With the Covid-19 pandemic, companies had to adapt to the new reality that will likely continue for months. For some, the “new normal” will mean changes in a lot of areas of business, including advertising.
Advertising during a recession
As past recessions show, there is a direct link between the state of the economy and advertising spending. And for a lot of businesses, marketing is the first thing to cut back on during tougher times.
After the credit crunch in 2008, ad spending in the U.S. dropped by 13% in general, with a 22% fall in radio advertising (second after newspapers), and only 2% in online advertising. But studies have shown it’s a good idea to keep advertising during a recession to power through it and reap the benefits once it’s over.
This time, experts predict advertising spending will be most impacted in Q2 and then slowly regaining in H2. The channels most likely to take a hit are:
- social media
- digital video
- linear broadcast TV.
Food, cinema, and travel will be the hardest hit industries, followed by retail, automotive, and finance/insurance.
According to Way to Grow, the industries that have already cut back on programmatic ad spending the most are travel and tourism, real estate, and jobs and education. The thing is, as we can see from past crises, brands that cut marketing spending during a crisis can hurt their business in the long term.
Why invest in programmatic ads now?
Some industries have increased programmatic ad spending during the Covid-19 pandemic, like mobile apps, computers, and electronics, or internet and telecom. The companies that haven’t stopped investing in ads, or even increased their ad budgets, are more likely to be better off once the recession is over, leaving the ones that did cut back far behind.
There are several reasons why it might be a good time for you to invest in ads if you have the budget:
- The competition is usually lower during a recession, with lower noise levels. It’s easier to get through to your audience. Plus, it’s also a good time to innovate.
- You can show your customers you’re a stable company that has its ways to cope with a recession.
- The cost of advertising usually drops in a recession.
- Companies that reduce their ad spend lose their share of voice in their category, which leads to losing their share of the market (and ultimately, profits).
Why invest in programmatic audio?
With fewer companies advertising in general, programmatic audio ads have multiple benefits that can be used to increase not only brand awareness but also sales and revenue.
- They’re cost-effective – and much cheaper to produce than video ads.
- They have multiple targeting options, just as other programmatic ad channels, with the same levels of measurability. This means you can optimize and increase their performance as you go, and make sure your ad dollars (or pounds) are well spent and bring the expected ROI.
- They’re effective – they’re a great way to engage listeners and keep them thinking about your brand. And get them ready to buy from you when all of this is over.
- If you’re in an industry that’s in demand right now, you probably won’t have to wait for the results until the end of the recession. Programmatic audio ads are directly tied to high conversions, and they can help you sell your products and services online right now, while people spend most of their time home and turn to stream services, podcasts, and online radio for entertainment.
Who can benefit from programmatic audio ads?
- Companies offering any kind of online collaboration tools, remote work solutions, and other SaaS platforms are now in high demand.
- E-commerce stores selling computers and other electronic supplies people are now buying to equip their home offices (and home cinemas).
- Other e-commerce businesses still operate and ship their products.
- Online food delivery chains.
- Mobile apps and gaming.
- Consulting services like legal, marketing, etc. that people still need.
- Virtually any brand needs to stay in their customers’ minds.
So if you’re in a position to keep advertising and innovating, programmatic audio ads can contribute to your company’s growth – if not during the pandemic, then once this whole thing is over, and your customers keep you top of mind, because you didn’t stop advertising.