The worst period may pass.
Editor’s note: This article comes from the WeChat public account “Feishu Shennuo Group” (ID: sino_group) author: flying book deep Snow.
Due to the new crown epidemic, the global digital advertising industry will be hit hard. Perhaps some of them are exaggerated, and the actual situation may not be so bad.
Recently, digital advertising giants Google and Facebook, which account for more than half of the global digital advertising market, have successively announced their first quarter 2020 financial results. The financial report shows that Google ’s advertising revenue is 33.76 billion US dollars, which is an increase of about 10% compared with the first quarter of 2019. Although the growth rate slowed, this result still encouraged investors; Facebook ’s advertising revenue was 17.44 billion. The dollar, which grew 17% year-on-year, also exceeded Wall Street’s expectations.
Of course, both Google and Facebook admit that this encouraging start is more due to the strong performance in January and February, because their advertising business was indeed hit in March. The results of the second quarter, It may reflect the degree of loss better.
Despite this, we still have enough reasons to remain optimistic.
01 Some industries are increasing advertising investment
The epidemic has brought unprecedented challenges to the market, but it has not endangered all industries.
Industries that have been hit hard by the epidemic, aviation, tourism, hotels, etc., are indeed cutting or even suspending advertising expenditures, but other industries are increasing, such as telecommuting, streaming media, social media, games, delivery Wait. The epidemic has brought opportunities to these industries.
Analysis company BrandTotal found that in the first two weeks of March, Amazon Prime Video, HBO, Instacart, Uber Eats and other brands have been increasing social media advertising spending. And American communication software companies including Zoom and Slack invested 45 million US dollars in the first quarter of 2020, almost three times that of any quarter in 2019.
FaThis is what cebook embodies. The company’s financial director David Wehner said in a conference call after the financial report that at the end of the first quarter, in the travel and automotive industries, there has indeed been a decline, but “in some areas, such as the game field, have seen relative growth.” Although the growth of the advertising business in the field of e-commerce is not as strong as games, it has also seen signs of stabilizing, “all these trends will continue into the second quarter.”
02 Brand advertising is affected, But direct-acting advertising has driven ad revenue growth
Google and Facebook both mentioned in their financial reports that direct advertising was an important factor driving the growth of advertising revenue in the latter part of the first quarter.
Direct advertising is an advertisement that can directly prompt users to take action, such as clicking a link, using a coupon password, or downloading application software. It can help advertisers maximize the effectiveness of advertising costs through the immediate response of the audience, and it is easier to measure, because advertisers can immediately see how many people clicked the link or took action after seeing the advertisement.
Especially nowadays, sales personnel are reducing expenditures, the demand for digital advertising is decreasing, and advertising prices are falling. This is a good time for direct-acting advertisers.
Wehner said that although the spending of advertisers looking for offline development opportunities or already at the top of the brand funnel is declining, “those advertisers that have achieved good revenue through advertising are constantly spending money” In this way, Facebook also expects that direct-effect advertising will continue to promote advertising sales, and the new crown epidemic will only enhance the importance of this strategy.
YouTube is showing the same trend. For a long time before, YouTube was looking for brand advertisers, but this time, many companies withdrew their brand budgets, and promotional activities maintained a strong growth momentum. “Throughout the entire quarter, direct advertising continued to maintain a substantial year-on-year growth,” Ruth Porat said. Among them, CEO Sundar Pichai pointed out that YouTube has attracted the most attention in the field of application installation and games.
03 The worst period may pass
There are signs that the digital market may have bottomed out, and April should be about the same as March-there will be no significant improvement, but it will not decline sharply.
Google ’s chief financial officer Ruth Porat said in early April that since the end of March, the revenue of the search business has not declined further year-on-year, and YouTube ’s direct advertising revenue has remained strong.
Facebook also rarely released some financial information for the second quarter in advance. It said that it had seen “signs of stability” in the first three weeks of April, and its advertising revenue was basically flat compared with the same period last year.
In the latest report released by the IAB at the end of April, it surveyed media buyers ’advertising spending plans from March to June. Compared with the previous survey in March, the digital advertising spending expectations have been lower than expected, but have improved.
The IAB ’s March survey revealed that ad buyers expect their digital advertising budget to decrease by an average of 33% in the second quarter, while the April survey revealed that they may decrease by an average of 29%. Among them, search and social media are most likely to rebound.
Especially in the past week or so, the mood of advertisers seems to have changed, and many advertisers are beginning to spend again. For example, in the case where the tourism industry has suffered the most, it is worth noting that some online travel agencies (OTAs) have resumed paid search ads, and Trivago and Booking are now placing paid search ads. Trip Advisor, AppleVacations, Omni Hotels, Norweigan Cruise Lines, Sandals Resorts and other travel companies have also placed ads on Google and Bing.
