Home Analysis How U.S. advertiser strategies are adjusting to the Covid-19 crisis

How U.S. advertiser strategies are adjusting to the Covid-19 crisis

What is your ad strategy if you sell out regardless, or cannot sell at all? Photo by Mick Haupt on Unsplash
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Advertisers in the U.S. are already adjusting both their messaging and media strategies in response to the Covid-19 crisis, and one of the reactions among the sectors that can no longer sell goods has been to shift from ads that drive conversions to brand-focused ads, with the branding associated with values, and the values relevant to the current crisis. Thus, some automotive ads in the U.S. are starting to focus on what the brand is doing to look after employees rather than highlighting models, finance options or dealerships.

These are among the observations of Philip Smolin, Chief Strategy Officer at Amobee, the ad-tech company whose market research and analysis tools help the buy-side (as well as the sell-side) understand where content is being consumed and consumer sentiment around context and keywords. That information is provided for different industry verticals, like finance or quick serve restaurants, or on a bespoke basis for customers.

Looking at advertising in the digital domain, where the data has been fed back quickly and already analysed, Smolin says the initial reaction among U.S. brands was to avoid what was considered the negative context of content discussing the current virus and pandemics. Some brands are still following that instinct, but others now see it as both appropriate, and an opportunity to advertise around Covid-19 related content.

Food delivery companies are one example of a sector now advertising around content associated with the crisis. Sensitivity is still required – programming focused on how you eat well at home or ensure food safety would be considered good context in this instance. Smolin says some finance companies are targeting consumers with ads about home refinancing and other loans – both helped by very low interest rates – with Covid-19 content providing relevant context for anyone worried about their livelihoods.

In the fast moving consumer goods sector, like food and household goods, it is either easy to sell product today or impossible for reasons unrelated to demand, so many brand owners have pulled back budget while they figure out what to do next. As Smolin explains, “If you sell toilet paper there is little value in advertising right now in order to shift market share, because the supply chain is empty.”

The early evidence is that the strategy emerging within the FMCG sector after a short hiatus is top-level branding, often with an educational twist, like how to keep your family safe. There is no need to try to drive people to a bricks-and-mortar store.

“Yes, they are looking beyond the crisis,” Smolin says of these brands. “They cannot generate more sales but there is an opportunity for them to drive brand awareness.” Products selling via online portals can still benefit from an activation goal, of course.

Once the brands and agencies have settled on their new advertising strategy, media planning requires some attention. “Many advertisers use live sports and other tentpole events [that have been cancelled] so they are using data to find the audience they sought but within different content. There is no change in audience strategy but media buying tactics are adjusting.” Amobee audience analytics can help with the audience discovery.

This process sometimes confronts buyers with the context conundrum – do they want to reach their original audience via content about the coronavirus if that is where some of them have shifted? “That goes back to corporate values,” Smolin has observed. Often the content in question is news and current affairs. “We are seeing brands in the U.S. who want to positively support journalism and be positively associated with that,” he adds.

Since the crisis began there has been downward pressure on digital advertising prices, though it is not dramatic, according to Amobee. “Supply [of audiences] is increasing [because of more viewing] and demand is either static or somewhat down, in the high single-digit or low double-digit range,” Smolin reveals. “But we are not staring at a catastrophic collapse in advertising spend – we have not seen any indications yet to suggest that.”

Smolin reiterates that while some brands pulled budget back as soon as the crisis deepened, they then had to make a quick strategic decision: do they want their brand in-market or not. Typically, the answer has been yes, they do.

“What we are seeing is that most brands are focused on rethinking their messaging strategy, and using a different voice in the market, rather than pulling back their media buying. But there may be pauses in budgets.” Some verticals are hurting more than others, of course -with travel being an obvious example, but Smolin is summarising for the market as a whole.

“Generally,” he adds, “people think this is going to be something that plays out over a period of months rather than years, and they expect the economy to recover, whether quickly or gradually. So far, the industry is holding up quite well, though it could change.”

The data available from Amobee is very responsive, as it covers the digital domain, and it flagged changes in advertising behaviour from about three weeks ago, with a major shift last week. “The brands and agencies have responded quickly,” Smolin says.

In terms of how people are watching digital content, the Amobee intelligence shows an increase in big screen co-viewing, as people gather around a connected TV, but this has not been at the expense of in-home mobile consumption. As most reports suggest, all boats are rising on the increased viewing tide.

The daily Brand Intelligence COVID-19 Daily Update from Amobee on March 24 demonstrates the unsurprising but astonishing hold that this crisis has on our attention. Out of all online engagement that day, 44.5% was related to Covid-19. The bulk of this online engagement is on desktop or mobile, with each taking around 44% of the attention, compared to 11% for social.

65% of all online engagement around business subjects for the last seven days has been associated with Covid-19. For travel the figure is just under 50% and for finance 57%. The most sought after Covid-19 related topics are government and politics (by a considerable margin) and then science, health, entertainment and personal finance.

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