COVID-19 Impact on Digital Investment - IAB Canadaiabcanada.com/content/uploads/2020/03/IAB-Canada...IAB Canada Buy-side Barometer: Wave 3, COVID-19 Impact on Digital Investment 2020

COVID-19 Impact on Digital Investment:Wave #3

April 28, 2020

Community Uninterrupted

What we wanted to learn from our Agency and Marketer members...

Wave #3: Bi-weekly Buy-Side Snapshot

As the COVID-19 crisis continues, many members are increasingly looking to IAB Canada to provide an ongoing barometer of how digital media investments have been curtailed thus far and plans for the next 3-6 months or later.

To generate this updated set of ‘broad impact’ indicators, we have completed this report on the third 3-minute survey of community members at IAB Canada agencies and marketers.

IAB Canada Buy-side Barometer: Wave 3, COVID-19 Impact on Digital Investment 2020

Agencies and Marketers Invited to Respond

Wave 3 ‘In-Market’ April 14-23, 2020; (Wave 2 April 1-7)Over Nine-in-ten respondents from Agencies

List of categories represented in third survey include:

• Automotive• CPG• Consumer Electronics• Fashion & Apparel• Financial services• Media/Entertainment• Retail

• Travel• Telcos• Real Estate• Home products/services• Governmental• Pharma/Healthcare• NGO

Note: Findings should be interpreted broadly/directionally.


Blue Ribbon Buy-Side Panel

Enhanced Credibility

The PanelDevon MacDonald - CEO, Canada, Mindshare

Gah-Yee Won - Director, Global Media & Marketing Science, Scotiabank* Joanne Crump, VP Integrated Media, Active International**Karel Wegert - Executive Vice-President, Media Experts IPG

Sean Dixon - Managing Director, Marketing Science, Omnicom Media Group***Alexandra Panousis - CEO of Carat Canada

Stuart Garvie - CEO at GroupM CanadaTracy Ball - Manager, Programmatic Marketing, The Home Depot Canada

* IAB Board member and Co-chair, Marketer Council** Member, Agency Council

*** Co-chair, Agency Council

• Promote reliable interpretation of survey findings by IAB Canada, that reflect in broad terms what is actually happening in our business;

• Identify and notify IAB Canada of any ‘potentially misleading’ impressions by some survey respondents to assist responsible reporting.


Note: Panel members vary as to who provides feedback on each wave..

Study HighlightsPowerful Digital Leadership


Q. How have majority of your digital budgets been impacted by COVID-19?

Over 80% of Agency Sample Negatively Impacted

Directionally consistent with Wave 2…• 75% of budgets delayed,

paused or reduced (vs 78%)

• Just 8% report canceled


45%

20%

10% 10%8%

4%2%

Dela…Red…

Tem…No…

Wit…

Incr…

Not…0%

9%

18%

27%

36%

45%

How majority of digital budgets impacted (choose one answer-percent of sample)


Q. How much of an increase/decrease by channel/tactic due to COVID-19?

Note: Findings should be interpreted broadly/directionally. The survey covers proportion of members taking actions and not the volumetrics of how deep the cuts are in aggregate or how big the companies taking these actions may be.

Most Formats Remain Affected, Outright Cancelations Rare

8%

14%

8%

10%

20%

8%

12%

47%

27%

29%

24%

12%

22%

10%

45%

59%

63%

65%

67%

69%

78%

Audio/Podcasting

Paid Search

Video - Site Direct

Display - Site Direct

Paid Social Media

Video - Programmatic

Display -Programmatic

Percent reporting changes to spending(% sample by channel/tactic)

Down, Pause/Delay,CancelCanceled (incl. above)

No change

UP

IAB Canada Buy-side Barometer: Wave 3, COVID-19 Impact on Digital Investment 2020IAB Canada Buy-side Barometer: Wave 3, COVID-19 Impact on Digital Investment 2020

Most affected: 5 of 7 formats• 63-78% “Down, Pause/Delay, Canceled”• Cancellations rare : 2-8% (incl. above)• Reductions tend to be under 40%

Least affected: Audio, SearchAudio highlights• 45% “Down, Pause/Delay, Canceled”• 47% “No Change” to spend

Similar to Wave 2 ranking…

Q. For the categories you work on, how have digital ad spends been affected?

Percentages do not sum to 100%, as Not Applicable not shown (i.e. categories not worked on)

Still among the Hardest Hit: Travel, Financial, Retail & Auto

Still among Least Affected:• Electronics• Telcos• Government• Pharma/Healthcare

Biggest % ‘no change’ or % ’increase’• Pharma/Healthcare: 34%

Percentages do not sum to 100%, as Not Applicable not shown (i.e. categories not worked on)

14%

12%

6%

10%

10%

4%

4%

20%

8%8%

8%

16%

4%12%

12%

6%

12%

14%

18%22%

24%

24%

24%

29%

35%

37%

39%

51%

Pharma & HealthcareGovernment

TelcosConsumer…

Non-Government OrganizationsReal Estate

Consumer Packaged GoodsHome Products/services

Media/EntertainmentFashion & Apparel

AutomotiveRetail

Financial ServicesTravel

Categories work on, how digital spends affected(percent of sample)

Less spending

No change

More spending




eCommerce Enabled Brands Continue to be Less Impacted

Q. Are brands with eCommerce capabilities more/less affected than non-eComms?

Percentages do not sum to 100%, as Not Applicable not shown (i.e. categories not worked on)Percentages do not sum to 100%, as Not Applicable not shown (i.e. categories not worked on)IAB Canada Buy-side Barometer: Wave 3, COVID-19 Impact on Digital Investment 2020


14% 10%

67%

Brands with eCommerce capability versus Non-eComm Brands0%

15%

30%

45%

60%

75%

Brands with eCommerce capability less affected than Non-eComms (% of sample)

More affected vs Non-eComm Same impact Less affected

Branding Campaigns As or Less Affected than Performance

Q. Branding campaign spends more/less affected than performance-based?

Percentages do not sum to 100%, as Not Applicable not shown (i.e. categories not worked on)IAB Canada Buy-side Barometer: Wave 3, COVID-19 Impact on Digital Investment 2020

Mixed views in Wave 2.


