BUDGETARY IMPACT

• In a recent survey of almost 400 media buyers and brands, 74% believe the coronavirus pandemic will have a more detrimental impact on their advertising spend than the 2008 global financial crisis.
• The same survey found that almost 25% of respondents have paused all advertising for the first and second quarter of 2020, while another 46% have adjusted or plan to adjust spending during the first two quarters of this year.
•  20% of advertising buyers expect to decrease their spending when compared to their original yearly plan and 73% believe their budgeting for 2020 and 2021 will be affected by the COVID-19 crisis.
• However, 67% of those surveyed state that they have not yet made advertising spend changes for the second half of 2020 as a result of COVID-19 while 25% said they do plan to make changes at all.
• In terms of key indicators for managing marketing spend, 65% reported they're monitoring the COVID-19 quarantine status, 62% examining shelter-in-place orders, and 49% are focused on the COVID-19 patient statistics.
• One of the most stunning examples of change in advertising spend has been from global marketplace giant Amazon. The company has reduced its spending via Google Ads to 'almost nothing' in mid-March after a gradual decrease from January. This, however, is not due to budgetary pressures but rather a lack of need. As more people self-isolate they are turning to Amazon to deliver much-needed goods, as a consequence Amazon may feel that its sales figures are demonstrating that advertising is a superfluous cost in the current climate.

TACTICAL CHANNEL SHIFTS

• Whilst many are projecting reduced advertising spend, digital advertising is expected to fare better than other mediums, with protections for Q2 2020 down just 33% compared to the 39% decline for traditional media.
• Traditional out-of-home advertising is expected to take the biggest casualty of advertising spend, with an estimated spend decline of 51% for March and April and a decline of 41% for May and June. The rationale behind steps contributing to this trend is that far fewer people will be outside to see billboards and digital displays while they’re at home in government-advised isolation.
•  38% of media buyers plan to increase audience-targeting while 35% plan to increase device targeting for over-the-top media and connected TVs. This is explained by Interactive Advertising Bureau (IAB) President David Cohen as being due to the expectation that with reduced commuting, increased working from home practices, and self-isolation, media consumption, in general, will grow.
• In the United States, there has been a 29% increase in social media marketing activity since mid-February and 25% in gaming advertising. This likely reflects the distractions people social distancing at home are resorting to in their free time.
• The surge in television advertising is best exemplified by the car industry in the United States. Toyota, General Motors and Hyundai all unveiled new TV adverts in March 2020 which pivoted their marketing message to be coronavirus-centered.

Slashing Spending Forecasts, Inconclusiveness & Focusing on Short Term Investment

•  Brands are focusing their advertising efforts on the short term. This is primarily driven by the uncertainty related to COVID-19, the quarantine duration, and its future impact on industries and their advertising spend.
• Advertising giant, Omnicom remains uncertain about the impact of COVID-19. Since their last forecast, in December 2019, the company "reported cash and cash equivalents and short-term investments of $4.3 billion."
• Magna anticipates a 2.8% decline in the United States, attributing the buffer to the likely political spend in advertising this year.
• Leading advertising firms are revisiting their advertising spends. Zenith Group, for example, had initially forecasted a 4.3% decrease in ad spend.
• IPG also maintained a similar tone, with their Chairman and CEO saying that "in the current environment, visibility into marketing and media spend is extremely challenging".
• Some advertisers are planning to reserve more spending for the second half of 2020. 67% have "not yet made changes" for the third and fourth quarter while 25% plan on making changes.

