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COVID-19’s Impact on the Digital Advertising Market

People have started shifting to consuming digital media from their homes due to the Coronavirus. Many companies have begun altering their digital advertising budgets. Pathmatics Digital Ad Intel says there has been a significant increase in spending on desktop display and video ads. Consumers are seeing approximately 25% more ads on desktop devices since early March.In terms of ads served, news and medical sites have seen the biggest increase in traffic since the beginning outbreak. While, sports websites, arts & entertainment websites, and travel websites all have seen over a 25% decrease since the outbreak. Yet, for consumer packaged goods, digital advertising spend has remained relatively the same compared to 2019. However, there are a few key differences.[caption id="attachment_3060" align="aligncenter" width="570"]

Ad spend change by category via Pathmatics.com[/caption]

How is COVID-19 impacting the travel industry?

Due to increased travel bans and fear of the virus spreading, travel companies have significantly cut back on digital advertising. Some travel companies have cut digital advertising spend altogether. While others have chosen to alter their messaging tactics. A few travel companies have even implemented a mix of both. For example, United Airlines initially pulled their digital advertising altogether in response to the outbreak, then later launched completely new messaging promoting cancellation flexibility.[caption id="attachment_3061" align="aligncenter" width="544"]

United ads via Pathmatics.com[/caption]

Some companies are taking advantage of the circumstances

Many companies producing consumer packaged goods like Procter & Gamble, SC Johnson, Clorox, etc., haven’t had to alter their digital advertising much at all. However, with many of these companies’ goods suddenly in high demand, there have been a few key changes. For example, as people are feverishly stocking up on goods such as toilet paper, Procter & Gamble recently decided to drop all of Charmin’s digital advertising spend on Twitter. With toilet paper already in such high demand, P&G decided there was no need to spend additional money on advertising for it. Conversely, The Clorox Company increased its digital advertising spend, specifically on desktop devices. With the increased demand for Clorox products, Clorox hasn’t had to alter its digital creatives or messaging to generate sales.[caption id="attachment_3062" align="aligncenter" width="545"]

Charmin Twitter ad spend via Pathmatics.com[/caption][caption id="attachment_3063" align="aligncenter" width="545"]

Clorox ad spend 2/10/20-3/18/20 via Pathmatics.com[/caption]The economic effects of the Coronavirus could potentially reduce total digital advertising investments in the US by as much as $11 billion in 2020 according to an analysis from The Myers Report. However, it is important to keep in mind that total advertising growth in 2020 is still forecasted to increase by 4.8% from 2019, even though initial projections showed a 6.2% increase. All things considered, as a country in the midst of battling a global pandemic, that number should provide some level of reassurance about the future of the digital advertising industry.