R&R Partners COVID-19 Recovery Media Predictions

By: Fletcher Whitwell, Trisha Kunsman and Karen Rulapaugh

Looking back to February, the past three months feel like three long years. The advertising industry, which has continued to see forward momentum for many years, has never before experienced anything like the COVID-19 crisis. It took years for digital media to overtake traditional, with automated and programmatic most recently sitting atop; but in just a few weeks’ time, it all changed again.

Of that which has changed, what will return to normal? For the things that do not change back what does the “new normal” look like? And how will brands also adjust to be more inclusive of all races in their marketing efforts? This will surely impact advertising going forward with tighter budgets, more emphasis on ROI, and a greater responsibility to produce diverse messaging. One more thing should be certain: Crisis will bring an opportunity to change some of the old traditions that make us everything we preach we are.

As the world is changing and evolving by the day, several things will be paramount for brands to not only survive, but thrive: strategic planning and emphasis on audience analysis; flexibility and agility; inclusive messaging; and lastly, an empathetic eye to the customer.

Themes of the New Normal:

  • Geo-targeting and regionalization will play an important part in the immediate recovery.
  • A renewed emphasis on CRM databases will spotlight the need for owned and paid connectivity.
  • Despite fatigue and the eventual lift of stay-in orders, streaming video and audio will continue to gain momentum.
  • Demand for digital will be back again this fall, with ad calls, CPMs, and search volume back to normal.
  • Additional shift to digital OOH will support the need for flexibility, along with dynamic creative for the same reason.
  • With no Olympics and limited live sports, local broadcasters will rely on news success but need to ensure excess political content doesn’t make for a poor viewing experience.
  • Pauseable and scatter plans will replace out clauses and upfronts.
  • Media partners who will benefit most are those who show as much empathy to agencies as agencies have to clients.
  • A call for change in old-school media processes to ensure diversity and inclusion: better audience targeting, use of more minority-owned media partners, and diverse audience-specific content creation.

Predictions and Recommendations:

Video (Television, CTV)

  • With this year’s national TV upfront in disarray (more options and a resulting decrease in spend), scatter is more advantageous than ever before, particularly through Q3 (MediaPost.)
  • Given the limited production ability in Q2 (Observer), expect that TV’s fall premieres will look different for the first time since the ’50s. Additionally, the structure of TV upfront options will need to change greatly (or go on hiatus for a year), resulting in lower participation from clients (MediaPost).
  • Due to the hit local broadcast took in Q2, expect advantageous rates and incentives to those who get in early for the remainder of 2020. Markets hit hardest by COVID-19 (New York, New Orleans) will take longer to rebound and markets with strong political constituents (Arizona, Texas, Florida, Georgia, Wisconsin, Michigan, Minnesota) will fair best. Many local networks are likely to air more local news based on demand in order to gain back some revenue losses (B+C).
  • Strong NFL Draft ratings (The Hill) show a desire for live sports programming (news programming has replaced this viewing in the interim). Based on PGA and NFL schedules being published, we anticipate some live sports during the second half of 2020, but likely with a different fan experience in the short term.
  • Connected TV is up in viewing and binging, and rates are advantageous (Hulu). CTV is here to stay and, given its targetability and pauseability, will continue to gain ground on terrestrial TV. This includes CTV gaining its share in political advertising, although daytime viewing will go down as stay-in orders are lifted.

Audio (Terrestrial, Streaming)

  • Radio listenership dipped slightly, but is now steadily climbing. Most notably, daytime and weekend dayparts are stronger and an important part of the current mix.
  • Similar to local TV, expect that local radio will have advantageous pricing through Q3 to woo back clients and capitalize on geo/regional client spending.
  • Streaming subscriptions and podcasts are up. These will continue to thrive as consumers become more loyal. 

Out-of-Home (Outdoor, Cinema)

  • Overall, OOH is one of the hardest hit channels during COVID-19. As a result, expect digital and programmatic OOH to benefit long term by capitalizing on instant gratification (messaging, pausing, boosting).
  • Cinema and in-venue (stadiums, grocery, malls) OOH will be a slow rebuild, likely not recovering until 2021. Further, cinema needs to focus efforts on network and studio negotiations to avoid future digital-exclusive releases (Verge).
  • Similar to national TV, given that so many clients had to negotiate outs and reprieves as a result of COVID-19, 28-90 day out clauses need to become in-line with other local media at 0-14 days.
  • Americans will be traveling more by car than air and taking vacations closer to home this summer. Billboards may become more valuable than ever as a result (Adweek).

Print (Magazine, Newspaper)

  • Local newsprint is relying more and more on online editions, with increased traffic due to reader demand for “news in their neighborhood.” Brands like The New York Times and The Washington Post have become staples in the daily news cycle, but this digital increase hasn’t stopped the numerous newspaper layoffs, reduced staff, or shuttering completely (Fortune).
  • In a further blow to the once treasured magazine industry, magazines have taken an added hit to advertising, and have lost almost all newsstand/airport sales currently. Long lead times and digital monetization are the continued must-solves for magazines to survive (Forbes).

Digital (DSP, Social, Search)

  • Social is not only surviving, but thriving throughout the COVID-19 crisis. Yes, they felt the lower demand pinch, but proved to be a safe contextual environment. Plus, TikTok emerged as a formidable player (eMarketer).
  • Supply is up; demand is down, with publishers on the short end of the stick with a lowest-bid model.
  • Search will continue to play a vital role for recovery as consumers begin to travel, purchase and book more frequently. It’s important to monitor performance and optimizations on a very frequent basis, and clients should also begin to loosen their COVID-19 block lists as not to miss out on “safety” and “reopening” content (Searching COVID-19).
  • Similar to imminent changes in TV upfront and OOH out clauses, digital needs to use COVID-19 as a time to end auction bid duplication with reselling of inventory across multiple exchanges, and instead, ensure inventory is sourced directly from publishers (Digiday).

In Conclusion:

  • As clients and consumers emerge from COVID-19, there is extensive research focused on the past three months. Through our own research and findings, we recommend focusing on recovery, with these key areas in mind:
  • Identify your customer segments most likely to travel and purchase, through qualitative research or mining of your past guest database, then weigh and balance risk factors to prioritize those near-term customers.
  • As flight routes and borders gradually open back up for long-haul travel, consumers will prioritize open roads and outdoor spaces, along with supporting local communities.
  • Balance safety concerns with desired customer experience: Many are looking for escape and connection out of the gate. Align paid and owned efforts to reinforce a balanced message.
  • Think about how diversity must be included at the onset of an initiative with better audience planning, targeting, buying and content creation.

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