Login is restricted to DCN Publisher Members. If you are a DCN Member and don't have an account, register here.

Digital Content Next


Research / Insights on current and emerging industry topics

The industries surprising us with their ad spend in correlation to Covid-19

September 16, 2020 | By Todd Krizelman, CEO – MediaRadar @ToddKrizelman

There is no doubt that Covid-19 had a negative effect across industries. However, some sectors, including Consumer Packaged Goods (CPG) and bicycle brands, have actually done well during this time. Throughout the pandemic, these industries have experienced significant and unprecedented increases in sales. With those increases, the same industries upped their advertising spending as well. 

Here at MediaRadar we took a deep dive looking for industries that have increased ad spend levels in response to Covid-19, as well as those working towards a recovery. Back in June, we analyzed how the ad industry fared during the pandemic, highlighting the industries that had just begun bouncing back. Now, three months later, we’ve reassessed how those industries, plus others, are progressing. Based on what we’ve found, things are continuing to look up. 

Industries that increased ad spend

Pet brands – Pet adoptions experienced a dramatic increase during the pandemic. In fact, the Humane Society noted that in March and April there was a 34% year-over-year (YoY) increase in the number of pet adoptions. Capitalizing on this trend, pet brands (i.e. pet food, grooming supplies, etc.) upped their advertising, with the most recent weeks spend gap showing that pet brands’ ad spending has jumped 52%, YoY. 

Bicycles – Covid-19 caused many to avoid public transit. It also afforded people more time to take bike rides for leisure and as alternative exercise to gyms. These are just some of the reasons why consumer interest in bicycles significantly spiked during the pandemic. Since March, ad spending from bicycle brands is up 56%, YoY. As a matter of fact, the N.P.D. Group, a market research company recently reported that in March, sales of commuter bikes was up 66%, YoY, and sales of leisure bikes was up an incredible 121%, YoY. 

CPG products – As consumers have become extra cautious, and care more than ever about cleanliness, bath and shower products, such as body wash, soap and hand sanitizer have increased marketing efforts. Since March began, ad spend from bath and shower products is up 81%, YoY. Unilever reported that in Q2 of 2020, body wash sales increased 12%, hand soap sales increased 155% and hand sanitizer sales increase was off the charts. Ad spend from home fragrance brands are also up 51%, YoY. Since March began, every week except for one, ad spend in the CPG category is up when compared to its 2019 counterpart. If you’re going to be stuck at home all day, it might as well smell nice.

Commercial furniture –  It probably comes as no shock that as the world was forced to work from home. Thanks to Covid-induced lockdowns, the commercial furniture category saw an extreme increase in ad spend. According to a survey by YouGov, 54% of office workers didn’t have any sort of home office set-up before the pandemic. With everyone now purchasing office furniture for their homes, commercial furniture ads, normally reserved for the world of B2B, have entered the B2C sphere. Year-to-date, ad spend from commercial furniture brands is up 225%, YoY, with no signs of slowing down. 

As reported on DCN in June, additional industries to increase their advertising spend in response to Covid-19 include RVs, food subscription boxes, video games, skincare and childrens toys. Each of these industries is still outspending their 2019 levels, with food subscription boxes jumping 235% and RV’s jumping 378%, YoY, since April, respectively. 

Industries on the Mend 

Automotive – The automotive market continues to slowly but surely recover, as ad spend nears levels similar to last year (2019). During the week of August 10th, automotive ad spend was down just 8%, YoY; the industry’s best mark since the pandemic began. For automakers who are still reporting sales, results are getting better by the month. While Toyota’s sales were down YoY in July, they were still at their highest point since the pandemic began. Also in July, Kia and Hyundai were both roughly flat, while Mazda’s sales were up 3.4%, YoY.

Hospitality – Hotel brands seem to have found a new equilibrium for weekly advertising. Since mid-June, ad spend levels have consistently remained around $4M per week. While this is up nearly four times when compared to April and May, it remains down by about two thirds, YoY. According to STR, a hospitality industry data firm, US hotel occupancy for the week ending August 15th was at 50.2%. While this remains down 30%, YoY, it was the 17th week of increases in the past 18 weeks. 

Bars & Restaurants – Bars and Restaurants are seeing ad spend slowly return to levels consistent with last year (2019), with national chains being the main drivers of the recovery. During the week of August 10th, ad spend was down only 10%, YoY, its best level since mid-March. According to NPD, customer transactions at major restaurant chains were down 44%, YoY, in mid-April, its worst point. But, after 21 weeks of being down double digits, sales were down just 9% during the week of August 10th, signifying major improvement. 

Electronics – Consumer electronics experienced a major spike in sales during the early days of the pandemic, however, it quickly fell off. Best Buy reported a surge in sales as consumers transitioned to work from home, with online sales alone up 242% in Q2, YoY. However, Best Buy’s executives were quick to say this was a temporary spike as people adjusted to quarantine life. During the week of June 8th, after ad spending hit a low point of -70%, YoY, spend has been recovering and is now down only 20%, YoY, with sub-categories including cell phones, computers and WiFi equipment helping to drive the recovery. Back-to-school may have provided another boost, as parents are much more likely to be shopping for computers and tech instead of clothes or backpacks this year. 

Shock and recovery

The early days of the pandemic were a shock to the entire country, as well as most of the ad industry. While the road to recovery will not be easy or fast for every industry, our data does show that many are making strides. And while it may not always be the usual players buying up ad space, we’ve found that advertising remains an important part of any industry’s strategy, so long as they have products they can sell.

Print Friendly and PDF