How Covid-19 changed the advertising industry


Times Square in New York City.

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Around this time last year, Jeff Green, CEO of The Trade Desk, watched advertisers start stopping every campaign they could.

The ad tech manager said in the early days of the pandemic digital advertising was at a disadvantage. It was easier for advertisers to flip the switch and stop spending when trying to figure out what to do. But in the months that followed, as the marketing dollars began to turn on again, it became clear that they were flowing online.

“Everyone becomes more data-driven and agile during a recovery because every dollar has to count,” said Green. “Then it really accelerated for us. We were injured disproportionately in the first month. And since then we have benefited disproportionately from it.”

The Trade Desk saw firsthand how certain parts of the advertising industry were catapulted years later when consumers stayed at home during the pandemic. Digital reigned supreme: flexible purchases, the ability to swap messaging and direct response purchases that clearly showed the return on investment, were in great demand with many advertisers, who often had no idea what was going to happen in the next month or should happen even for the next week. would look like.

These themes allowed great advances in areas like connected television and e-commerce marketing, where the pieces were already in place for growth but fueled the pandemic. And the way the ad industry may have changed how the process works, too.

“These things were already happening,” said Barak Kassar, co-founder of the independent creative agency BKW Partners. “And it just made it faster.”

Experts and executives in the field spoke to CNBC about three areas where the advertising industry made a leap forward during the pandemic.

Connected television

The streaming binge began as soon as the pandemic bans kicked in in March. Platforms like Peacock from NBCUniversal and HBO Max from WarnerMedia were launched when people were forced to stay at home. And since different states had different rules for gatherings and store openings, and the rules changed day by day, advertisers making placements on television also wanted the ability to be flexible with purchases and news, so that linear television agreements in were not easy in the past.

When calling The Trade Desk for Q1 2020 in May, Green said he expected a “revolution” in streaming TV. His company, which helps brands and agencies reach audiences across media formats and devices, is increasingly present in this category. But Green had expected this revolution to take place over a number of years. It took months.

Since then it has gotten even faster: “If we crammed two years in the first six months, we crammed another three years in the next six months,” he said. “It felt like five years of change in 2020.”

Everyone was at home watching more videos and commute time was in many cases allocated to media consumption. Films were released via streaming. Cable cutting was on the rise: eMarketer predicted late last year that more than 6 million U.S. households had canceled their pay-TV subscriptions in the past year, and spending on television advertising was down 15% to its lowest level since 2011.

Lauren Hanrahan, CEO of Publicis Groupe’s-owned media agency Zenith USA, said things in the room had changed forever.

“It’s not that 2020 was the year for connected television, but now back to our regular media mix,” she said. “This consumer behavior has changed permanently. And we have to adapt where and how we reach them.”

Kasha Cacy, global CEO of the agency group Engine, believes the pandemic has pushed CTV forward by five to seven years.

“I used to work at Sony Pictures and the idea of ​​having a movie broadcast on a streaming platform was like blasphemy,” she said. “And now this barrier has been broken.”

She said factors like Google’s move away from third-party cookies in its Chrome browser have continued to position CTV well.

“The combination of Google’s announcement regarding cookies and identity and the fact that CTV is out of their control is likely to pour in ad dollars as well,” she said.

E-commerce

Brands and platforms have been working for years to get consumers across the idea of ​​buying something they haven’t seen, touched, or tried on. But over the past year many consumers have had no choice but to go online to order groceries, essentials and other items.

According to the US Census Bureau in February, Americans spent $ 791.7 billion on e-commerce in 2020, up 32.4% from 2019. And although physical store shopping may resume after restrictions are lifted Gaining traction, retail has changed forever.

Zenith’s Hanrahan said that growth is not just being seen in a single population group or audience, but across the board.

“I think there is a real stickiness there, I think there is a consumer behavior that has now been built,” she said. “If you have ordered several times from a platform on your phone and this app is now on your phone, you have adopted this behavior.”

The surge in e-commerce – and its tailwinding effect on digital ad growth – was evident in the performance of companies like Snap, which augmented reality advertisers turned to for virtual “try-ons” as many retailers’ locker rooms remain closed and Staying there were new precautions when sampling items like makeup. Pinterest was another beneficiary as shoppers scoured the platform for inspiration and shopped along the way.

eMarketer forecast in the fall that marketers would spend $ 17.37 billion on advertising on ecommerce websites and apps in 2020, up 38% from 2019. And the trend is unlikely to die: Hanrahan added, that the growth pattern goes hand in hand with e-commerce.This can be seen in a market like China, which is far more advanced in this area.

“I think the biggest indicator that we are not going to go back to the past and drop all of these behaviors is that it is only accelerating in other countries that are passing this tipping point,” she said.

Brendan Gahan, partner and chief social officer at advertising agency Mekanism, agreed that a new base would be established, even if things are “normal” again. He said that so much e-commerce reduces friction and helps people save time. This is a benefit that will not go away even if people can shop in stores more safely when they want.

“Whenever the world goes back to normal, that adoption base will be much higher than if the pandemic had never happened,” he said. “It might recede a little at first. But there’s no going back.”

Gahan said the pandemic may also have cemented influencer status for some marketers.

“From a production standpoint, there weren’t really many options for some marketers in the early days of the pandemic,” he said. He said some brands that hadn’t worked much with the creators tried. And the dollars shifted even more to the developers: A report from influencer marketing platform CreatorIQ said that sponsored posts on the sales weekend after Thanksgiving were up 46.6% year over year.

flexibility

Last year was kind of a “right place, right time” for We Are Rosie, a community of independent marketing professionals founded by Stephanie Nadi Olson in 2018.

Forrester Research forecast last year that the U.S. advertising agency sector would cut 52,000 jobs in 2020 and 2021 due to spending cuts. Flexible marketing organizations were a place these people could turn to.

“Covid has accelerated the inevitable,” Olson said. “That came. What Covid did is pour gasoline into the situation.”

The company has worked with big companies like Bumble, WW, Nextdoor, and LinkedIn, growing its annual projects from 25 in the first year. Olsen said it was already on track to make 1,000 in 2021.

We Are Rosie’s talent base determines the range. Some don’t live in big markets. Some take care of family members. Some have medical problems or are terminally ill. Some are war veterans. They represent race, age, education, and geographic diversity. This type of talent has often been excluded or unable to compete in the ranks of a predominantly white industry that often wants its employees to be in key markets.

“I think we had to be strangely forced to really realize all the excuses and all the hurdles we were going to [give as reasons] that this would never work, “said Olson. She said the industry has traditionally assumed that creative work must be done with everyone in the same room.

“We saw it,” she said. “Creativity flourishes and broad lines, we’ll do it, the work is still going.”

Olson believes the past year will see a permanent change in how the industry works. She believes that talent who want flexibility to work with brands who want project work and agility on their side will equate some of those permanent changes.

“I think the loss of the binary thought, either in the house with full-time workers or when you give it to an agency or consulting firm, is over forever,” she said. “The rise of the flex talent … is here to stay.”

According to Engine’s Cacy, the company recently conducted a national survey that found that nearly 80% of working mothers would like to continue working from home. Cacy said the company is considering flexible models that would make this possible.

“In an industry that is trying to get more women into leadership positions, in an industry where we’re trying to bring more diversity to the workforce, the idea of ​​being able to offer this to employees and going into different markets outside of New York to find talent, especially different talents, there’s something really appealing about that, “she said.



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