Nicole Perrin, eMarketer principal analyst, says “campaigns likely fear it will seem insensitive” to campaign during coronavirus
The loss of live sports and pulling back of political campaigns wary of insensitive advertising around the coronavirus pandemic will lead to a massive downturn in TV ad spending, according to eMarketer.
The research firm, which had initially expected 2020 to result in a 2% bump in TV ad spending, is now forecasting that advertising will drop between 22% and 29% in the first half of 2020. To put that in money terms: That would be a decline between $7.5-$9.9 billion, or $10-$12 billion less than eMarketer originally forecast.
With a general election and Summer Olympics, this year was supposed to be a brief respite of annual declines in TV advertising. But the global health crisis has benched all live sports for the foreseeable future, including pushing the Tokyo Olympics until 2021. A once-robust Democratic primary is essentially over, with former Vice President Joe Biden taking his place as the presumptive nominee to challenge Donald Trump in November.
“Aside from the lost sporting events, we expect TV advertisers to take a wait-and-see approach as the economy continues to stall,” said eMarketer principal analyst Nicole Perrin. “With consumers stuck at home, many find themselves having more time on their hands and, thus, greater interest in watching TV. But that coincides with millions of newly unemployed or underemployed consumers who will have to keep an eye on their personal finances.”
While eMarketer still expected political advertising to ramp up in the third quarter, the company believes that campaigns are largely holding on spending to not appear insensitive of running election ads during a pandemic.
“The other major buoy of TV ad spending this year was political advertisers, and their spending will be hampered in Q2,” said Perrin. “It’s normal for election-related TV advertising to be heavily weighted toward the last couple of months before the election, so we always expected political ad spending on TV to be concentrated in Q3. But given the way the Democratic primary has shaken out, with former vice president Joe Biden now the presumptive nominee, ad spending for those elections has dried up. There’s not a significant reason to spend political ad budgets now, and campaigns likely fear it will seem insensitive if they do.”