IAB C19 BuySide Ad Spend Pulse FINAL [PDF]

x IAB Proprietary Research Coronavirus Ad Spend Impact: Buy-side3/27/20 1 IAB Proprietary Research2 EXECUTIVE SUMMARY: Buy-side Plans & Actions (1 of 2) •Nearly a quarter (24%) of respondents have paused alladvertising spend for the rest of Q1 & Q2 •Another 46% of respondents are adjusting advertising spend for the rest of Q1 & Q2 •Expect slightly less negative impact on Digital spend than on Traditional spend for Q1 & Q2, and a faster rebound for digital in Q2 •Impact on Q3 and Q4 spending is expected to be more modest •73% of buyers are indicating that the Coronavirus will have an impact on 2020/21 Upfront spend plans •Expect a 20% decrease in Upfront spend vs original plan 74% of buy-side decision-makers think Coronavirus will have greater impact on U.S. ad spend than the 2008-09 financial crisis IAB Proprietary Research3 EXECUTIVE SUMMARY: Buy-side Plans & Actions (2 of 2) What’s happening right now (March-June): •Digital ad spend is down 33% •Traditional media is down 39% •The majority (63%) of advertisers are adjusting their messaging and are increasing: oMission-based marketing (+42%) oCause-related marketing (+41%) •More than a third (35%) of advertisers are adjusting their in-market tactics, and are increasing: oAudience targeting (+38%) oOTT/CTV device targeting (+35%) IAB Proprietary Research4 29% 43%24% 3% 1% Role Type of Company: Buy-side 29% 43% 24% 3% 1% C-Level, President, EVP SVP, VP, Director Manager, Account Executive, Media Planner or Buyer Media Consultant, Media Strategist Other Staff: e.g., Analyst, Associate, Assistant, Coordinator Who we surveyed To understand how and where US ad spend is being impacted, IAB conducted a quick pulse of the buy-side: March 18-24, 2020 N=390 completes from those responsible for US advertising spend in 2020: §media planners §media buyers §brands 58% 42% Agency Brand IAB Proprietary Research5 Breakdown of Respondents by Category *Other Categories include: •Media •CPG –Cosmetics and Toiletries •CPG –Household Products/Other •Restaurants •Retail –online •Pharmaceuticals & Remedies (OTC/DTC) •Beer, Liquor and Wine •Fitness and Wellness 9% Travel & Tourism 8% Health/Healthcare (Non OTC/DTC) 7% Automotive & Related 7% B2B 6% Apparel/Fashion 6% Technology 5% CPG Food/Beverage 5% Financial Services 4% Retail (Brick & Mortar) 4% Education/Government 39% Other* Respondents to this survey were comprised of both agencies and brands which represent a wide spectrum of U.S. advertising categories: •Politics, Organizations or Public services •Consumer Electronics •Jewelry & Watches •Real Estate •Gaming •Telecommunications •Energy •Toys and Hobbies •Baby, Child or Parenthood-related •Misc.100% Buy-side Respondents IAB Proprietary Research6 Potential Impact Compared to 2008-2009 Financial Crisis Base: Those that can compare n=296 Q: Please compare the potential the impact of this Coronavirus outbreak on US advertising spend against the 2008-2009 financial crisis. In the long-term, which one statement best reflects your outlook? 44% 30% 9% 14% 4% Comparison to 2008-2009 Financial Crisis Substantially more negative impact Somewhat more negative impact Roughly the same impact Somewhat less negative impact Substantially less negative impact Overall, 74% of Buy-side Decision-makers Anticipate Coronavirus will have Heavier Impact on US Ad Spend than 2008-09 Financial Crisis IAB Proprietary Research7 Base: n=390 Q: Are you making any short-term advertising spend changes as a result of Coronavirus? (Note: short-term = March through June) 46% 24% 14%16% % Making Short-Term Ad Spend Changes Yes, we’ve adjusted advertising spend Yes, all advertising is paused where possible until further notice No Still to be determined March –June 2020 70% of Buyers Quickly Adjusted or Paused Their Planned Ad Spend Between March-June IAB Proprietary Research8 Short-Term Impact is Greater for Traditional Media -35% -28% -43% -38% Estimated Percent Change in Ad Spend, Digital vs. Traditional Media off annual plan Buy side expects to increase spending in May/June but not rebound to original plan Traditional Media Digital Media March/April May/June March/April May/June IAB Proprietary Research9 Base: Yes to short-term advertising spend changes, n=272 Q: Please provide your estimated percent change (+/-) in U.S. media spend per channel for the March/April time period. Q: Please provide your estimated percent change (+/-) in U.S. media spend per channel for the May/June time period. Ad Spend Impact by Channel (against original plan) -21% -23% -38% -31% -26% -28% -30% -33% -45% -40% -37% -41% Estimated Percent Change in Ad Spend by Channel March/April May/June -29% -41% -34% -35% -35% -34% -51% -43% -45% -41% Digital Display Digital Video Digital Audio Digital OOH Social Media Paid Search Linear TV (Broadcast & Cable) Terrestrial Radio Print Traditional OOH Traditional Direct Mail IAB Proprietary Research 42% 41% 37% 28% 45% 46% 32% 27% 14% 14% 31% 45% Mission-based Marketing Cause-related Marketing Brand Equity Performance Marketing Type of Messaging Strategy Change Increase No Change Decrease 10 March-June Messaging Strategy Shifting Away from Performance Base: n=390, Yes to advertising messaging strategy changes, n=245 Q: Are you making any short-term advertising MESSAGING STRATEGY changes as a result of Coronavirus? Q: Please indicate whether you plan to increase, decrease or make no change regarding usage of any of the following messagingstrategies. 