The Impact of Coronavirus (COVID-19) on Advertising Strategy
As the country grapples with the realities of the COVID-19 (Coronavirus) pandemic, advertisers are faced with an interesting dilemma. Should they increase their media spend due to the likelihood of larger audiences who are spending more time at home? Or, should they cut back on their media spend given organic increases in demand for certain products? To get an early read on the effect of the COVID-19 outbreak on advertiser behavior, we reviewed our Numerator Ad Intel data across four categories most likely to be impacted - Disinfectants, Paper Towels, OTC: Cold, Cough, Sinus and Personal Cleansing.
How has advertising spend changed for these categories?
While we do not see a dramatic shift in strategy shortly after January 20, when the first case of the virus was reported in the country, we are beginning to see a fairly steep increase in the first week of March across Disinfectants and Personal Cleansing. Both these categories were largely underspent in the month of February relative to last year. Paper Towels and Cold, Cough & Sinus have been consistently spending at higher levels when compared to the same time period last year.
While interesting, the above chart does not prove that these categories are reacting to the COVID-19 dynamics in real-time. To get a better grasp of possible outbreak-related advertising shifts let’s narrow in on the week ending March 8th, when widespread concern among the population began to grow in earnest and where it is most likely that advertisers could have started to change their media distribution and messaging strategy.
Across which media channels are advertisers increasing their spend?
Advertisers across all four categories have spent more against television with Disinfectants seeing the largest increase within this medium. While this may seem counterintuitive given the increased demand for these products, it is important to keep in mind that advertisers want to ensure that they are still driving strong brand associations. It is also worth noting that these categories tend to have a high proliferation of private label products, making it even more imperative for advertisers to distinguish their brands in the minds of shoppers.
Television is not the only medium with increased spend. The table below shows that brands are continuing to invest in digital media while scaling back on print and radio.
If this is true, why is there growth in Radio for Cold, Cough and Sinus?
The growth in radio within Cold, Cough and Sinus is driven by an increase in spend primarily in the New York City DMA. We know that, at this time, NYC was beginning to see an increase in known infections. This is the first piece of evidence pointing to a possible shift in strategy based on the COVID-19 pandemic and its acute impact in a populous market such as NYC.
Another interesting insight in this category is that 68% of the ad spend on mobile apps in 2020 is across news apps such as Fox News and the Huffington Post. This is an effective means of distribution given the current context and an increased propensity for shoppers to be looking at news apps through the day.
Have advertisers changed their messaging in response to the COVID-19 outbreak?
Our data shows no evidence of brands within these categories explicitly focusing on messaging around COVID-19. It is hard to produce new content for television at relatively short notice. In fact the increases in spend for television are driven primarily by P&G who launched Microban 24 in the Disinfectants category and executed a media blitz on Bounty within the Paper Towels category. It is unclear whether P&G would have done anything different in the absence of the COVID-19 outbreak - though it may be worth noting that Microban 24 is on the EPA’s list of products proven effective in killing the Coronavirus.
It is faster to create and distribute new content via digital channels. Clorox for example launched this new creative on February 24th with the emphasis on killing viruses and bacteria. To date, we have primarily seen this campaign run on Amazon.com.
As events continue to unfold in the coming weeks, we expect to see this data change significantly as advertisers are able to adjust messaging and produce new content. We will continue to monitor for shifts in messaging and spend, and will provide insights and updates into what we are seeing at a market level. Please work with your Numerator Representative for brand, category or media specific detail, or reach out to us for more information about our data.
- Mobile data includes 10,000 websites and 100 apps that are scraped for ads on a daily basis
- Online Display/Video is limited to data captured on desktops and laptops and does not include Paid Social ads
- Please reach out to your Numerator representative for a detailed understanding of our coverage universe