Advertising is going to be affected heavily by this dance. We’re already seeing the effects. Digital ad spend is down 38% in April, 41% on TV and 45% on radio. Billboards are down even further, estimated around 51%.
As restrictions are eased, what happens next depends on the economy and whether Americans have confidence to spend or are going to be focused on stashing money away for a future day.
Digital media would be the first to rebound since it is easy to launch, easy to manage and the content in digital is always fresh. It also doesn’t hurt that many people will still be spending more time at home, even as restrictions are lifted. The “new normal” will still involve a prolonged set of restrictions on the sizes for gatherings, wearing masks in public, and more. Those will deter some people from engaging in society too much, while others test the boundaries.
advertisement
advertisement
TV would likely be the next channel to rebound, but for TV to come back with ads, we need original programming to come back. Most networks and cable shows are on pause due to the restrictions and development or filming has not restarted.
Once the restrictions are lifted, there’s a lag effect before the ad dollars return. The ad dollars will come when the shows are launched, so that could easily be three to four months. That throws the traditional TV schedule into a new paradigm, with the fall schedule being pushed to the new year while this past spring is shifted to summer and early fall. As for the upfronts, they are a thing of the past at this point. COVID-19 may have pounded the proverbial nail in the coffin for the upfront TV model.
Radio and outdoor billboards are going to be more of a challenge. I think there could be some very interesting models that pop up as innovation takes center stage. Terrestrial radio may not return in the same way, while streaming and podcasts will likely continue to grow.
Billboards rely on traffic, and traffic implies people are on the roads and going to work. That is a questionable idea, but I do see opportunities for other types of OOH within a neighborhood or community model. My theory is that people will venture out, but stay close to home. Communities will become more important because the restrictions will permit communities to engage, but will limit intra-community activity for fear of flare-ups that spread quickly.
As I mentioned before, all of this depends on consumer confidence coupled with the easing and maintenance of restrictions that get the economy moving and people spending again. Until that happens, this is all conjecture — and about as valuable as that monthly parking spot you pay for at BART or MetroNorth.
Here’s hoping the easing of restrictions that some states are executing this week goes well. Maybe our new normal can finally get back to some of the original state we used to call “normal.”