How the Advertising Industry is Dealing With Coronavirus Pandemic?

The coronavirus outbreak has already disrupted diverse industries around the world, and the advertising industry is not an exception. In the time of global crisis, the sector is experiencing a considerable decline, significantly impacted by expenditure cuts on the part of advertisers especially related to the tourism industry. Moreover, as major events and in-person pitch meetings have been canceled, advertisers hit the breaks in spending as sales plunged.

In India, the advertising industry was all set to register around 11-12 percent growth in 2020 a few months back, according to reports. But the outbreak of coronavirus in the country and the government-mandated 21-day lockdown may vary the outcomes of the ad growth in the country.

On a global scale, the projected growth for advertising is seen in terms of reduction due to the impact of the pandemic. In a report from eMarketer, the global ad spending is expected to worth US$691.7 billion this year, which is down from an earlier estimate of US$712 billion. However, this could again change for the worse if the 2020 Summer Olympics in Japan set to air on NBC is ultimately canceled or postponed.

The report further noted that the cut in the projection is due majorly to China as the country is the second-largest ad market, just behind the US. In the country alone, still a growth market for media and advertising led by digital platforms, but the total media spending is projected to drop to an estimated US$113.7 billion, from an earlier prediction of US$121.1 billion, as per the eMarketer report. The advertising growth rate in China is also expected to decline to 8.4 percent from an initial 10.5 percent.

On the other hand, in its Global Ad trends report on ad spend, the World Advertising Research Center last week said that if the crisis remains contained, advertising spend would be delayed until later in the year. The group also envisage that advertising spend would reach US$660 billion this year, however, that figure doesn’t comprise potential impact from the coronavirus since, if it is contained, that displaced spend would be reallocated for later in the year.

Moreover, the situation to improve around Covid-19 is not yet specified, though there are some signs of stabilization in China. Despite this, advertisers are being cautious and taking more of a wait-and-see approach. In major Chinese cities, including Beijing, Shanghai and Guangzhou, consumers are expecting the situation to last at least another four months.

One another area of advertising that could apparently be impacted is Out of Home (OOH), like billboards and public transit ads. This is largely due to all of the isolation and social distancing practices that are being imposed by governments all over the world and health bodies globally. However, this is expected that the ad industry will recover and drive growth when people will come out or when traveling will start.