While the full effect of COVID-19 on the digital advertising market is not yet known, early data indicates marketers and agencies are taking a cautious approach, actively reviewing their plans and favouring brand advertising over performance marketing. 

IAB Australia ran a two-week survey of agencies and marketers to assess the impact of COVID-19 on ad budgets. It found 86 per cent of brands have changed their digital ad investment over the last month, with more than half of brands reporting they are reviewing their advertising plans at least daily.  

A fifth (21 per cent) of respondents indicated they have paused all their ad spend, 57 per cent have decreased some of their spend and 15 per cent have either increased or maintained their spend.

Source: IAB Australia

So is that money off the table for good? Of those who have decreased spend, some 31 per cent said they are delaying their spend, reporting they are still reviewing whether they will be in a position to invest later. One quarter are completely withdrawing the spend. 

The survey also noted there is much more agility and activity in the market. 46 per cent of respondents are reviewing their activity and strategies daily and just 1 per cent were operating ‘business as usual.’ 

Major government announcements, including various stages of lockdown but also stimulus packages, have also been the catalyst to review plans for 22 per cent of the respondents. 

“The Australian advertising market is in step with the global experience, with some brands simply not in a position to spend at the moment and the majority of other brands adjusting their spend, creative messaging and tactics to suit the current market,” said Gai Le Roy CEO of IAB Australia.

In the US, IAB research found there’s a very clear shift in brands to mission-based or cause-related marketing and local advertisers are encouraged to keep investing in brand messaging throughout this period. 

While 44 per cent of respondents who have decreased spend noted that this covered brand and performance equally, overall performance and tactical investments have been hit hardest compared to brand investment, according to the local IAB data, with companies adjusting their products and messages in this challenging market. 

The next IAB and PwC quarterly online advertising expenditure reports will be released in May and provide a broader picture of the digital ad market. 

Source: IAB Australia


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