Consumer Behaviour Shift And How It Impacts Digital Ad Budgets
- Content writer at BriefBid, Cassandra King
Consumer behaviour has seen a huge shift since COVID 19 hit in early 2020—everyday routines broken and replaced with a new and uncertain reality. With people spending more time indoors and in the comfort of their homes, online shopping and ad consumption has also seen a big change. This means that where and how you reach your ideal buyers is likely going to look a lot different (and will continue to shift as time goes on). Important emphasis on the how, as media buyers need to think of the emotional state of their customers during this time.
From pursuing passion projects, to focusing on cooking and healthy eating, Canadian’s have been busy coping with the new normal in many different ways. Here’s a brief breakdown of how consumer behaviour in Canada has been changing this year (anyone else get into bread baking or gardening?!):
Source: COVID 19 Staying indoors with Canada
Presented By: Quantcast
Though media buying is always changing, many industries have had to majorly shift their strategies since COVID 19. The hardest hit industries have naturally been travel and tourism, hospitality and retail. These industries have seen high unemployment and will have a longer road to recovery.
Let’s get into the digital ad statistics to help paint a better picture of the current landscape.
The shift in digital ad spend
In a recent study by IAB Canada (conducted during June 19-July 8, 2020), they surveyed a community of agencies and marketers to find out how their COVID-19 is impacting their digital media investments. Looking at the overall advertising landscape, many digital ad budgets have been paused (16%), delayed (32%) or reduced (39%), while a small subset have actually increased spend (6%).
Source: Covid-19 Impact on Digital Investment: 2020 Buy-Side Barometer Survey Wave #5
Presented By: IAB Canada
Looking deeper into each ad channel, programmatic display has seen the largest change with 62% saying their spend is down, paused or delayed. Whereas audio/podcasting have been the least hit with only 32% down (this makes sense considering consumers have a lot of time on their hands to listen to their favourite podcasts at home).
The biggest percentage difference in increased spend has been in paid search, which is up 29%. Again, this aligns with the shift in online consumer behaviour—if people can’t shop in stores (or don’t feel comfortable doing so), then the next best place is online. In fact, many small businesses have had to build up their online presence in the form of updated websites that allow for online ordering, and an increased focus on social media.
Source: Covid-19 Impact on Digital Investment: 2020 Buy-Side Barometer Survey Wave #5
Presented By: IAB Canada
Cash flow concerns and changes in consumer trends are the main reasons for the decrease in ad spending
Though it would seem natural to just shift budget from one channel to the next, there’s another reason why ad spend is down. In the same IAB Canada survey, 68% of respondents said that they reduced ad spend due to cash flow concerns.
With the uncertainty of what the future will look like, many companies are worried about cash flow. Particularly for startups and businesses getting ready to scale, most are already burning through their money. During COVID, many have seen that burn rate increase even further which has led to mass layoffs. From AirBnb and Uber, to Groupon and Eventbrite, to WeWork and Carta, many tech companies have had to let go of thousands of employees to simply stay afloat.
Source: Covid-19 Impact on Digital Investment: 2020 Buy-Side Barometer Survey Wave #5
Presented By: IAB Canada
Other reasons for the decrease in ad spend are of course changes in consumer trends, along with reassessing creative to better fit the current landscape. Bringing it back home, it’s not all about where you target your customers, a lot of weight is put on the how!
Source: Covid-19 Impact on Digital Investment: 2020 Buy-Side Barometer Survey Wave #5
Presented By: IAB Canada
How Marketers Can Adapt To The Consumer Behaviour Change
Through these challenging and unprecedented times comes the opportunity to change things up, learn more about your consumers, and embrace a nimble mindset. Though many companies are reducing ad spend right now to increase runway or stay afloat, they could be setting themselves up for more troublesome times in the future. Data suggests that you shouldn’t stop advertising in a downturn and a 20% reduction in advertising spend can cause profits to take a hit in the long term.
To help marketing professionals adapt quickly to consumer behaviour change and stay relevant with the ongoing advertising investments, BriefBid launched Media Navigator.
BriefBid Media Navigator helps planners and buyers quickly find media solutions and strategies to adapt and stay relevant to the rapidly changing consumer trends.
