With cost-per-acquisition going through the roof, events cancelled, travel halted, and consumers staying home, the COVID-19 crisis could be a turning point (or breaking point) for the advertising industry. Here’s what you need to know...
1. Cost-per-acquisition is through the roof on digital channels, and conversion is down.
Photo: Neil Patel
From the increase in social media usage to spikes in streaming services, cost-per-acquisition is at an all time high right now. Higher usage means higher ad spend, and the more consumers are spending time indoors, the more this will increase over the coming weeks or even months.
Because many direct-to-consumer brands are conversion-focused, not full customer journey-focused, and this crisis will weed out brands that are only driving towards the transaction.
2. Traditional advertising budgets will be cut and moved to digital.
A survey of brands in China at the end of February showed that 7% had stopped advertising completely and 14% moving their budgets from offline spend to online. This same pattern is starting to take shape in the US as well.
According to CNBC, Advertising analysts and researchers say if the coronavirus remains more contained with more minor disruption, any displaced ad budgets could be reallocated for later this year or for digital channels.
If you haven’t tested connected TV ads, now is the time as streaming numbers grow. Here at BuzzShift, we’ve found a lot of success for CPG brands with a combination of Streaming ads, Facebook ads, and Instagram ads.
3. Online shopping will continue to increase.
Online shopping will continue to increase, especially through major retailers like Amazon. Consumers will shop for essential items and cut budget when possible, but THIS is the time to nurture existing relationships with customers through digital.
4. Messaging will be more crucial than ever.
Now is not the time to get your brand stuck in a PR snafu. Messaging needs to be deliberate and sensitive through this time. Don’t exploit the situation to sell your product, just offer support and information in this critical time.
5. Event spends will be reallocated or paused
The cancellation of major events, like sports and concerts are having a huge impact on ad spend. This spend is either going to be paused, re-allocated, or moved to digital.
6. Social media usage is higher than usual.
People are working from home and have time to use social media more than normal. This means social media usage is extending beyond just consuming information.
Use this time to utilize social media as an additional touchpoint for your buyers. Even if your product or service is taking a hit right now, it’s a great opportunity to stay top of mind with value-based information for your customers.