Even as we worry about when the economy will recover, your clients are wondering how to target shoppers in the new normal? We all want to know how deep the economic damage will be, but your clients can limit the impact by crafting the right kind of promotions once they reopen. The analysts at BIA have researched these topics and issued revised forecasts that can help you and your clients plan a strategy for the next several months.
Based on what’s happened in other countries that were impacted before ours, BIA analysts believe a U‑shaped recovery is more likely than the V‑shaped rebound economists had hoped for. What does that look like? After an estimated 4.8% drop in GDP for Q1, we can expect a 15%-20% decline in Q2. That projection is chilling, but keep in mind that we’re already halfway through Q2. And by Q3, based on what we know now about the spread of COVID-19, we can anticipate a slow return to growth, perhaps on the order of between 1% and 2%.
The corresponding impact on the ad market will be about a 3.6% drop for 2020. That doesn't sound like much, because the decrease will be cushioned by political advertising. Fortunately, most media outlets will experience a cyclical bump this year from political advertising as the November election draws closer. Local media outlets had been expected to earn as much as $161.3 billion this year. Now, analysts believe the number will be more like $144.3 billion.
Impact by Media Format
Not every local media format will be equally affected by the virus. For example, with so many people watching TV to stay updated, the OTA segment of that format won’t experience a big ad sales drop this year. The same holds true for cable TV and online newspapers. Online and mobile advertising will likely experience ad sales jumps when compared to initial projections made back in 2019, especially as these outlets go after retailers and tech marketers.
Because some media formats rely heavily on specific verticals for a large percentage of their ad revenue, they’ll need to try to expand their horizons. Consumers won’t be spending as usual on entertainment and that shift will impact local TV. However, retailers such as drug stores, hardware stores and grocery outlets have been deemed essential businesses and continue to advertise. TV sellers can also pitch their format to political and automotive advertisers.
Target Shoppers in the New Normal
As more states give the green light to resume operations, consumers will be looking for retailer signals about safety. Over half of consumers have concerns about visiting various retail outlets. They’ll be interested in brand messages about safety measures being taken. If a business is operating at limited capacity or for limited hours, that message must be communicated. And, consumers will be feeling financially stressed. Your clients may be able to lure them back with promotions and discounts. To learn more about which consumers respond best to promotional messaging, check out the AudienceSCAN profiles available at AdMall by SalesFuel.