We’re now four weeks into the UK’s unprecedented Coronavirus lockdown, and the impact upon TV advertising has been seismic. In another post I will be looking at the ways in which TV advertising creative has adapted, but first let’s look at the business side of things.
In short, the current situation is:
- advertising spending has been slashed (demand is down)
- TV viewing figures have risen sharply (supply is up)
- this combination has resulted in TV airtime rates dropping to their lowest average level since 2010
So far our clients have fallen into one of three categories: those who’ve either halted their current campaigns or postponed their short-term plans for new campaigns; those who are planning new or revised campaigns based on expectations of post-lockdown market trends; and those who are finding opportunities right now to advertise.
Pausing a campaign
Conventional wisdom is that brands who can find a way to successfully market themselves during a crisis stand a greater chance of coming out stronger when — some, at least! — normalcy returns.
That being said, when even Coca Cola are pumping the brakes on advertising spending, in this time of undeniable uncertainty there are legitimate reasons for hitting pause on a TV advertising campaign. In the North East for instance, with all stores currently closed, Frank’s the Flooring Store have understandably cut short their typical Q2 campaign.
Minimising expenditure (of any kind) during a time of crisis is naturally the first course of action taken by many businesses, and traditionally advertising budgets are the first thing to be cut. There’s always an argument to keep spending to support your brand, but for some sectors — travel, for instance — there isn’t any real incentive to keep running TV campaigns for the time being.
Planning for life after lockdown
One of the few things I can say ‘for certain’ right now is that when the non-essential retailers are able to get back to business, many will be forced to drives sales through deep discounting. Primark may be an extreme example because they don’t sell online, but with revenues dropping from £650m per month to nil and an estimated £1.5bn stockpile, they will undoubtedly be looking at an aggressive marketing campaign to help get the wheels turning again once they re-open their stores. They simply have to shift stock, as quickly as possible, and many other retailers will be in the same position.
The general consensus from conversations I’ve been having with clients is that with lockdown reducing our typical daily spend on commuting, pre-pack food and social & leisure activities, many consumers will likely have a higher-than-usual level of disposable income to play with in the coming months. It’s reasonable to assume that this will have a positive impact on retailers of both big-ticket items and daily non-food essentials, and TV advertising remains the best way to reach a mass audience to promote sales.
Aside from clothes, accessories, cosmetics and the like, we are anticipating an uplift in DIY & home improvement sales, as well as UK-based holidays, thanks to a combination of travel restrictions anticipated to last for the foreseeable future, summer just around the corner, and the number of us who’ve been stuck indoors with time to notice the areas around the house which could do with a little attention!
Current market opportunities
Most major broadcasters have slashed their rate cards in recent weeks. Speaking generally, the campaigns we’ve been helping our clients to plan are delivering 2x the audience they might have just 3 months ago. One of our clients will reach a national audience of over 4 million viewers for a £10k spend.
Without question, businesses with online retail presence — who are still able to fulfil orders, of course — are best placed to take advantage of the current market conditions. Having an existing advert which can be re-licensed or tweaked for a new campaign is the ideal scenario, but we’ve also been working with advertisers who were planning new live action adverts but have instead engaged us to produce animated adverts.
With animated TV adverts typically costing less to produce than live action, and often requiring shorter production schedules, this is a genuine win-win for clients, who get to save money on production and quick-launch campaigns with considerably more reach.
If you’d like to talk about a TV advertising strategy, or have any questions related to the current market conditions, please drop us a line.