Last year, when marketing forecasters began looking at ad spending expectations for 2020, they predicted a cautious, conservative year for most marketers around the globe. Despite the presidential election and the 2020 Summer Olympics, ad spending in the United States was projected to grow by only four to five percent.
Then, the COVID-19 pandemic took the world by storm.
In March, U.S. spending across all media channels fell to $10.5 billion—17.5% less than the total spending in March 2019, according to Kantar. Three months later, ad spending was down 30%.
You don’t need me to tell you that this disrupted the entire publishing industry. We’ve seen the consumption of magazines, newspapers, and books all but stop in some markets, while the audience for news, entertainment, and escapism has exploded.
It’s still too early to fully understand COVID-19’s impact on publishers. However, we do know one thing: The industry will look very different on the other side of the pandemic.
So, what do we know about the current industry landscape? While there are some data delays, here are some notable trends:
Decreased Marketing Budgets Worldwide
Nearly all product sectors saw a record decline in ad spending this year, with travel advertising suffering the most. With international borders closed, spending from hotels, airlines, rental companies, and other travel marketing channels fell 53.3% in the first half of 2020. In April alone, travel advertising was down 84% compared to 2019, according to Kantar.
The automotive industry also saw a precipitous fall (36.4%), which was followed by financial services (25.3%), and retail (22.6%).
For newspaper publishers, in particular, this message was further enforced by PwC’s Global Entertainment and Media Outlook report for 2020-2024. The report forecast that both print and digital advertising will fall 27% from $49.2 billion to $36 billion by 2024.
In this new climate, newspapers will be faced with a decision: adapt or face extinction. This message, of course, is applicable across all publication channels. Therefore, questioning your company’s competitive position in the market should be a priority for every publisher.
Local Outlets Are Seeing a COVID-19 Traffic Bump
Most publishers have yet to release their digital subscription data since the pandemic began, but according to FIBB, internet traffic data suggests that local news publishers might be the ones who have benefitted the most from COVID-19.
With most people looking to keep up to date about what’s happening in their own towns, the industry saw a consumer shift to local news publications. Tribune Publishing saw a 293% increase in digital subscription sales in March alone, the trade association found. Other publications such as The Seattle Times saw a 120% growth in traffic, while The San Francisco Chronicle also increased by 150%.
But while several outlets are enjoying record-breaking page views, overall revenue is down for most organizations. Publishers who rely on ad revenue have felt the pressure as firms in travel, auto, retail, and entertainment slashed their ad budgets. In other words, there many more readers but fewer ways to monetize them.
The Need for a Broad Marketing Mix
Many publishers experienced a COVID-19 bump, but it wasn’t long before that boost appeared to be over. One reason for this, according to the Pew Research Center, is that 70% of Americans need breaks from news about the pandemic, with 43% saying that the news has a negative impact on their mental health.
The negativity of news publication coverage leaves consumers feeling that the world is a more depressing place. To address this news fatigue or, in some cases, news avoidance, it is important that publications change their approach to content creation. Telling fresh and innovative stories, as well as campaigning with evergreen content, will be crucial for publications in the coming months.
Looking Forward to Digital
Just as the travel industry became the poster child for the impact of COVID-19, it will also be the indicator of economic recovery, according to the market research company Kantar. They also predict an even stronger advertising push in digital channels in 2021, as marketing managers begin looking for a return on investment. Advertisers will be looking for publishers with valuable inventory and high conversion rates to reach their ROI goals. This potential revenue can be obtained by digital publishers, but only by those who have a strong focus on optimizing their monetization.