Coronavirus Ad Impact to Exceed 2008 Financial Crisis: Study

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A survey of nearly 400 media buyers and brands by Interactive Advertising Bureau found that digital ad spending is currently down 33 percent and traditional media spending is down 39 percent.

The advertising industry is expecting the coronavirus pandemic to have a significant impact on longterm ad spending, a new study from the Interactive Advertising Bureau has found. 

In a survey of nearly 400 media buyers and brands, 74 percent of respondents said that the novel coronavirus outbreak will have a greater impact on advertising than the 2008 financial crisis. Already, 70 percent of buyers said they had adjusted or paused their ad spend and 16 percent said they were still determining their course of action. 

More than 80,000 people in the U.S. have tested positive for the coronavirus. The global shutdown that has resulted from the outbreak has led to stock market declines and concerns about the economy. As a result of the current climate, digital ad spending is currently down 33 percent and traditional media spending is down 39 percent, per the IAB.

Most marketers, 63 percent of respondents, are adjusting the messaging for their ads currently in the marketplace. Mission-based marketing campaigns are up 42 percent and cause-related marketing campaigns are up 41 percent.

Nearly a quarter of respondents have paused all advertising spending for the first quarter and second quarter of this year. And 73 percent of buyers say that coronavirus will have an impact on the upfront ad spending, estimating on average that the market will see a 20 percent decline. The impact on the third and fourth quarters, by which time self-isolation mandates are likely to have been lifted and work returned to normal operations, is expected to be more modest. 

Tech giants Facebook and Twitter have also warned of weakened online advertising demand. Facebook said that it doesn't monetize the services where it is seeing increased usage, like its Messenger platform, which its users have been relying on to stay in touch with family and friends. Twitter, citing a coronavirus-related impact to its global ad revenue, withdrew its revenue and operating income forecasts for the first quarter.