Would COVID-19 Pandemic treat Advertising Industry well ? | Daily News


 

Would COVID-19 Pandemic treat Advertising Industry well ?

Advertising is the meaningful connecting bridge of brands and consumers! Building familiarity, awareness, increase sales and brand building are some of the key responsibilities of advertising. Even in an era when the media landscape is getting fragmented with fast innovation of digital media touch points, traditional media still becomes the  choice of many brand owners as well as advertisers. Further, digital media platforms have been used as enabler to increase reach of traditional media content

In this context, Advertisers’ as well as brand owners’ attention is still an increasing trend and spends on traditional media advertising top the list for most of the businesses.  As much as the brand dependency on advertising is high, it got significantly impacted during COVID-19, hence this effort is to explore the level in which COVID-19 had changed the advertising spend by brands in Sri Lanka. Survey Research Lanka (Pvt) Ltd, (SRL) widely known as SRL as the oldest Sri Lankan Research and Consultancy Company maintains a large database of media spend data with its Media Research arm.

 This article is written based on real time data that are collected by SRL on media spend during COVID-19 and a comparative analysis of it with the same period in 2019.  This is an exploration of advertisement spend on TV and radio only. Although the advertising spend on print media had been captured in SRL AdEx project, it is not considered for this analysis given that most of the Newspapers did not print during COVID-19.

The general trend of advertising spendsin April and December months of the year are very different from the other ten months for obvious reasons. Due to heavy media spends in the seasonal months; brands definitely would have had the same plans for this April as well. COVID-19 changed all the plans, unexpectedly. The impact made on advertising spends due to the calamity of Easter Sunday attackin 2019 was negligence when compared to the impact of COVID-19 pandemic which is global. In April 2020, we could see a drastic drop in brands’ spending pattern on TV and Radio Advertisements as a result ofCOVID-19.

Some of the data points to understand the level of COVID-19 impact to the advertising industry in Sri Lanka that are extracted from the‘SRL ad expenditure and MediaTracking project’ are;

1.       COVID-19 impact on utilization of air time of mass mediaby brands- total number of advertisements& other spots aired on TV in the month of April 2019 was 144,538 and it had dipped to 80,047 in April 2020. This is a 45% drop compared to April 2019.When it comes to radio, the total of 235,216 advisements had been aired in April 2019, the corresponding number for this year April was 71,941 and it was a 69% drop. It clearly shows thatPandemic COVID-19 has a significant impact on air time utilization by advertisements and the impact made on Radio commercials issignificant.

Graph 1

2.       COVID-19 impact on advertising spend on mass media- Total spend for the month of April 2020 on TV and Radio advertisements was Rs.2.9bn (based on the rate card values) and this parallel in January 2020 (three months before), was Rs.6.7bn which is nearly  56% drop of advertising expenditure in the two main mass medias, TV and Radio. TV contributed for around 80-85% from the total Ad Expenditure (AdEx). In a normal situation, AdEx in April and December months is higher than other months of the year; for an example, increased of total AdEx (TV & Radio) January 2019 vs. April 2019 was 11.5% (With one week impacted from Easter Attack). But, in this year (2020), Total AdEx of TV and Radio has decreased by 56% compared to January 2020. Furthermore, TV AdEx has decreased by 55% while Radio AdEx decreased by 65% with COVID-19.

Graph 2

3.       COVID-19 impact on advertising-continues for another month- All of us thought that the impact will diminish post April with decreasing number of COVID cases in the country and with the opening of most of the cities for operation. However, the observed recovery rate is very slow based on the advertising data of SRL media studies. This means brands are still skeptical about spending in media. While total advertising expenditure in the month of May shows a slight improvement due to rise in TV advertisement expenditure, spending on Radios continue to drop in the month of May too. As per the below two charts, with the diminishing number of advertisement,advertising expenditure drop continues.

When comparing with the same month in previous two years, it shows a drastic drop of advertising expenditure in the month of May 2020.

Graph 3

4.       More prominent Ad spender during COVID-19 -From the total TV and Radio Ad expenditure of April 2020, 47.5% have been shared by only three sectors which are Telecommunication services (21.2%), Bank & Financial services (16.5%) and Insurance (9.8%). Total Balance 52.5% is shared by more than 100 product categories.  The above mentioned three sector representation in ad expenditure in January 2020 was just 18.9% and same was 23.8% in April 2019 comparatively. This clearly demonstrates that Telecommunication, Bank and Insurance sectors had established a higher representation in the reduced Ad expenditure during April 2020 with COVID-19 and market uncertainty created around it.

5.       COVID-19 impact on advertising spend by different sectors -It was not just the representation but the absolute Ad expenditure by Telecommunication, Bank & Financial Services, Insurance and Cough & Cold Remedies on TV has increased in April 2020 when comparing with the Ad expenditure by these sectors in January 2020.

It was important to note that most of the communications was very informative more than ever which was a very important indication that all of us witnessed through advertisements during COVID-19 period.

This time for marketers, is not about spending as usual on marketing communication,but,the absence of Marketing Communicationis also alarming. It’s like a free window they are providing for competition and small/cottage players to grab share off their shelf space. Or may be marketers are making their own consumers condition themselves to be able to survive without their product or service.

Hence it is very important that marketers are constantly out there speaking and showing the value and care their products and services have for consumers.Brands need to focus on creating their equity with messages that are relevant to this situation to expect a healthy impact on brands.It is an opportunity given for brands to earn long term equity than accomplishing short term sales objectives in this difficult time for consumers.

Use this time window to show brand empathy towards your consumers. Less clutter in media as well as in people’s minds, isn’t it the best time to register our brands?Further, what marketers need to be mindful of is through what medium and touch points are they going to tap in to, with a cautious allocation of budgets to mass media vs other touch points including digital platforms.

We, as a nationhas progressed a lot in defeating COVID-19 so far. But, there is more to be done. Our heroes in the Health sector, three forces and Sri Lankan Police who are in the forefront need a lot of support and understanding from our end. Hope, all Sri Lankans would give full Corporation to swipe off Corona fully from our country…!!!

SRL is the FIRST Sri Lankan full service independent marketing and social research  Consultancy Company and First established Media Research Unit in the country.


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