Ad buyers expect a 20% cut in budgets this year compared to 2019 because of the coronavirus pandemic and its subsequent economic effects, finds a survey by the Interactive Advertising Bureau (IAB).
Digital media, however, will lead the recovery, particularly in the second half of this year – up 13% compared to the same period last year, the survey forecasts. Linear TV, by contrast, will see no growth in the third quarter and a decline in the fourth.
But the decline in linear is not because ad buyers are abandoning it. Instead, the IAB says, it is seeing traditional TV budgets moving to OTT/CTV. In fact, agencies say they expect to increase investment by 46% over the whole of 2020, compared to 2019. Brand executives say CTV/OTT spend will go up by 32%.
The survey, COVID impact on Ad Spend 2020: The Transformation of the Television Marketplace, shows that 41% of buyers’ ad budget is likely to be spent on TV/video media buying for Upfront/NewFront deals on traditional TV and digital video platforms during the 2020/2021 TV season.
Despite widespread calls for more calendar-year television ad buying, the survey suggests little change. All TV/video buyers expect 33% of media schedules to be tied to broadcast-year deals, 36% to calendar deals and 32% scatter. This shows little change from historic ad spend allocation.
Almost half of buyers say they are confident their budgets are stable for the rest of this year, but that confidence declines markedly when looking ahead to next year.
“Price efficiency” is the primary negotiating issue, the report shows, cited by 50% of those surveyed. It was followed by custom audience guarantees (35%), business outcome guarantees (34%), and shorter cancellation options (31%).
Buyers overwhelmingly (72%) say NewFronts are more important than ever before, but almost half of them say they want to see NewFronts and Upfronts merge; one of the main reasons is to better understand measurement and research.
The survey was carried out between May 29 and June 8, and involved 148 media executives, including buyers, planners, and brand executives.
Sourced from IAB