Marketing 2 min read

How the Current COVID-19 Pandemic Affects Ad Spend

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Vestery /

The effect of the current COVID-19 pandemic cuts across various industries. But how does it affect ad spend?

According to a Bloomberg report, the coronavirus could cost the global economy a whopping $2.7 trillion.

Like other sectors of the economy, marketing and sales have been on the decline. That’s because consumers are saving more money due to fear of unemployment.

According to the Labor Department‘s job market report, the U.S. has already lost over 701,000 jobs. What’s more, this number will further increase, with recent estimates suggesting that the unemployment rate could reach 32 percent.

Indeed, the effect of the pandemic is widespread. However, let’s narrow things down a little and consider how the crisis affects the ad spend.

How the Coronavirus Pandemic affects Ad Spend

Advertising is all about measuring return-on-investment (ROI). Unfortunately, consumers aren’t just spending much at the moment.

According to a March estimate from Statista, the advertising industry could suffer as much as $26 billion in revenue due to the pandemic. That’s a 10 percent decline in revenue.

Furthermore, advertising professionals predict a 50 percent decline in ad spends across all channels.

The current crisis has significantly impacted the traditional out-of-home advertising, with a 41 percent ad spend in March and April. Digital media, on the other hand, is still hanging around 40 percent.

Paid search and social media have experienced the least decline, with 30 percent and 33 percent, respectively.

An emarketer forecast shows a similar result. The report noted that the global ad spend is down $20 billion from the beginning of the year. It also suggested that marketers will focus more on email and PPC.

According to the Amperity crisis tracker, retail demand has dropped by 86 percent, primarily due to the closing stores. Similarly, online sales are on the decline, dropping by 70 percent.

But, the reports are all doom and gloom.

For example, the Beauty and Health sector is showing signs of growth during the current crisis. Likewise, analysts expect the tech sectors to enjoy more ad spend as more people rely on technology to work remotely and adapt to other new measures.

Ad spend is down across various channels due to the COVID-19 crisis.

However, rather than completely cutting efforts, experts suggest focusing on more resilient channels. These include social media, email, and paid search.

Read More: Coronavirus to Impact Advertising More Than the 2008 Recession

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Sumbo Bello

Sumbo Bello is a creative writer who enjoys creating data-driven content for news sites. In his spare time, he plays basketball and listens to Coldplay.

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