04 Advertisers step up to seek new opportunities
Despite many unknowns and challenges, many advertisers and agencies have begun to focus their energy on the next stage.
The latest IAB survey found that due to the different protection policies for the epidemic in different regions, in terms of advertising positioning and purchasing strategies, advertising buyers are more interested in nationally and locally located ads, and tend to use more well-known, Larger media publishers.
By contrast, between March and April, the number of ads purchased for demographics and buying interests declined. This may be due to the drastic changes in consumer behavior, resulting in a reduction in the return rate of the existing audience.
WhetherHow to change, 73% of advertisers said they are revising or developing new creative projects. Of those who are updating their creatives, 58% said they plan to mention the coronavirus (COVID-19) in their advertisements, or somehow reflect the current uncertain environment.
On the other hand, some foreign media published a poll on Twitter to find out whether companies have begun to resume or increase their online advertising spending. The survey was only open for a few hours and received feedback from 72 practitioners. Among them, 50% said they or their customers have begun to increase spending, and another 25% said they might do so soon.
The media also conducted a more in-depth conversation with a number of practitioners participating in the survey and found some marketing phenomena that are currently occurring:
Regroup and change the original marketing method
Jason Hartley, 360i ’s executive vice president of search and shopping, said, “Many companies that decide to suspend or withdraw advertising are not panicking, but are rethinking and developing new plans. We know that online sales are a trend, although now Less than 100% of online sales, but this is likely to happen in the near future. “Changing the current marketing strategy is an inevitable trend for enterprises to transition to digital.
The current market environment may become a new normal
When the epidemic is over, all companies should re-examine their goals and directions. Ron Adams, head of digital marketing agency Engage Media, seems to have found the feeling, “Yes, most customers are beginning to accept their new location and new environment. They are making advertising decisions based on the new situation, and advertising revenue is Restore. “
Turn passive to active
Enterprises start to think about what they can do to maximize their future profits and status in the current situation. The future is difficult to predict completely, but the opportunity will definitely be left to the prepared company. Therefore, it is currently wise to formulate different plans for different situations.
Everyday is Black Friday
Digital advertising consultant Josh Yates said: “Since April 15th, every dayMy e-commerce customers are as crazy as Black Friday. Although we do not know how long it can last, at present, most e-commerce customers have sufficient budgets. “
Consumer behavior will have long-term effects
Andrew Goodman, president of Page Zero Media, a digital marketing agency, believes that online retailers will be in a long-term growth model in the future. Although many people see Facebook ’s current cost-per-thousand impressions increase, Goodman expects that paid search ad bids will continue to decline in the coming period, and there will be more “free” traffic, so the ROI will be higher.
05 Conclusion
Previously, the report that the digital advertising market ended due to the outbreak of the New Crown epidemic was overblown. Some current market signs also indicate that the most unfavorable stage may be over.
As mentioned above, due to the impact of the epidemic, companies may reduce expenditures or decline in demand for digital advertising, but it is also at this time that advertising prices will fall, and direct advertising advertisers will seize opportunity. Crisis and opportunity always coexist.
Despite this, digital media platforms are still very cautious about this in view of economists ’predictions of the global economic downturn in the second quarter. As David Wehner, Facebook’s chief financial officer, said on the earnings conference call, “If history is a guide, it will herald a more serious era of advertising crunch.”
References:
1. emarketer.com:
2. marketingland.com:
3. marketingland.com:
Google and Facebook both mentioned in their financial reports that direct advertising was an important factor driving the growth of advertising revenue in the latter part of the first quarter.
Direct advertising is an advertisement that can directly prompt users to take action, such as clicking a link, using a coupon password, or downloading application software. It can help advertisers maximize the effectiveness of advertising costs through the immediate response of the audience, and it is easier to measure, because advertisers can immediately see how many people clicked the link or took action after seeing the advertisement.
Especially nowadays, sales personnel are reducing expenditures, the demand for digital advertising is decreasing, and advertising prices are falling. This is a good time for direct-acting advertisers.
Wehner said that although the spending of advertisers looking for offline development opportunities or already at the top of the brand funnel is declining, “those advertisers that have achieved good revenue through advertising are constantly spending money” In this way, Facebook also expects that direct-effect advertising will continue to promote advertising sales, and the new crown epidemic will only enhance the importance of this strategy.
