Beginning this month, companies that sell products to consumers are shifting ad dollars away from television and to the Internet, including Facebook, Google, and streaming services, where more people are spending more time during the lockdown.
“We’ve seen some great returns with Facebook and Instagram,” said Chris Brandt, chief marketing officer for the Chipotle Mexican Grill restaurant chain.
The shift began 1 May when advertisers’ contracts with television networks allowed ad buyers to cancel as much as half of their third-quarter purchases.
Companies taking the exit include Cracker Barrel Old Country Stores, Domino’s Pizza, General Mills, General Motors, and PepsiCo.
As a result, networks could lose as much as $1.5 billion in revenue later this year.
Advertisers are uncertain what television networks will be able to offer viewers this fall because program production is shut down and there is no schedule yet to resume it. Therefore, ad buyers are unsure how many people will see their ads.
Networks are hoping national sports leagues can mount a semblance of their normal seasons in the last half of this year, which could revive a significant amount of advertising demand.
This spring, TV networks have worked with many hard-hit businesses, such as hotels and restaurants, to help them cancel or postpone their scheduled ads when the lockdowns were imposed.
As a result, in key categories such as cars, liquor, retailers, and pharmaceuticals, television broadcasters saw their revenue fall by about 30 percent from 17 February through 26 April, compared to the same period a year previous.
Some TV advertisers are postponing their ad buys; others are locking in their schedules now to take advantage of drastic discounted rates. All are negotiating greater flexibility into their ad contracts to ensure they can cancel purchases quickly if lockdowns continue or new ones are mandated.
TRENDPOST: In the “New ABnormal” world of fear, hype, and hysteria, new advertising means and messages will be essential reach a very different society.
In addition, in this rapidly changing new environment, the means and messages must continue to speak to the wants and needs of evolving and devolving populations.
What are they? How should they be implemented? We will continue to update you with the new trends to optimize as they emerge.