16%

35%41%

Branding-based campaign spends compared to Performance0%

9%

18%

27%

36%

45%

Impact on Branding vs Performance Campaign spends (% of sample)

Branding More affected (vs Perf) Same impact Less affected

Branding Campaigns As or Less Affected than Performance

Q. Branding campaign spends more/less affected than performance-based?

Percentages do not sum to 100%, as Not Applicable not shown (i.e. categories not worked on)IAB Canada Buy-side Barometer: Wave 3, COVID-19 Impact on Digital Investment 2020

Mixed views in Wave 2.


16%

35%41%

Branding-based campaign spends compared to Performance0%

9%

18%

27%

36%

45%

Impact on Branding vs Performance Campaign spends (% of sample)

Branding More affected (vs Perf) Same impact Less affected

“As a number of experts have noted, it’s

important to keep a

balance between long-term brand building and short-term

strategies. T

ypical recessions can last u

p to 4-5 quarters, so

brand building will be what drives growth during the recovery

period”.

Joanne Crump, VP Integrated Media, Active International

What issues are driving spend reductions?Powerful Digital Leadership


“Store closures during COVID-19 has closed our restaurant client”.

Q. Main reasons for your firm's or clients' digital budget decreases, pauses, etc?

Note: Findings should be interpreted broadly/directionally. Percentages do not sum to 100%, as Not Applicable not shown (i.e. categories not worked on)

Cash Flow & Creative Reassessment Still Key Issues


2%

16%

41%

53%

55%

71%

Budget shifts to non-digital media

Other (please specify)

Budgets redirected elswehere

Consumer trends/media usage

Reassess or alter creative

Cash flow concerns

0% 15% 30% 45% 60% 75%

Reasons for digital decreases / pauses etc(% sample; all that apply)

“Disruption in supply chain - can't advertise items that you don't have to

sell”.

related


Looking to the future…Powerful Digital Leadership


“These are very fluid times; with brands now knowing what they need to do to support consumers, they are focusing on how to plan effectively to come out of this stronger.”

Devon MacDonald, CEO Canada, Mindshare, A GroupM Company

Q. How often reviewing digital spend strategy with your team or agency for major modifications (not the usual optimizations)?

Ongoing Live Situation

Three-in-four reviewing budgets weekly/more often (74%)* - 78% in Wave 2

• Daily: One-in-three (31%) - Fewer doing so daily in Wave 3• Weekly: Over four-in ten (43%)• Less Often: (22%)• Business as usual (4%)

Note: Findings should be interpreted broadly/directionally. Percentages do not add to 100% because “business as usual” excluded:


“As the initial “shock phase” subsides, it makes sense that the cadence to review budget and spend strategy is shifting from daily to weekly with even a rise in less often.”Joanne Crump, VP Integrated Media, Active International

Over Seven-in-Ten Still Anticipate Reduced SpendsQ. Whether or not you have seen a reduction yet, are you still anticipating a drop in expenditure across digital media as a result of COVID-19?



Yes, 73%

No,27%

Still anticipating drop in digital spend(percent of sample)

(Down 10% from 83% in Wave 2)

Recovery Timing Assessment points to AutumnQ. How soon do you anticipate your brand/clients will resume paid digital media strategies/spends, as COVID-19 weakens and businesses recover?

Partial recovery starting June, Full recovery mounting by Sept-Dec.


2%10%

27%

69%

91%

41%

61%67%

29%

7%

May 2020 June 2020 July-Aug 2020 Sept-Dec, 2020 Later on0%

20%

40%

60%

80%

100%

How soon will digital spends recover?(percent sample by time-frame)

Fully: business as usual Partially

• Results broadly consistent with Waves 1 and 2• Continues to be a ‘live’ situation – weekly or even daily budget reviews (74%) although slightly

down in frequency• Over 80% say digital budgets reduced/paused/delayed etc. (83%), rarely canceled (8%)• Audio least affected among ad formats (45%), followed by Paid Search (59%)• Other formats range 63-78%, led again by Programmatic Display• Hardest hit continue to include

• Advertisers: Travel, Financial Services, Retail, Automotive • Brands without eComm capability

• Main ongoing causes of cutbacks - cash flow concerns (71%) and reassessing creative• Most expect still more reductions (73%) - down from 83% in Wave 2• Delay in full recovery till Sept-Dec. 2020 or later

Summary of Findings – Some Calming


Thank you for supporting IAB CanadaPowerful Digital Leadership

Any Suggestions for our next Survey Wave 3?

Email: [email protected]


Documents

COVID-19 Impact on Digital Investment - IAB Canadaiabcanada.com/content/uploads/2020/03/IAB-Canada...IAB Canada Buy-side Barometer: Wave 3, COVID-19 Impact on Digital Investment 2020