While the COVID curve flattens, ad spend is starting to pick back up. Before anyone starts doing cartwheels, ad spend is still down compared to pre-COVID levels but the trend lines are starting to move in our favor. This ain’t no disco, but it ain’t fooling around either… it’s good news. And we can all use Some Good News.
Much needed long weekends are in store for many of us, and I’m hoping everyone is able to shut things down for a bit and enjoy time with family. From New York to London to Sydney – it’s never been nicer to be at home and worse to be inside, so be sure to try and get some Vitamin D in the most socially responsible way possible.
I was going to review a few more esoteric data points this week but decided to push that out further in favor of a look into a couple categories that are bouncing back. I will get back to those insights next week.
Hope you are Staying Safe, Healthy, and Happy.
EVP, Global Marketplace Development
Due to the time horizon of this chart, it might be easy to miss at first glance, but a number of key verticals are trending up as we pass May’s halfway mark. Retail has effectively recovered and has returned to pre-COVID levels.The Media category is right behind Retail. Auto, Finance, and even Travel are experiencing positive momentum. Considering we’re just about eight weeks past the dip, this fits well with the prevailing narrative that many brands needed time to adjust, to retool, and to resume their marketing. I’m calling it now – I am expecting a strong June and close to Q2.
I have been writing about the shifting face of the Retail sector since this started. I highlighted how Retail was going to push eCommerce strategy to be their dominant revenue stream, turn their stores into distribution hubs, and be defined by delivery – not stores. This was a shift already underway and simply adrenalized by the pandemic. Despite that, I was still surprised to see this stat:
This sector is on the clearest path to recovery despite the carnage of a few of its mainstays. We will continue to see large, traditional retailers like JCPenney and J.Crew get impacted during the transition, but the category as a whole will grow. Programmatic will not be an expense in this environment, but an investment – a lifeline.
The Auto category is starting to slowly emerge as the economy opens back up. It’s not just rentals and service carrying the weight either. Dealerships are starting to spend again. Much like Retail, I do think the current situation will force a lot of change in this sector – especially in how dealerships handle sales: appointment based, less walk-ins, test drives coming to you, more virtual showrooms, and digital-first transactions. Hopefully this will mean no more waiting at a desk for hours while paperwork is processed. These are not trivial changes. They will take time to implement, but it’s probably inevitable. This is an example of the kind of disruption that transcends the current crisis but has a net positive impact on the consumer.
As things start to open back up, it’s a good time to think about the best way to approach Buyers as we head into the summer.
For Publishers, focus on 2-4 week planning cycles – not quarters or even a half year. Align decisions to the market and focus your strategies on specific vertical trends. Time is your most valuable commodity right now. Spending it trying to game plan the remainder of the year is probably not the best use of it. Buyers are looking for flexibility, not commitments. I don’t see that changing for the remainder of the pandemic. It’s a “it’s not you, it’s me” kind of thing right now.
That being said, we are seeing more deal-driven spend versus strictly open marketplace. Many of these deals are about savings and flexibility. If you can demonstrate value in the short-term, buyers will work with you.
In advertising as in life, the summer is not about long-term commitments. In short, dish out short-term opportunities that Buyers can take advantage of now, with little to no commitment – no strings. As incremental budget frees up, and it is starting to, you’ll be well-serviced to find it a good home.
The death of the office is turning into its own clickbait spectacle.
Let’s be clear: offices, the nature of work, and how we work, has changed. It will not be the same after the pandemic recedes, but the idea that offices will be abandoned is just hyperbolic nonsense. We are hardwired for connection and social interaction. Many industries have learned they can work from home, but being able to do something and wanting to do it are different things. It’s a “just because you could, it doesn’t mean you should” type of thing. Some businesses will go to WFH permanently but just as many will happily skip back.
Innovation tends to happen in dense areas – which is why cities play such an important role in certain industries – especially Technology and Finance. There is talent tightly packed into a certain radius. Within that bubble, companies will compete for talent and ideas. Competition will fuel creativity and investment. Those things are not easily distributed or found over a bigger surface area.
Just as important – young people are not drawn to WFH environments and developing talent remotely is going to be hard without a community or campus – especially in our line of business. And these folks are a vital part of a city’s life and a vital part of the Advertising and Technology industries. I don’t see how an exclusively WFH option will be able to foster that type of creativity and collaboration needed, at least, in our line of work.
What does that mean for offices when this ends? I am not exactly sure. I just know it will be a bit different. It will probably mean less footprint, more collaboration through communal setups (when they become safe anyway), and more flexibility. I hope it doesn’t mean the widespread return of the cubicle. I am really proud of how IX has made this transition. It’s great to have business continuity in such a challenging environment. We can do it, but I don’t think I am alone when I say I cannot wait to see my colleagues again. And I want to see them in all of our offices across the world. Which is why I am not closing the door on business travel either.
In A Positive Note
I read this story about libraries and how they are changing as a result of COVID-19.
It was incredibly heartwarming to see how such a vital service is being reinvented to best service the public. Many of us overlook the important work our local libraries provide to vulnerable communities. They may seem like a relic of another time, but they are doing good work when we need it the most. As many of you might consider ways to help in your local community, the library is a good place to start.