Research & Data 2 minutes, 41 second read Mark Johnson, Editor, Just.Marketing
Few will be surprised that marketing budgets have been slashed during the coronavirus pandemic but a global study has revealed the extent of the impact.
Campaign budgets have been reduced by 25% on average, activity has fallen by 11% and the number of pitches has dropped by 15%, according to the study. Tourism budgets have been cut by a massive 75%. However, the report’s authors conclude a recovery is underway.
The Canary Report, published by market research platform Glow and strategy specialists Planning Dirty, breaks down how budgets, campaign activity and new business pitches have been affected across more than 35 categories.
The study was conducted in May and covered 110,000 employees in planning and strategy roles across the world. More than half of respondents – 52% – were in the USA, UK and Australia.
Glow CEO, Tim Clover, told Just.Marketing, "The hardest hit categories during lockdown have been those relating to human movement, socialising and entertainment. The tourism sector saw its budgets slashed by a whopping 75%, while ad spend in the hospitality and automotive industries was cut in half.
"However, it is probable that we will see improvement in these sectors over the coming months as the UK Government eases travel restrictions, opens up bars and restaurants and relaxes social distancing rules.
"The data suggests that, even as early as May, many agencies were already starting to pitch more, particularly in food and drink, government, finance and retail."
Sectors and agencies worst affected
The hardest hit campaign budgets have been in sectors relating to human movement, socialising and entertainment. The least affected were those pertaining to individual and broad societal campaigns, such as Personal Care, Computers, Software, Telecoms, Government organisations and Medicine and Pharma, the study found.
Among agencies, the hardest hit were the smallest, with those under 20 people down 30%, those with 20-250 people down 25%, and agencies with more than 250 staff saw a 20% drop.
The study found that agencies were working harder for less remuneration. On average, campaign activity had fallen by 11% but those pitching more often were fairing better with pre-covid levels of campaign activity.
Respondents said they were focusing on more digital activity, tactics over strategy and less up front media buying with more flexible options.
Pitching maybe down but not for everyone
Pitch activity had fallen by just 15% on average but several agencies were actually pitching more. They tended to be working in areas such as Food, Beverages, Government, Finance and Retail.
There were also hopeful signs of green shoots. Several categories previously placed on hold had begun starting to re-emerge as restrictions begin to be relaxed.
About the report
The 435 respondents were planners and strategists representing 110,000 employees in planning and strategy roles (based on the stated size of business they work for) in more than 50 countries. More than 52% were in the USA, UK and Australia. Most were senior managers and directors with decision-making authority with an agency focus with some client-side responses. Among respondents were more than 90 media agencies. The average business size was around 250. More than 35 categories were represented.
The anonymous survey was conducted over five days in May using the Planning Dirty subscriber list.