The toll the coronavirus has taken upon the U.S. TV ad industry is, to date, $3.7 billion, or a decline of 9%.
That’s according to estimated ad spend data from ad analytics firm iSpot. The annual spend to date of $37 billion is the lowest level seen since 2016.
Among the broad industries, Vehicles and Automotive led the decline, with a $1.2 billion shortfall versus 2019, as consumers’ interest in buying vehicles dried up while many sheltered at home. Electronics and Communication (cell phones, tablets, computers and other electronic goods) saw a decline of $720m, with Travel close behind with $711m less spent.
Not all industries saw a decline in spend for 2020. Politics and Government was up by over half a billion and should be expected to continue to grow as election season heats up. Home and Real Estate also saw big gains, by $336 million, as increasing numbers of Americans look to relocate away from expensive cities, or catch up on home improvement tasks that have been on the to-do list for years.
When looking at the categories seeing increased ad spend this year, the largest by far is Video Streaming Services. This is partly due to the launch of Quibi, HBO Max and Peacock this year; streaming services are also aware of the lack of content available on traditional TV and trying to tempt viewers to add their services to chase away the lockdown blues.
Being stuck at home has proved a boon for numerous industries, but Laundry Detergents in particular have spent $179m more on ads this year as they seek to capitalize from people looking to minimize outside contact and do their own laundry.
Automakers, including Toyota, GM and Ford, have seen the steepest cuts in the ad budget, spending a billion dollars less this year. Not far behind them are ads for theatrical movies. With theaters closed throughout much of spring and summer and movies delayed, sold to streaming services or released via PVOD, the industry hasn’t had much to advertise, with spend down $944 million.
Of the categories seeing declines of $200m or greater, it is interesting to note that Soda spent $264 million less. One possibility for this is that soft drink ads are usually frivolous in tone, thus something companies avoided running during the “serious” stage when the pandemic set in during March and April.
It will be interesting to see whether categories such as Soda continue to spend below 2019 levels once the pandemic has passed; VIP suspects some categories that cut on spend but didn’t see a big hit in sales may opt to keep things per the new normal.
Article by: Gavin Bridge for Variety.
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