Multinationals increase ad spend as business picks up post Covid, WFA report

Multinationals increase ad spend as business picks up post Covid, WFA report

06-10-2020 11:04:13 | Door: Bob Koigi | Hits: 1368 | Tags:

Major multinationals are starting to increase their ad spend but overall activity still remains lower across most channels compared to what was planned pre-pandemic, according to WFA’s latest Crisis Response Tracker.

Fifty-four percent of respondents are no longer deferring campaigns and levels of optimism about the current business environment have improved. Twenty-one percent now feel positive and 36% feel neutral compared to only 8% feeling positive and 41% feeling neutral in June 2020, when the last wave of WFA research was conducted.

Nevertheless, actual spend remains lower than originally planned across the first three quarters of the year, with only online display (up 6%) and online video (up 9%) benefiting from higher levels of investment.

The results of Wave IV of the WFA Crisis Response Tracker are based on responses from senior executives at 35 major advertisers with a cumulative total annual ad spend of $67 billion. The research was carried out from September 17th to 27th with 75% of respondents holding global roles and 25% in regional roles.

Qualitative responses from multinationals highlight the shift to digital with many saying they have made a full transition to channel-agnostic video planning, boosted their focus on eCommerce, run more virtual/digital marketing activations and influencer events and rebalanced investments between experiential and digital.

Other major channels such as TV, out of home and point of sale are beginning to pick up from the historic lows experienced in the first half of the year. TV is still down 25% for the first quarter-3 but showing better than the 33% cut experienced in the first half.. Similarly, out of home is 39% down on planned spend, an improvement on the first half. figure of 49% and Point of Sale is down 20% compared to a 23% fall in the first half.

After online video and online display, influencer marketing is closest to matching planned investment with an 11% fall in Q1-3, compared to a 22% drop in H1.

Worst hit were events/experiential (down 60% across Q1-3 compared to -56% across the first half of the year) and radio (down 35% for Q1-3 compared to -25% for the first half.), which continued to face declines in spend.

Stephan Loerke, CEO, WFA: “We are starting to see some green shoots of recovery with more than half our members no longer holding their campaigns back as a result of the pandemic. There is still a lot of uncertainty though and it’s unlikely we’ll be moving to ‘business as usual’ anytime soon. We are also seeing an acceleration of the shift to digital channels but it remains to be seen if this will be permanent.”

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