How are marketers in Australia coping with reduced ad budgets during Covid-19?

The Drum 15 Jun 2020 04:08
How are marketers in Australia spending their money?

In times of immense pressure and reduced budgets, there is a natural human reaction to revert to what you know and trust. The same can be said for ad spend but as lockdown measures ease, marketers could find new channels to invest in.

This is reflected in online advertising growth in Australia slowing in the first quarter of 2020, delivering overall year-on-year growth of 3.8%, due to the impact of the post-holiday season, bushfires and Covid-19.

General display, search and directories in Australia declined from the preceding December quarter by 12% and 4% respectively, while classifieds grew 2%, according to the IAB Australia’s Online Advertising Expenditure Report released last month.

Display has suffered from many brands not being able to clearly understand its ROI within their marketing ecosystem, which could explain its significant decline, believes Michael Titshall, vice president and managing director at R/GA Australia.

“However, the growth in classifieds is not necessarily driven by the brands responsible for the decline in other channels but could be due to increased spending from other sectors of the market that have different needs."

However, the report found that ad expenditure experienced healthy growth year on year across search and directories and display, by 6.0% and 2.9% respectively, in the first quarter of 2020, compared to the first quarter of 2019. Classifieds meanwhile, were flat year on year at .02%.

“There is some light at the end of the tunnel as recent research from the IAB shows that approximately 50% of advertisers who had previously pulled spending are now back in market investing, though at mostly at a reduced level.”

Video advertising continued to grow, according to the report, increasing to a 53% share of display advertising, an 18% growth in the same quarter last year.

As much effort and investment is injected into the creation of video assets, she fully believes marketers will continue to use videos as a vehicle to communicate their brand’s message.

“With the emergence of the ‘zombie scroller’ consumer, marketers do not have many options to engage with their audience. On a channel like mobile for example, and considering that the average adult attention span is eight seconds, brands need to effectively capture the attention of their audience efficiently without being intrusive. There’s a lot for marketers to take into consideration in resolving a rather complex equation.”

“In short, we are seeing healthy demand in our video inventory in line with the rest of the industry. We expect video advertising to continue growing as we enter a seasonal period in the year where we find audiences are spending more time indoors and anticipate some residual effect from the lockdown,” he explains.

The percentage of inventory bought directly from advertisers increased to 19%, while 56% of content publisher’s video inventory was bought programmatically.

“The flywheel of growth in programmatic continues as healthy returns empower brands and agencies to seek out more knowledge and education which in turn drives further ad investment,” says Sigaloff.

In addition, Titshall points out almost every brand is focused on winning in customer experience, and connecting it across owned and paid brand touchpoints is crucial.

Where are marketers in Australia spending their money?

Titshall says he is seeing two areas of focus. Firstly, marketers are doubling down on their core business and brand experience. Secondly, their growth investment strategies are moving from many incremental changes to fewer more significant changes, like e-commerce.

“We are anticipating demand for a broad reach and high impact DOOH formats to grow as we see community mobility returning to pre-COVID-19 levels and brands wanting to keep the same level of consolidated budget management, transparency and ROI from the omnichannel programmatic execution.”

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