Online Ad & TV Ad & Creative Campaigns

• There is still mixed opinions about online ad spend. According to one source, COVID-19 has caused a decrease in Google Ad spend because Google search impressions have changed since the outbreak. This means that advertisers will most likely not see a positive return on investment, with pay-per-click becoming expensive.
• Another source states that e-commerce increased their ad spend in the short term, on account of consumers gravitating towards online shopping of essential items during quarantine.
• For travel, retail and hospitality, there have been cut backs on media buys due to the decline in customer spending habits on non-essential items, and the dramatic decline in the travel and hospitality industries operations and revenue.
• Amazon is pulling back budgets on Google Ads, while wholesalers and liquidators experience "a 14% increase in CPC but a 9% increase in conversion rates."
• According to eMarketer, however, e-commerce ad spend doubled from February 17 to March 9 (from $4.8 million to $9.6 million). This is not expected to last, as eMarketer predicts that this was only a short-term spike.
• Some TV advertising professionals foresee an increase in TV ad spend due to the upcoming elections. An increase in on-demand media is a key driver for why advertisers remain optimistic about online and TV media.

Purpose-Driven Marketing Message Shift

• Some companies are simply changing their messaging approach, with advertisers being more cautious than ever. "More marketers also plan to switch to purpose-driven marketing, with 42% planning to increase their mission-based marking and 41% increasing cause-related marketing."
• General Mills has increased their marketing spend as they experience a surge in demand for their familiar products. They seek to keep their marketing as normal as possible, ensuring that their "messages are appropriate for the time." Instead of focusing on budget, they have decided to focus on their communications.
• These marketing message shifts include a focus on devices. 38% of advertisers "plan to increase audience-targeting while 35% plan to increase device targeting for over-the-top media and connected TVs."
• IAB revealed that 63% of advertisers "plan to change their messaging strategy." An example of this is IKEA Spain. The company launched a "stay at home campaign", suggesting that people rearrange their furniture. This is a reflection of the short term nature of approaching advertising within campaigns to resonate with what customers are going through.

Research Strategy

Apple Inc.

• The smartphone-maker canceled its long-awaited event, planned for late March, in response to the deadly coronavirus. "This event was a big part of their marketing strategy, originally planned to unveil two different products."
• Tweak Marketing, an authoritative industry publication, claims, without providing evidence, that major brands like Apple "have indicated profit warning and are already switching marketing budgets to digital marketing and streamed events rather than hosting large events."
• Apple announced that it had made cuts to its sales forecasts for 2020 due to a halt in production caused by the COVID-19 outbreak in China.
• Apple analyst Ming-Chi Kuo estimates that this halt in production will decrease iPhone shipments through Q1 by about 10%.
• The firm has partnered with Ad Council and the US government to design messaging that will help communicate life-saving messages to help combat the spread of COVID-19.

McDonald's Corporation

• McDonald's has adopted a 'to go' strategy in favor of social distancing, allowing it to promote its menu through its app, enticing customers to place their orders with exclusive discounts.
• The fast-food giant recently canceled its biennial franchise convention in Orlando due to the coronavirus outbreak, which will enable it to save about $25 million to $30 million in costs for planning.
• McDonald's recently closed all company-owned seating areas and PlayPlaces across the U.S. indefinitely in response to the novel coronavirus pandemic.
• The brand is also running a new video campaign to promote its drive-thru and delivery options, reminding consumers that their homes are now McDonald’s locations.

American Express

• Amerian Express is waiving credit card interest and late payment fees for both its business and personal cardholders affected by the coronavirus pandemic.
• Since the coronavirus outbreak, American Express's year to date shares has lost 30.5% compared with the industry’s decline of 22.5%.
• The CEO, Stephen J. Squeri, revealed that "travel-and-entertainment spending on AmEx cards has fallen sharply in recent weeks, though they didn’t give numbers."
• Amex also announced that it had made cuts to its sales forecasts and was not in a position to "forecast its future financial results beyond the first quarter" due to the uncertainties surrounding the coronavirus pandemic.

Research Strategy

Netflix, State Farm and HBO have all made shifts to their advertising budgets and strategies due to the Coronavirus outbreak.

