Nearly every industry has faced unprecedented changes and challenges due to Covid-19. As a result of shifts in the economy, sectors have had to adjust their advertising spend. Some have fared better than others throughout the past few months. But with the U.S. entering the path to reopening and businesses slowly beginning to return to “normal,” more changes are upon us. Advertising is now making its own comeback.
Here at MediaRadar we took a deep dive into how the ad industry has fared throughout the pandemic and the sectors that are beginning to see a rebound.
How the advertising industry has fared
In January and February 2020, ad spend was up 8% YoY. When Covid-19 began impacting the U.S., ad spending plummeted. According to our data, the trough occurred the week of March 22, when spend was down -36% YoY.
Now, every state in the U.S. has started reopening business in some capacity and the ad dollars are beginning to return to the market. While some industries will be slower to return to “normal” than others, many who saw steep declines early in the pandemic are beginning to advertise more regularly again.
Industries making a rebound
Amid the country’s reopening, spend from the auto industry is accelerating. Ad spend during the week of May 24 was nearly double where it was just three weeks earlier. Brands reviving their spend in recent weeks include Toyota, GM, Nissan, Subaru, and others.
Total car sales also recovered somewhat in May. The annualized sales rate, although still down nearly one-third YoY, jumped 42% MoM in May. China, which is further along in recovery than the U.S., saw car sales increase 12% YoY in May. This marks the second consecutive month of YoY growth. In the U.S., many consumers who do not own cars are now considering buying one to avoid public transit and ride-sharing, and to enable road trips and travel closer to home.
Domestic & regional tourism
Domestic tourism is beginning to pick up, as the pandemic eases across the U.S. The week of May 24 saw more than 3x the advertising spend than just one month prior, with more than 350 active local tourism bureaus buying.
YoY, spend during the week of May 24 still remains down 63%. However, this is a stark improvement over April, where spend was down 89% YoY.
There are other positive signs for the industry. Airbnb, for example, is experiencing a surge in interest, with more U.S. bookings between May 17 and June 3 than during the same period last year, much of which is being driven by relatively nearby trips. American Airlines is also boosting its domestic flight schedule as they see increased domestic demand, specifically to places like Florida or mountains out west. According to The Economist, Google search data reveals that travelers are much more interested in domestic travel for the remainder of 2020, favoring smaller attractions over large tourist destinations. All of this is likely to lead to a further increase in domestic tourism advertising.
From March 8 through May 16, hair care ad spend was down 31% YoY. However, the last two weeks have both been up YoY, the first time since the beginning of March.
In April, Unilever estimated that people were using personal care products eleven fewer times per week due to shelter-in-place orders. Unilever’s CFO specifically called out shampoo as an example of a product consumers are using less as they stay indoors. But with people beginning to go outside again, hair care ad spending has now picked back up to levels consistent with last year.
Real estate advertising was hit hard amid Covid-19. It was down 55% in April when compared to the January through March average. But ad spend levels in mid-May were 34% higher than where they were in early April, showing an early sign of recovery.
States that reopened earlier, like Texas and Florida, have seen real estate ad dollars return more quickly. The average weekly spend in April ($6.7M) was down by more than half, 55%, when compared to the average weekly spend in January – March ($14.9M).
New home sales also increased 21% YoY in May, according to a survey of 300 U.S. construction companies. And mortgage applications for the week of May 24 were up 17% YoY, their seventh consecutive week of increases, according to the Mortgage Bankers Association. Experts attribute the rise to pent-up demand, as well as a desire to move into a new home before a possible second wave in the fall.
Health & fitness services
The reopening of gyms around the country has resulted in a strong bounceback for health and fitness brand advertising. Ad spend during the last week of May was at its highest point in 11 weeks, bringing the last three weeks up to YoY levels.
Normally in the summer these brands typically begin to taper off their ad spending. But this year, they are ramping up to get customers back. Many states such as Minnesota, Florida, California, Pennsylvania, and others have begun reopening gyms, However, visitors will find things different when they return – with spaced out equipment for social distancing, caps on capacity, stricter hygiene rules, and more.
The road to recovery
While a full recovery is still far off, we can clearly see some segments beginning to reemerge and put ad dollars back into the market. It will take more time, But data that shows early signs of recovery is certainly a great start. It helps show that industries feel confident and optimistic about the road ahead.