Coronavirus disrupts search, digital advertising budgets

Analysts expect Google and Facebook to record decreases in travel revenue in travel and other industries most affected by global efforts to slow the spread of coronavirus. In the field, marketers and media buyers have re-evaluated their short-term advertising strategies.

Loop equity market analyst Rob Sanderson is expected Google will record a 15% year-over-year drop in travel ad revenue in the first quarter and a 20% decline in the second quarter due to the coronavirus outbreak.

Last week, Needham analysts Laura Martin and Dan Medina said there was evidence of lower spending on travel, retail, consumer goods and entertainment, which is estimated to represent between 30% and 45% of total revenue. Facebook.

The media buyers I heard from Wednesday shared a number of scenarios, with some still not seeing any changes, others making dramatic adjustments to short-term budgets. Some even raise digital budgets.

Supply chain and demand concerns

The impact of the supply chain on stocks is beginning to be felt in advertising expenses. Scott Wright, PPC's chief consultant at London-based e-commerce consultancy Vervaunt, said a Chinese-based customer started stockpiling in February, but expected to run commercials for several months. of current stock. "As the situation has not improved in terms of their supply chain," Wright said, it is expected "that some key products will be out of stock this month, so [Google Search and Shopping budgets] were reduced by 40 % in the UK and Europe this month, waiting. "

A luxury international tourism business has cut budgets by more than 50% over previous months on all digital channels, said Michelle Morgan, director of customer services for digital agency Clix Marketing, based in Louisville. Morgan says the agency still has the flexibility to allocate the remaining budget for the most effective channels and campaigns, so far less work is needed.

Some companies have ended their digital advertising budgets. "We had two clients who cut costs because of the coronavirus," said Tom Shurville, director of the digital agency in the UK, Distinctly. Clients – from the hospitality and events industry – are expected to keep advertising off until the coronavirus stops affecting the meetings.

Feeling Jittery

Uncertainty in this regard has all business of all types.

Another Vervaunt customer, a luggage retailer, did not see a drop in demand, but "trends from Italy are cautious," Wright said. The agency manages Search, Shopping, Amazon and Social for the customer. Last week, Amazon's revenue was down, but Wright said it's not clear yet if this is a trend. It is expected to return to most customer prospecting campaigns until this week, although the amount is not yet confirmed. The budgets will be managed daily on an ad hoc basis, depending on the appearance of things.

Alabama's paid search advisor Josh Yates said his clients haven't changed yet, but many are nervous. Even those in sectors that seem to be unaffected. One, an e-commerce brand with US production and no expected inventory challenges, was asked to say: "Be ready to recover your expenses.

Breaking the trend

Not everyone considers reducing the budget in response.

As the exhibition circuit goes down, some exhibitors are looking for other ways to complete their sales pipelines. "[I] only spoke to a client who sees that more exhibitions are canceled and wants to put more in digital to make up for the missed opportunities they usually raise at events," said Tim Jensen, PPC campaign manager at Clix Marketing.

Amalia Fowler, marketing director at Snaptech Marketing in Vancouver, said one of her clients, a state-of-the-art food tourism business, is growing instead of pulling digital budgets. With aggressive growth targets for the year, including a new promotion round, the company is increasing search budgets in the face of a crisis. "It gives the big tour companies an advantage," said Fowler, "so it can work."

WARC is projecting a further 7.1% annual growth in global average spending this year. This is based on an expectation that marketers will simply make exchange budgets until the second half of the year, which will stimulate competition and prices for the media. This means that advertisers can continue to feel a squeeze long after the coronavirus fades.

This story first appeared on the search engine. For more on search marketing and SEO, Click here.

About the author

Ginny Marvin is the editor-in-chief of Third Door Media, which conducts daily editorial operations in all publications and oversees paid media coverage. Ginny Marvin writes about paid digital advertising and news about analytics and trends for Search Engine Land, Marketing Land and MarTech Today. With more than 15 years of marketing experience, Ginny has held both internal management and agency functions. She can be found on Twitter as @ginnymarvin.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *