So here we are, more than a month into lockdown and with no clear exit strategy, and media owners are wondering what on earth it all means for their businesses and the advertising clients that feed them.
This week we launched the second of our digital events, this time focusing on the future of TV advertising in the UK – something that was filled with enough talking points to fuel an entire two-day conference even before Covid-19 wrecked havoc across the globe.
Now, in a world already characterised by two horribly over-used words - uncertainty and disruption - we have even more to contend with.
One of the most striking of these Covid challenges is actually a paradox for all ad-funded media: the time we spend engaging with TV, radio, social and published content has risen sharply, yet the ad money that funds it is drying up.
Oh, how smug those ad-free subscription-model businesses must feel. Unless their USP was live sport, of course.
But all is not lost – so long as brands can be convinced that advertising through a downturn is the lowest risk strategy for them in the long run.
But before we get to that, let’s look at how being cooped up indoors has changed what and how we watch.
New figures published today by Thinkbox and Ipsos MORI show that TV viewing has soared 24% since lockdown began, taking the average time to 3 hours 40 minutes per day, per viewer.
That is an extra five hours per week now spent with the UK’s best brand building medium.
And what are people drawn to? Thinkbox and Ipsos say it’s a mix of comic relief and light entertainment (the audience for the first episode of the new series of ITV’s Britain’s Got Talent was up by 7%); nostalgia (Only Fools and Horses on Gold is up 20% year-on-year and Last of the Summer Wine on Drama is up 30%); and news, with viewing more than doubling in the first three weeks of lockdown as we all tried to stay informed.
TV viewing routines are also changing, with shared viewing on the rise (up 37% since lockdown began, compared with a 15% increase in watching TV alone).
Examples of TV shows that have seen significant jumps in shared family viewing include Channel 4’s Gogglebox (up 41%) and In for a Penny on ITV (up 47%). Sky Cinema is up 48%.
“Our media habits are dramatically changing as a result of the new situations we find ourselves in and it is vital we understand what those changes mean for the TV and advertising industries,” says Matt Hill, research and planning director, Thinkbox.
Hopefully these sorts of studies will help achieve this (and Thinkbox promises more), but there is still that issue of securing the ad money.
Marketing budgets suffered their worst reduction since the global financial crisis in 2009 as the lockdown has forced a dramatic cut to consumer and business spending, according to the IPA Bellwether.
Broad cuts have been made to all forms of marketing activity, and the current picture looks bleak.
What started as travel firms cutting ads has quickly spread to many other sectors as the pandemic has grown, and it is matched by a severance of new programming production.
However, many marketers are (currently) optimistic about the future. What we are dealing with is more of a natural disaster, many believe, and although the ad markets are expected to enter a recession later this summer, firms anticipate higher spending allocations over the next 12 months, signalling a strong level of optimism and suggesting that many companies plan to grow their businesses.
Of course we really don’t know how things will pan out, and every economic forecast that comes across our desks is laden with caveats about possible revisions and unknown variables. But most tend to agree that we should hope for a more upbeat end to the year.
For the muddled patch between then and now, ad-funded media owners are really going to need to work hard to share all the evidence from past downturns. And they will need to do so with a unified voice and with a better understanding about who is in the mood to purchase – just because you’re watching more TV, doesn’t mean you’re able to buy stuff. Millions of people are now unemployed, furloughed, or rightly nervous about their economic future.
But there are brands and sectors currently flourishing, and there will be new businesses being built because of the current situation.
There will also be a case for changing the advertising too – the ability of ads to connect with people will not diminish, but the mood of the nation has changed and could continue to change for better or worse, and the creative will need to adapt to this.
However, if a business is saving cash to simply survive, then naturally you’d expect marketing to be cut. But for the brands that have re-written their business plans in the expectation of survival but in tough conditions, they should know that ditching advertising usually means losing market share and longer-term profitability.
This is all quite well-established stuff now, so let’s hope it’s a message being heard and understood not just in marketing departments, but in boardrooms too.
“For brands that are able to adapt, we recommend holding your nerve and advertising where possible for the best long-term results,” says Nick Pugh, UK managing director for consultancy firm Ebiquity.
“Share of voice drives share of market, and brands that continue to invest in recessions usually come out stronger.”
Commercial TV viewing, according to Barb, is up 15% under lockdown and in previous economic downturns over the last 35 years the negative effect on TV adspend has been rather short, with the market always bouncing back.
Indeed, in real-terms, it has never actually dipped below 20% according to Warc data. However, in Q2 this year it will be down significantly more - Warc and Enders Analysis suggest between 30% and 50%.
It’s certainly going to be a challenge of epic proportions. For this reason, we are proud to be hosting an industry-wide digital event to explore the best strategies to deal with this exceptional situation.