State Farm

• No statements or articles directly addressing a shift in the advertising budget or allocation were found for State Farm. However, it was ascertained that State Farm has launched a new video campaign, "New Normal" and has begun focusing on goodwill and charity actions taken by the company in response to the Coronavirus outbreak. Additionally, it is possible that State Farm will have to shift some of their advertising budget away from events that have now been canceled due to the Coronavirus, like the 2020 Olympics.
• State Farm began running a new video campaign titled the "New Normal" which was released on March 27, 2020. The video features families at home and urges customers to contact their State Farm agent if they need assistance due to the Coronavirus, because State Farm is there "to help make this “new” normal, feel just a little more…normal."
• State Farm has shifted their marketing to feature goodwill and charitable actions taken by State Farm in response to the Coronavirus, including a partnership between State Farm and Time magazine with the slogan "Apart. Not Alone," State Farm partnering with the Atlanta Hawks and Goodr to address food insecurity in Atlanta during the Coronavirus outbreak, and State Farm matching donations up to $100,000 in partnership with The Tonight Show to support the American Red Cross during the virus outbreak.
• There is evidence that State Farm may have to shift some advertising due to large events being canceled. For example, State Farm has partnered with the new streaming service Peacock and as part of this partnership there was supposed to be advertising at the 2020 Tokyo Olympics, which have now been postponed. Additionally, State Farm has had major TV advertising scheduled during the 2020 NBA season, however, the new NBA season was suspended. In response, State Farm, ESPN and the NBA are now showing older reruns of games during ESPN’s NBA Wednesday Nights, at least through the end of April.

HBO

• HBO has increased their social ad spending and volume due to the Coronavirus. They state: "HBO Now has also stepped up its social ad game, and BrandTotal detected ad volume increases from March 11 to March 19. The streaming service is promoting its new content, such as the launch of the third season of “Westworld” and fan favorites like “Game of Thrones.” HBO Now has seen up to 40 percent day-over-day increases in ad impressions on YouTube, up to 20 percent on Twitter, up to 10 percent on Facebook and up to 5 percent on Instagram."
• The HBO experiential advertising event a recreation of Sweetwater, the world where the HBO show "Westworld" takes place, at South by Southwest was canceled, when the event being canceled due to the Coronavirus.
• Lastly, HBO has reported increased viewership on their streaming services, which had increased the amount of ad space that is available and eventually will therefore increase advertising revenue if the service can fill those slots.

Netflix

• In early March, Netflix increased their ad spend. Combined with Amazon Prime and Hulu, the ad spend for these streaming services increased by 155% in the first week of March 2020.
• Netflix had to suspend all production on new scripted series for two weeks in early March, and may extend the suspension. If these shows cannot be produced, they will not need to be advertised and therefore may cause a shift or decrease in Netflix's advertising spending.
• Netflix had to cancel its marketing at South by Southwest due to fears of the Coronavirus.

Research Strategy

GEICO

Article 1

•  This link is to an article about changes GEICO has made involving its ad spend/allocation, in response to COVID-19.
• The article was published by AdAge on March 16, 2020.
• The article discusses how GEICO removed its "Perfect High Five" TV spot, which received a lot of criticism on social media as the co-workers featured in the commercial were high-fiving, something currently frowned upon in light of social distancing practices. According to "[a] spokesperson at The Martin Agency[,] . . . the ad was pulled" on March 12, but according to iSpot.tv, March 15 was the last day the commercial aired.
•  This link is to the TV commercial that was pulled by GEICO.

Article 2

•  This link is to a publication that mentions how GEICO has responded via its ad spend/allocation due to COVID-19.
• The publication is a 19-page PDF from Ogilvy titled "What does coronavirus mean for brands on social media?"
• The section of the publication about GEICO discusses the importance for brands to be sensitive with their messaging during the COVID-19 pandemic. GEICO's "Perfect High Five" commercial was identified in the publication as an example of non-sensitive messaging.

Article 3

•  This link is to an article stating a change GEICO made in its ad spend/allocation, in light of COVID-19.
• The article was published by Kantar on March 18, 2020.
•  The article mentions that the aforementioned commercial was removed by GEICO, but no further information is provided about it, as other topics are also addressed in the article.

