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It’s not just Coke — the entire soda sector has slashed ad spending

Digiday 01 May 2020 04:00
May 1, 2020 by Lara O'Reilly

The advertising industry’s optimistic mantra to spend through a recession so that your brand comes out the other side stronger doesn’t appear to be getting through to soft drinks companies during this particular crisis.

An analysis of 11 different brands in the U.S. soda sector by iSpot.tv, requested by Digiday, found that soda advertisers spent 78% less on national TV ads between Mar. 16 and Apr. 26 — down to $22.5 million.

Source: iSpot.tv

The cancelation of live sports has hit spending — at this point in the year in 2019, almost half (47%) of soda brands’ TV spending was directed toward the NCAA Tournament, NBA and NHL, according to iSpot.tv.

But the lack of live sports doesn’t tell the full picture. This slump is largely down to a loss in sales following the closure of bars, restaurants, movie theaters and stadiums — plus the decline in impulse purchases made at convenience stores — during the quarantine period.

Coca-Cola has been particularly impacted by the lockdown-enforced shift in consumption habits. Net sales fell 1% in the three months to the end of March, versus the year-ago quarter. But Coca-Cola said its when reporting earnings on Apr. 21 that April sales volumes had slumped by 25%.

As with many of the advertising trends during this crisis, the situation is constantly changing as companies recalibrate and reforecast. Ad spend will likely return as companies’ sales recover, it’s just not entirely clear when that will be.

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CocaColaMtn DewPepsiCoJames Quincey
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