturn into the second-half of the year, which will impact on expenditure, but there are still positive signs.

"Many advertisers are still referencing that they are delaying marketing spend rather than withdrawing budget, so we will see a solid amount of activity within the market as the benefits of the Government stimulus packages flow through into Q3 and Q4.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.


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