After bottoming out during the worst of the pandemic in April, ad spending bounced back slightly in May, according to a new overview of the Canadian market from ad intelligence firm Standard Media Index (SMI).
Total ad spending in April was down 52.5% from the corresponding year-earlier period, reversing modest gains of 3% in January and 2.23% in February. May ad spending was still down 50.47% compared to May 2019 (see chart below).
Year to date spending is 26.6% lower than it was during the same time period last year, while spending in the March to May period was 40.1% lower than it was in 2019.
Digital saw the strongest month-over-month recovery of any major media in May, recovering 8% of the spend lost in April (although it was still down 41.2% on a year-over-year basis). SMI attributes digital’s relative recovery to its “adaptability.”
“Digital is the one area that has shown early signs of picking up, which we expect to accelerate in the coming months,” said SMI CEO James Fennessy, noting that e-commerce has helped fuel its revival, with more consumers shifting to online purchases during the worst of the pandemic.
While TV and digital started the year with increases of 2.6% and 6.5% respectively, their momentum was wiped out by the pandemic.
TV and radio did grow their market share by 1.4% and 1.3% respectively during the COVID period, however, largely at the expense of the hard-hit OOH sector—which saw spending plummet 68% and its market share fall from 6.2% pre-COVID to 4% in the March to May period (chart below).
U.S. versus Canada
SMI found that while the pandemic hit the U.S. harder, Canada saw steeper declines in media spend between March and May—a 40.1% drop versus a 28.3% decline in the U.S.
While the advertiser response to TV and other traditional media were similar across the two markets, there was a significant disparity in digital spend between the U.S. and Canada— with the Canadian market falling 38.3% compared with an 18.4% drop in U.S.
Category spend January to May
Spending across the 21 categories tracked by SMI fell by an average of 26.6% in the January-May period versus the same period last year.
- Personal care and prescription drug brands continued to advertise through the pandemic, with the former category growing 6% year over year;
- Spending by media brands declined 11%;
- Food and household supplies declined slightly, by 11% and 12% respectively;
- Financial services saw a 25% year-over-year decline;
- Retail saw a 29% decrease;
- Alcohol and travel services saw the biggest declines in year-over-year growth, at 47% and 53% respectively.
SMI launched in Canada last month, becoming the company’s fifth market after its native Australia, the United Kingdom, United States and New Zealand. SMI uses data taken directly from media agencies’ invoicing systems to determine ad spending totals.