Impact of Corona Virus on Advertising
The Coronavirus pandemic has impacted businesses across sectors. Many firms are hanging precariously on balance as sales are slumping, and advertising is the key to revival. But, the coronavirus has impacted the advertising too.
According to a recent survey, 69% of the brands surveyed are expecting to spend less on ads in 2020. They have already stopped spending on ads post-March this year. The reason is simple. Due to lockdown, these brands are unable to sell their products, and spending on advertising will put unwanted strain on their finances. Moreover, in the same survey, 65% of the brands expect their revenues to decrease.New Deals Are Not Forthcoming
The advertising industry may not revive soon. The global travel restrictions due to the virus have put the advertising industry in a precarious situation. Where the industry is predominantly dependent on in-person pitches, the travel ban is a disaster to the industry. New ad deals are not forthcoming and existing deals are not moving further.Halt in Production Work
Production work, the most important aspect of advertising, has ground to a halt. The restriction on people's movement has led to the Association of Advertising Producers (AAP), which does 90% of advertising work in India, to decide on halting all production work till easing of the restrictions.Major Ad-Time Events Are Not happening
Major sporting events that attract lots of investment in advertising have been either canceled or uncertain when they will happen. This is further straining the industry.
In India, IPL, the major sporting event that attracts huge investments in advertising, has been canceled. Also, businesses are not forthcoming with new ad deals. The advertising industry is in flux.Not All Industries Are Affected The Same
Also, from the survey, it is found that not all industries are affected the same due to the pandemic. For example, the luxury goods industry is faltering due to very low demand. The e-commerce industry too, which has changed the way we buy things, is deeply affected by the lockdown. Thus, we can expect less ad spends from luxury goods and e-commerce industries. But, we can expect more ad spending from essential goods industries, which are seeing a huge demand.Agency Operations Are Staggered
According to a top advertising company in India, the operations of ad agencies are staggered. Some have adopted online ways of doing things like asking employees to work from home and conduct virtual meets. These measures do not make them fully operational, but they can carry out a new marketing mode - digital marketing.
While some businesses have resorted to online marketing, with falling demand and dwindling sales, it is yet to see for how long these businesses invest in digital marketing.Bottom Line
In the end, we can say that businesses will spend less on advertising until clarity over the economy emerges. The short-term impact on advertising will be huge, and there is a lot of uncertainty about the future.