Article 4

•  This link is to an article that mentions a change GEICO implemented with regard to its ad spend/allocation, as a result of COVID-19.
• The article was published by Fast Company on March 25, 2020.
•  The article mentions that GEICO removed the aforementioned commercial after it received backlash due to the society-wide push for people to adhere to social distancing practices.

Article 5

•  This link is to an article in which GEICO is mentioned, as it relates to the company's ad spend/allocation in light of COVID-19.
• The article was published by the Wall Street Journal on March 23, 2020.
• The article identifies GEICO's "Perfect High Five" ad as one that was "meant to be clever", but due to COVID-19, was out-of-sync with societal messaging (social distancing).

Amazon

Article 1

•  This link is to an article that discusses changes Amazon has made with its ad spend/allocation, in response to COVID-19.
• The article was published by Tinuiti on March 17, 2020.
• The article discusses how Amazon has almost entirety eliminated its text ads and Google Shopping ads within the United States due to COVID-19.

Article 2

•  This link is to an article about changes Amazon implemented in terms of spending on advertisements, as a result of COVID-19.
• The article was published by Search Engine Journal on March 18, 2020.
• The article mentions that Amazon almost entirely eliminated its advertising overall, including its "spending on Google Ads" and "text ads after March 11."

Article 3

•  This link is to an article that discusses how Amazon has changed its ad spend/allocation due to COVID-19.
• The article was published by The Motley Fool on March 18, 2020.
• The article states that March 11, 2020, was the date on which Amazon began to significantly scale back its ad spend, as a result of the pandemic.

Research Strategy

The Coca-Cola Company

Coca Cola channels SG$4.2m ad budget towards COVID-19 measures in Philippines

• Link to the article.
• The Coca-Cola Company is stopping all of its "commercial advertising" in the Philippines in order to spend "its advertising space and budgets towards supporting COVID-19 relief" by providing SG$4.2 million (US$2,949,231) worth of protective equipment, beverage for health professionals, food packets to families, and financial support to small businesses.

Coke goes big with COVID social distancing in Times Square

• Link to the article.
• The Coca-Cola Company used its advertising space in Times Square in New York City to encourage social distancing amid the COVID-19 outbreak.

Coca-Cola GB suspends all marketing activity

• Link to the press release.
• The Coca-Cola Company is temporarily suspending its marketing in Great Britain because of the "economic uncertainty" the coronavirus pandemic has created.

How The Coca-Cola Company is Responding to the Coronavirus Outbreak

• Link to the press release.
• The Coca-Cola Company is redirecting $120 million of its advertising budget "for community relief programs, medical supplies and equipment during the outbreak phase."

Global brands change advertising to encourage social distancing in response to COVID-19

• Link to the article.
• Coca-Cola Great Britain thanked health professionals and people who are assisting with the COVID-19 pandemic by creating a Twitter ad where various titles take the form of a coke bottle.

Paramount Pictures

Viacom and Ad Council Debut #AloneTogether, a Social Campaign About Social Distancing

• Link to the article.
• ViacomCBS, which owns Paramount Pictures, is spending its advertising budget on running a social PSA campaign across its portfolio of brands about the importance of social distancing amid the COVID-19 outbreak, which Paramount Pictures has also posted on its Twitter account.

ViacomCBS, NBC cancel 'upfront' ad sales presentations

• Link to the article.
• ViacomCBS said it is canceling its live "presentations, where advertisers preview upcoming TV shows," and instead will reveal "new prime time shows" online in order to keep everyone safe amid the COVID-19 outbreak.

Melania Trump to Appear in Coronavirus Public Service Ads

• Link to the article.
•  ViacomCBS is turning over its air time across its network to feature commercials from the White House that details how to stay healthy amid the COVID-19 outbreak.

Research Strategy