63% 20%17% % Making Advertising Messaging Strategy Changes as a Result of Coronavirus Yes No Still to be determined Note: Short-Term = March through June IAB Proprietary Research11 42% of Buy-side are Making March-June Tactical Changes Base: n=390 Q: Are you making any short-term advertising TACTICAL changes as a result of Coronavirus? 42% 35% 23% % Making Advertising Tactical Changes as a Result of Coronavirus Yes No Still to be determined IAB Proprietary Research12 March-June Changes Include Audience Segments and Devices Base: Yes to advertising tactical changes, n=164 Q: Please indicate whether you plan to increase, decrease or make no change regarding usage of any of the following tactics. 38% 35% 34% 29% 28% 27% 23% 18% 13% 9% 46% 50% 55% 52% 55% 59% 57% 55% 58% 71% 15% 15% 11% 18% 17% 14% 20% 27% 30% 20% Audience targeting OTT/CTV device targeting Mobile/Tablet device targeting Programmatic buying Demo targeting Desktop/Laptop device targeting Local geotargeting News publishers and/or news content targeting Direct buys with premium publishers National geotargeting Types of Tactical Change Increase No Change Decrease IAB Proprietary Research13 Base: n=390 Q: Are you making any short-term advertising spend changes as a result of Coronavirus? (Note: short-term = March through June) Q: Are you making any advertising spend changes in the second half of 2020 as a result of Coronavirus? 25% 8% 67% % Buyers Making Ad Spend Changes in 2H Yes No Still to be determined Second Half 2020 For 2H 2020, 2/3 of Buyers Are Undecided IAB Proprietary Research 75% 88% Q3 Q4 Estimated Spend Change vs. Original Plan 14 Base: n=390; Yes to 2H 2020 advertising spend changes, n=98 Q: Are you making any advertising spend changes in the second half of 2020 as a result of Coronavirus? Q: Please provide your estimated percent change (+/-) in U.S. media spend by quarter. 25% 8% 67% % Making Advertising Spend Changes in 2H as a Result of Coronavirus Yes No Still to be determined 2H 2020 Appears to Be More Optimistic IAB Proprietary Research15 In Addition, the TV Upfront Season is in Jeopardy Estimate that Coronavirus will have an impact on 2020/2021 TV Upfront spend commitment 73% -20%Is the average estimated impact on TV Upfront spend this year Base: n=390, TV Upfront commitment estimated change n=283 Q: Please provide your estimated percent change (+/-) that you anticipate Coronavirus will have on your 2020/2021 TV Upfront spend commitment? IAB Proprietary Research16 Brands & Agencies Will Look to Key Milestones to Calibrate Response Base: n=390 Q: What external events and other indicators are you tracking that may impact your view of the U.S. advertising market? Select all that apply. 65% 62% 49% 47% 44% 38% 38% 33% 19% 17% Quarantine status Shelter-in-place initiatives Number of Coronavirus cases Business openings / closings Stock market performance Sports Travel The Olympics Concerts & other live events TV Upfronts across publishers Top 10 Events “I Am Watching” IAB Proprietary Research17 Selected Verbatim Quotes from Our Survey Timing of the recovery will determine our spend level... we are not optimistic on a short-term recovery. —C-Level, President, EVP Travel& To urism(airline, cruiseline, tour operator, visitorbureau, etc.) Demand is lower, so performance tactics aren't scaling as they used to. —SVP , VP , Director Agency; Retail Clients We have reduced spend considerably but are fairly agile and will respond/adjust in real time based on results. —C-Level, President, EVP Apparel/Fashion Brand Waiting to see impact of Coronavirus on scheduling of summer & fall amateur sport activities. --SVP , VP , Director Fitness/Wellness Brand IAB Proprietary Research18 We Are Keeping Our Eyes On… 1.When will sports return? 2.Where will the Olympics money go? to e-sports? 3.Will non-linear ad spend (OTT/CTV) rise to meet the growth of consumer usage? 4.Will performance marketing have a rebound in 2H? 5.Will there be any shift in support for news? 6.What are the spend differences by vertical category? IAB Proprietary Research19 About Us The Interactive Advertising Bureau (IAB) empowers the media and marketing industries to thrive in the digital economy. Its membership is comprised of more than 650 leading media companies, brands, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions.IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. 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