New figures by market research company AC Nielsen show that advertising spend is down by just over 20%, and as the Covid lockdown continues, it will continue to fall.
Apart from tobacco marketing, which is down 100% because of the ban on sales, other sectors that have been adversely affected are automotive (-52%), beverages (-49%), and retail (-54%). Travel, sport and leisure adspend is down by just over 50%.
These percentages reflect comparative average spend between January and April this year. SA’s lockdown began on March 27.
Hidden in the data is one number that illustrates the devastating impact the pandemic has had on small businesses, usually with small advertising budgets, often used in community newspapers or specialist magazines. So-called small display ads are down by just over 60%.
But Nielsen’s numbers also show that some sectors have been able to take advantage of the lockdown and increase adspend — notably foodstuffs (up 27%) and health and beauty products, up by close to 30%. And giving some indication as to what suburban SA is up to during the lockdown, pet shop and pet care advertising is up 100%.
Ana Carrapichano, founder and CEO of media agency Mediology, says: "When the world hit pause, so did many advertising budgets. Almost overnight campaigns were pulled after President Cyril Ramaphosa declared the national state of disaster on March 15." She says brands have simply been forced to step back and watch as audience media consumption and consumer behaviour shifted.
Media, notes Carrapichano, is bought and placed based on the habits of people, and when the pause button is suddenly pressed, all historical modelling and predictive data becomes redundant. Nielsen’s data also looks at average TV and radio adspend between January and March and then April and May, and the picture is disturbing, with adspend down 30%.
"Cinemas closed, publishers stopped printing, people weren’t allowed to leave their homes during lockdown, making the out-of-home category a redundant medium," says Carrapichano.
At the same time, digital activity and television viewership increased, shifting adspend to these channels, though TV was still hit hard as the medium with the highest share of adspend.
Respected media sales observer and CEO of OUT/side Broadcast Consulting Clare O’Neil tells the FM that when the likes of Unilever pulled most of their spend during April and May, the entire industry felt the pain. And digging deeper into the categories of retail and fast-moving consumer goods shows that fast-food chains pulled all their spend, as they had to close down during those two months, and redirected their advertising funds to assist franchise owners and employees.
And while the alcohol industry also pulled back spend and will probably do so again with the new ban , marketing budgets were used to sustain parts of their value chains.
"We also saw an increase in social responsibility messaging from financial institutions, insurance companies as well as SA Tourism and some brands from the automotive industry, with feel-good messaging," says O’Neil.
Carrapichano believes a rise in spend on health communication campaigns need to be treated with care because generally media owners are generous in offering high discounts and free space to this sector. She also believes that the brand communications industry is in for the long haul. "Consumer confidence and spend are at an all-time low. Long-term purchase cycles have become longer, such as buying a car, and priority items like food and sanitisers have become the main focus. Budgets have shifted from marketing to support the health of businesses and keep people employed."
Media owners, says Carrapichano, are also adopting a new stance. "Many have been severely knocked and are now being cautious, with some not increasing advertising rates for the time being, increasing their competitive stance to make up some of their losses."