The global pandemic led to record declines in ad spend levels across some major advertising markets between March and May, according to new data from advertising intelligence firm Standard Media Index.
Using media agency billing data, SMI tracked spending across the United States, the U.K., Canada, Australia and New Zealand from the beginning of the pandemic until the end of May.
It found that spending across the five markets dropped by an average of 28.2% as advertisers pulled back amid fears of a global recession.
SMI CEO James Fennessy said that the pandemic’s impact is “far more severe” than the 2008-09 global recession, when the year-over-year spending declines never exceeded 16%. The good news, said Fennessy, is that SMI’s data shows all five countries showing “strengthening” demand in June, with the U.S. emerging as one of the best performing markets.
“[T]his has been an unfortunately unique experience given the sheer size of the ad spend declines being reported,” said Fennessy. “The fact the average decline is an extraordinary 28.2% really highlights the level of devastation wrought on some of the media markets where we track ad spend.”
The most pronounced decline is in Canada, with ad spending falling by 36.2% during the measured time period. The next closest market was Australia, where spending fell 29.8% (see chart).
Canada also saw (by considerable distance) the largest three-month decline in digital investment among the five countries, with spending falling 34.3% compared to an 18.5% drop in the U.S. and a 20.8% drop in Australia.
By comparison, the drop-off in TV spending was most pronounced in the U.S., with investment falling 33.6%. U.K. advertisers mostly maintained their investment in TV, with spending falling a relatively minor 10.7% over the period measured by SMI. Canadian TV spending fell 29.3%.
The data also shows a wide variance by advertising sector and media category, depending on the market. While insurance companies reduced their U.S. spend by 9.7%, for example, they increased spending by 3.1% in Australia. “The data really highlights the degree to which these mostly large multinational corporates are tailoring their media investments according to the local markets,” said Fennessy.
The one category that has seen universal declines is travel, where spending falling 78% in the U.S., 76% in New Zealand, 65% in Canada and 61% in the U.K. and Australia.