Like passengers on the deck of the Titanic, no one living in 2019 could have predicted the toll of the Coronavirus on the global economy in 2020.
As digital marketers, it felt like we were heading into the roaring 2020s. Flapper dresses, gilded everything, and plenty of hooch. Yes, it seemed like the good times were here again. Then COVID-19 landed and infected everything.
Back in April, when the lockdowns first hit, we shared how COVID-19 was radically changing consumer behavior. I guess being stuck at home with a credit card and high-speed internet made us go a little crazy.
So far this year, we’ve bought more products on Amazon and other marketplaces than ever before. We’re searching more on Google, sharing on social media, and relying on video to stay connected to friends and family.
The telecommunications industry must be wringing their sweaty hands with glee.
Like everyone else, we did not realize how bad things could get. Only now, nearly 10 months later amid a second wave, are we beginning to grasp the enormity of what has happened to our world.
Visualizing Advertising’s Major Upheaval
Back in January, analysts at the World Advertising Research Center estimated that global advertising investment would grow at a 7.1% clip in 2020.
They expected total marketing dollars across the world’s biggest advertising spenders to increase. Forecasts like the one below from Lek in 2015 presented a consistent year-on-year increase in ad spending.
Everything looked great!
Today, survey data and consumer trends show we’re entering the deepest global recession since the Great Depression. This despite record spending (over $14 Billion according to the New York Times) during the 2020 presidential campaigns.
Even though 2020 advertising spend is forecasted to cliff-dive by almost 13%, this figure excludes political advertising. Without political spending, the decline becomes a slightly-more-manageable 7.6%.
No matter how you slice it, coronavirus has kneecapped the upward trend of 20 years of ad spending in the U.S. Levels that may take years to recover.
For the rest of 2020 and through 2021, analysts forecast a brutal contraction of nearly 8.2% in media spending. A decline of nearly $50 billion due to the pandemic’s effect on consumer behavior.
James McDonald, Head of Data Content at WARC warns,
Winners and Losers
Lot’s of money evaporated this year. But, for some, the writing was already on the wall. The traditional advertising industry was already dropping. COVID-19 just made things worse.
Visual Capitalist confirms,
Have been for a long time.
Think about it…
With people stuck indoors, traditional media formats such as out-of-home advertising have less effect. Fewer eyeballs on billboards and outdoor advertising means more eyeballs on mobile phones, apps, and websites.
Inbound Marketing To The Rescue
So what’s replacing traditional advertising? Online media. Digital marketing activities like content marketing, and inbound marketing strategies are growing exponentially because they match post-COVID-19 customers’ shopping habits.
These digital marketing strategies are also easier to measure, track, and report ROI.
For businesses looking for more bang for their marketing buck, digital marketing can be wildly more effective in driving audience engagement and tracking real ROI.
Think about your own habits. Have you changed how you shop online? We predict that companies who shift their marketing spend away from traditional activities like trade shows and events to inbound marketing will continue to see significant growth.
We’re already seeing it.
We have customers that went from zero online leads in 2019, to four or five sales qualified leads a month through their website! As the graphic above shows, we’re using content marketing to deliver extraordinary engagement for our customers online.
Bottom line: inbound marketing works.
What are you going to do?
COVID-19 sliced the percentage of spend in advertising for many industries. The question is, is this a temporary trend or a structural shift? We think it’s the latter. We’re helping our clients adjust accordingly. We advise you to do the same.