YouTube is showing the same trend. For a long time before, YouTube was looking for brand advertisers, but this time, many companies withdrew their brand budgets, and promotional activities maintained a strong growth momentum. “Throughout the entire quarter, direct advertising continued to maintain a substantial year-on-year growth,” Ruth Porat said. Among them, CEO Sundar Pichai pointed out that YouTube has attracted the most attention in the field of application installation and games.
03 The worst period may pass
There are signs that the digital market may have bottomed out, and April should be about the same as March-there will be no significant improvement, but it will not decline sharply.
Google ’s chief financial officer Ruth Porat said in early April that since the end of March, the revenue of the search business has not declined further year-on-year, and YouTube ’s direct advertising revenue has remained strong.
Facebook also rarely released some financial information for the second quarter in advance. It said that it had seen “signs of stability” in the first three weeks of April, and its advertising revenue was basically flat compared with the same period last year.
In the latest report released by the IAB at the end of April, it surveyed media buyers ’advertising spending plans from March to June. Compared with the previous survey in March, the digital advertising spending expectations have been lower than expected, but have improved.
The IAB ’s March survey revealed that ad buyers expect their digital advertising budget to decrease by an average of 33% in the second quarter, while the April survey revealed that they may decrease by an average of 29%. Among them, search and social media are most likely to rebound.
Especially in the past week or so, the mood of advertisers seems to have changed, and many advertisers are beginning to spend again. For example, in the case where the tourism industry has suffered the most, it is worth noting that some online travel agencies (OTAs) have resumed paid search ads, and Trivago and Booking are now placing paid search ads. Trip Advisor, AppleVacations, Omni Hotels, Norweigan Cruise Lines, Sandals Resorts and other travel companies have also placed ads on Google and Bing.
04 Advertisers step up to seek new opportunities
Despite many unknowns and challenges, many advertisers and agencies have begun to focus their energy on the next stage.
The latest IAB survey found that due to the different protection policies for the epidemic in different regions, in terms of advertising positioning and purchasing strategies, advertising buyers are more interested in nationally and locally located ads, and tend to use more well-known, Larger media publishers.
By contrast, between March and April, the number of ads purchased for demographics and buying interests declined. This may be due to the drastic changes in consumer behavior, resulting in a reduction in the return rate of the existing audience.
WhetherHow to change, 73% of advertisers said they are revising or developing new creative projects. Of those who are updating their creatives, 58% said they plan to mention the coronavirus (COVID-19) in their advertisements, or somehow reflect the current uncertain environment.
On the other hand, some foreign media published a poll on Twitter to find out whether companies have begun to resume or increase their online advertising spending. The survey was only open for a few hours and received feedback from 72 practitioners. Among them, 50% said they or their customers have begun to increase spending, and another 25% said they might do so soon.
The media also conducted a more in-depth conversation with a number of practitioners participating in the survey and found some marketing phenomena that are currently occurring:
Regroup and change the original marketing method
Jason Hartley, 360i ’s executive vice president of search and shopping, said, “Many companies that decide to suspend or withdraw advertising are not panicking, but are rethinking and developing new plans. We know that online sales are a trend, although now Less than 100% of online sales, but this is likely to happen in the near future. “Changing the current marketing strategy is an inevitable trend for enterprises to transition to digital.
The current market environment may become a new normal
When the epidemic is over, all companies should re-examine their goals and directions. Ron Adams, head of digital marketing agency Engage Media, seems to have found the feeling, “Yes, most customers are beginning to accept their new location and new environment. They are making advertising decisions based on the new situation, and advertising revenue is Restore. “
Turn passive to active
Enterprises start to think about what they can do to maximize their future profits and status in the current situation. The future is difficult to predict completely, but the opportunity will definitely be left to the prepared company. Therefore, it is currently wise to formulate different plans for different situations.
Everyday is Black Friday
Digital advertising consultant Josh Yates said: “Since April 15th, every dayMy e-commerce customers are as crazy as Black Friday. Although we do not know how long it can last, at present, most e-commerce customers have sufficient budgets. “
Consumer behavior will have long-term effects
Andrew Goodman, president of Page Zero Media, a digital marketing agency, believes that online retailers will be in a long-term growth model in the future. Although many people see Facebook ’s current cost-per-thousand impressions increase, Goodman expects that paid search ad bids will continue to decline in the coming period, and there will be more “free” traffic, so the ROI will be higher.
05 Conclusion
Previously, the report that the digital advertising market ended due to the outbreak of the New Crown epidemic was overblown. Some current market signs also indicate that the most unfavorable stage may be over.
