“To Spend or Not to Spend” was the question that might have been at the tip of Shakespeares quill, had he been a marketer in 2020.
While there were undoubtedly industries who were going to come out of the pandemic in 2020 smelling of roses (we’re looking at you e-commerce) and with bank accounts that were bursting at the seams. Others such as high street retail, travel and events have been particularly hard hit. Advertising, however, is an industry that was hard hit and yet was barely been mentioned outside of industry circles.
You know that the outlook is bad when “Mega-Brands” such as Coca-Cola and Diageo cut back on their annual advertising budget. However, the sheer volume of cancelled events has also left a humungous crater on ad revenues. The clearest examples of this is the cancellation of the NBA Finals and Euro 2020 as examples of the proverbial cliff edge that ad revenues have fallen off by the events not taking place.
The 2019 NBA finals brought in $288 million (in advertising revenue for just six games,) according to Kantar Media. Euro 2020 would have resulted in huge ad spend boosts across the channels it is shown on, with broadcasters for the previous tournament spending $1.1 billion for the rights, the way they make that back? Through ad revenues.
Fortunately for broadcasters, the basketball was played behind closed doors eventually. And Euro 2020 was played a year later, giving advertisers a chance to squirrel away more money to spend on ads.
ITV alone saw a record ad revenue jump of 115 per cent in June 2021 compared to June 2020 fuelled by the combination of football and Love Island, with brands spending £750,000 for 30 second spots during England’s Semi-final match.
While these sorts of record jumps may not be seen again, ITV, other broadcasters and the advertising powers at be, will be sorely tempted to set the minimum cost for an ad spot higher in the future.