New reports paint a mixed picture for ad spend as the effects of coronavirus continue to be felt. A sharp rise in social media spend is not enough to offset wider declines.
The takeaways:
- Global social media ad spend has jumped 56.4% in Q3 2020 compared to Q2, according to a report. Ad spend on Facebook and Instagram is also up on this time last year by 27.6%.
- But overall US digital ad spending is forecast to grow just 1.7% this year; a steep decline from 2019’s 19.2% growth.
- The latest IPA Bellwether report shows UK ad spend has plunged for the third quarter in a row thanks to a cocktail of COVID restrictions, Brexit, and economic uncertainty.
Strength in social
Brands are spending more on social than they did this time in 2019. The average spend is now close to double that recorded during the most severe point of the pandemic in March.
- FMCG food saw a 61.3% jump, auto up 59.4%, and finance up 35.5% as particularly strongly performing categories.
- Instagram continues to dominate performance, with the audience reach of its 50 largest brand profiles standing 34.7% higher than those on Facebook. However, the majority of all brand posts are still published on Facebook.
Boycott? What boycott: A Facebook ad boycott in July led by a number of prominent brands including Unilever and Verizon seems to have had little effect. Despite over 1,000 brands participating as part of a #StopHateForProfit campaign, ad spend and reach on Facebook has barely been dented.
- Facebook ad reach in Northern America increased by 134.9% compared to the previous year, while in Latin America it increased by 49.7%.
However, the wider digital ad spend picture is looking less pretty.
- eMarketer expects a ‘huge deceleration in growth’ with digital ad spend across all industries, with media forecast to contract 9.3% this year.
- However, it is still anticipating a bounceback in 2021 of 14.2%; in line with growth in 2019.
Triple whammy
The UK is struggling with not just COVID, but also declining consumer confidence and Brexit on the horizon. In the three months to October, UK ad budgets were reduced drastically, representing the second-biggest decline since records began.
- Over half of respondents to the IPA report recorded a decrease in Q3 marketing budgets.
- Assuming restrictions don’t lift, the Bellwether report forecasts a -23.3% fall in ad spend for the year as a whole.
Yes but: The IPA’s Director General Paul Bainsfair reminded readers of evidence that proves that those who can invest in marketing during the downturn will reap rewards in the longer term.