As mentioned above, due to the impact of the epidemic, companies may reduce expenditures or decline in demand for digital advertising, but it is also at this time that advertising prices will fall, and direct advertising advertisers will seize opportunity. Crisis and opportunity always coexist.
Despite this, digital media platforms are still very cautious about this in view of economists ’predictions of the global economic downturn in the second quarter. As David Wehner, Facebook’s chief financial officer, said on the earnings conference call, “If history is a guide, it will herald a more serious era of advertising crunch.”
References:
1. emarketer.com:
2. marketingland.com:
3. marketingland.com:
Despite many unknowns and challenges, many advertisers and agencies have begun to focus their energy on the next stage.
The latest IAB survey found that due to the different protection policies for the epidemic in different regions, in terms of advertising positioning and purchasing strategies, advertising buyers are more interested in nationally and locally located ads, and tend to use more well-known, Larger media publishers.
By contrast, between March and April, the number of ads purchased for demographics and buying interests declined. This may be due to the drastic changes in consumer behavior, resulting in a reduction in the return rate of the existing audience.
WhetherHow to change, 73% of advertisers said they are revising or developing new creative projects. Of those who are updating their creatives, 58% said they plan to mention the coronavirus (COVID-19) in their advertisements, or somehow reflect the current uncertain environment.
On the other hand, some foreign media published a poll on Twitter to find out whether companies have begun to resume or increase their online advertising spending. The survey was only open for a few hours and received feedback from 72 practitioners. Among them, 50% said they or their customers have begun to increase spending, and another 25% said they might do so soon.
The media also conducted a more in-depth conversation with a number of practitioners participating in the survey and found some marketing phenomena that are currently occurring:
Regroup and change the original marketing method
Jason Hartley, 360i ’s executive vice president of search and shopping, said, “Many companies that decide to suspend or withdraw advertising are not panicking, but are rethinking and developing new plans. We know that online sales are a trend, although now Less than 100% of online sales, but this is likely to happen in the near future. “Changing the current marketing strategy is an inevitable trend for enterprises to transition to digital.
The current market environment may become a new normal
When the epidemic is over, all companies should re-examine their goals and directions. Ron Adams, head of digital marketing agency Engage Media, seems to have found the feeling, “Yes, most customers are beginning to accept their new location and new environment. They are making advertising decisions based on the new situation, and advertising revenue is Restore. “
Turn passive to active
Enterprises start to think about what they can do to maximize their future profits and status in the current situation. The future is difficult to predict completely, but the opportunity will definitely be left to the prepared company. Therefore, it is currently wise to formulate different plans for different situations.
Everyday is Black Friday
Digital advertising consultant Josh Yates said: “Since April 15th, every dayMy e-commerce customers are as crazy as Black Friday. Although we do not know how long it can last, at present, most e-commerce customers have sufficient budgets. “
Consumer behavior will have long-term effects
Andrew Goodman, president of Page Zero Media, a digital marketing agency, believes that online retailers will be in a long-term growth model in the future. Although many people see Facebook ’s current cost-per-thousand impressions increase, Goodman expects that paid search ad bids will continue to decline in the coming period, and there will be more “free” traffic, so the ROI will be higher.
05 Conclusion
Previously, the report that the digital advertising market ended due to the outbreak of the New Crown epidemic was overblown. Some current market signs also indicate that the most unfavorable stage may be over.
As mentioned above, due to the impact of the epidemic, companies may reduce expenditures or decline in demand for digital advertising, but it is also at this time that advertising prices will fall, and direct advertising advertisers will seize opportunity. Crisis and opportunity always coexist.
Despite this, digital media platforms are still very cautious about this in view of economists ’predictions of the global economic downturn in the second quarter. As David Wehner, Facebook’s chief financial officer, said on the earnings conference call, “If history is a guide, it will herald a more serious era of advertising crunch.”
References:
1. emarketer.com:
2. marketingland.com:
3. marketingland.com:
Previously, the report that the digital advertising market ended due to the outbreak of the New Crown epidemic was overblown. Some current market signs also indicate that the most unfavorable stage may be over.
As mentioned above, due to the impact of the epidemic, companies may reduce expenditures or decline in demand for digital advertising, but it is also at this time that advertising prices will fall, and direct advertising advertisers will seize opportunity. Crisis and opportunity always coexist.
Despite this, digital media platforms are still very cautious about this in view of economists ’predictions of the global economic downturn in the second quarter. As David Wehner, Facebook’s chief financial officer, said on the earnings conference call, “If history is a guide, it will herald a more serious era of advertising crunch.”
References:
1. emarketer.com:
2. marketingland.com:
3. marketingland.com: