Coronavirus has a dramatic effect on media inflation

In just a few short weeks the Covid-19 pandemic has disrupted the human way of life right across the globe. We have been forced to stay at home and, crucially for the advertising industry, our consumption habits have been transformed quite literally overnight. Many brands have been impacted by reduced spending, forcing them in turn to reduce their own advertising budgets; almost all advertisers have revised their 2020 marketing activity in some way.

This disruption to global media markets has caused a sharp drop in demand and, as a result, a decrease in pricing for most media types, according to ECI Media Management’s special report on the impact of coronavirus on media inflation, produced by our experts. At a global level, all traditional media types will suffer from deflation of varying severity, while Digital Display and Digital Video – which were looking very robust in our original report released at the beginning of the year – are forecast to be only minimally inflationary in 2020. The story is more varied at a regional level: in North America and EMEA, all media including Digital are deflationary, while in APAC and LATAM some media types are showing more resilience. It seems likely that the fact that these regions are at different stages of the pandemic – APAC is seemingly through the worst, while LATAM looks to be at the start of the curve – is affecting inflation.

Digital: inflationary overall, but deflationary in key markets

With advertisers shifting spend out of OOH, demand is high for digital, leading to overall inflation for Digital Video and Digital Display, particularly in APAC which is driving global Digital inflation. However, several major markets such as the US, the UK and France are experiencing deflation in digital channels due to the huge inventory increases combined with decreased demand. The use of programmatic blacklists to block terms associated with coronavirus is reducing the price drop for digital channels, although the trend is causing digital publishers to struggle – the IAB is trying to combat this practice.

The video streaming platforms should be one of the few sectors to benefit from the coronavirus pandemic, with subscriber and viewing figures up significantly. Those platforms with a revenue model based on advertising should see increased demand from advertisers seeking to benefit from that increased viewership, especially in the US.

TV: consistently deflationary, except in APAC

TV viewership has perhaps never been higher, with people turning in their droves to TV as a source of information and entertainment. The increased viewership has led to increased supply, particularly as some advertisers have had to pull their spend – and that has led to an overall deflationary trend. This means that there is huge value for those brands who are still active in TV, with much more reach at no extra cost.

Coronavirus will have a lasting impact

Coronavirus and the havoc it is wreaking on our economies and our way of life will have a profound and enduring effect on the entire advertising industry. It seems inevitable that, when we do emerge from this crisis, the landscape will have dramatically transformed. Economic uncertainty and a lack of growth will likely see brands continue to exercise caution over their marketing spend: ad spend is likely to decrease, and media inflation will inevitably respond. At ECI Media Management, we will continue to provide forensic analysis and actionable insights so that advertisers are able to successfully navigate this new terrain. Please don’t hesitate to contact us if you would like to discuss your media activity in a post-coronavirus world.

Read and download the report here.

Discover our top 10 recommendations for advertisers during the coronavirus pandemic here.

Image: Cipariss/Shutterstock

ECI-THINKS Image
January 22, 2024
The cookie is finally crumbling The cookie is finally crumbling

- The death of the cookie has been a long time coming, but it seems that 2024 will be the year Google kills it off. Is the advertising industry ready?

Read more
December 18, 2023
The rise of the ad-dodgers The rise of the ad-dodgers

- By paying for ad-free subscriptions, affluent consumers are turning into ad-dodgers. What can marketers do about it?

Read more
November 27, 2023
Super-premium advertising opportunities: are they worth it? Super-premium advertising opportunities: are they worth it?

- Brands shell out millions for Super Bowl spots or Christmas ads, hoping to go viral and capture the zeitgeist. But are these super-expensive ads worth it?

Read more
October 2, 2023
Netflix gaming: a new frontier for the streaming behemoth Netflix gaming: a new frontier for the streaming behemoth

- Netflix's foray into gaming demonstrates its vision to remain a leader in the evolving entertainment landscape. Will it work?

Read more
September 1, 2023
X: Better to save X: Better to save

- Twitter has rebranded to X and new CEO Linda Yaccarino is attempting to woo advertisers back with brand safety initiatives. Is it enough?

Read more