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WPP was the winningest of Madison Avenue's major holding companies during the first quarter of the year, both in terms of total new account wins, as well as gross billings, according to the latest edition of R3 Worldwide's agency new business report. The only holding companies to be under water in terms of net billings change were MDC Partners (-$4.5 million vs. Q1 2019) and Interpublic (-$9.9 million). WPP's overall billings growth was buoyed by the best new media account record during the quarter, fueled by big wins at its MediaCom, Mindshare and Wavemaker units (see below).
Global advertising spend is expected to see a steep drop of 8.1% this year -- with the travel & tourism, entertainment and financial advertising categories taking major hits. WARC Global Advertising Trends estimates there will be a $49.6 billion pullback to $563 billion this year due to “severe” cuts in media investment from the COVID-19 pandemic. Travel & tourism will see the worst declines -- 31.2% -- while leisure & entertainment will be down 28.7%, financial services will be cut back 18.2%, retail will fall 15.2% and automotive will lose 11.4%. With regard to financial services, the analysis indicates that this category will drop along with consumer spending, due to consumers “whose disposable income is now heavily diminished.” On the plus side, it says pharmaceutical marketers will gain. In addition, marketers in the areas of health care and well-being will include “brands not normally associated with the field.” Traditional media advertising spending will drop 16.3% -- for what amounts to a loss of $51.4 billion from 2019 levels. In-theater advertising spending will sink 31.6%, while out-of-home will decline 21.7%, magazines will lose 21.5%, newspapers will drop 19.5%, radio will fall 16.2%, and television will be 13.8% lower. Digital advertising spending is estimated to be virtually flat for 2020 -- up 0.6%. A previous February WARC estimate showed a 13.2% increase for 2020. The best-performing digital media platforms will be social media, up 9.8%; digital video, 5.0% more; and online search, adding 0.9%.
First-quarter 2020 showed (year-on-year) YoY advertising growth despite the impact of COVID-19 beginning in March -- but the pandemic did create significant pricing pressure on CPMs, with digital falling 16%. The industry remained relatively resilient in the first quarter of 2020. “The growth, about 12%, declined from 16% for the full year, but we think there was some slowing overall, excluding COVID-19,” said David Cohen, President of the IAB. “We found most companies didn’t feel the impact from COVID until mid-March and some didn’t feel it until late March. We’re not seeing the full impact, and we won’t until the second quarter.” The growth was driven mostly by video, along with social, as well as mature formats such as search and banner ads. The Interactive Advertising Bureau released its 2019 Internet Ad Revenue Report Thursday compiled by PwC, but this year the IAB also included separate insights on Q1 2020 revenue and the second edition of its Coronavirus Impact Report on publishers. CPMs did fall in the first quarter. Data from the second study of sellers in the IAB’s proprietary research reveals that COVID-19 put significant pricing pressure on the majority of sellers. In fact, two-thirds of sellers experienced a decline in CPMs. Publishers were hit the hardest, with six in 10 experiencing a decrease in CPMs -- a 14% greater impact on CPMs versus programmatic specialists. Display advertising also took a hit, with mobile and desktop experiencing more than a 30% decrease in ad rates. When it came to advertising by device, connected devices such as streaming sticks, gaming consoles and smart TVs showed the most resilience, with an expected decrease in CPMs of just 6%, while desktop, smartphones and tablets were down 27%, 28%, and 29%, respectively. From mid-March through today, IAB fielded five surveys showing the impact of COVID, including the comparisons from ad spending and ad revenue showing a decline in CPMs. “We’re seeing in this new CPM study that connected devices are experiencing the least impact,” said Sue Hogan, SVP of research and analytics at the IAB. She found it interesting to see how rapidly brands pivoted to change the messaging to mission-based or cause-related. In 2019, U.S. digital ad revenue neared $125 billion -- up 16% year-on-year, while Q4 2019 revenue rose 12.9% year-over-year, with key drivers such as digital video advertising across mobile and desktop rising 33.5% to $21.72 billion. Audio revenue grew 21.2% to $2.72 billion from the prior year. Hogan said advertisers and publishers indicated a decline for the rest of the year, as nearly 70% of advertisers paused or cancelled campaigns in the wake of the COVID-19 outbreak. She said media that provides flexible targeting and creative execution -- such as audio and search -- are better positioned in the near term to meet buyers’ needs as they make changes to adapt.
Email is the preferred channel choice for 45.3% of digital marketers in the UK during the COVID-19 lockdown, according to a study by ClicksInContext, a B2b lead-generation company. Next is SEO, chosen by 22.6%. This is followed by paid search, with 20.8%. Only 11.3% of digital marketers say they would choose “all of the above,” showing that firms may be taking a cautious approach during the lockdown, the company says. “With the country in lockdown right now, marketers might be taking a more targeted, personal approach, particularly to maintain relationships with existing customers or clients who may be unsure of the effect that coronavirus is having on businesses,” a ClicksInContext spokesperson states. The spokesperson adds that “it makes sense that email marketing is currently topping the list.” ClicksInContext surveyed over 50 digital marketers.